Case Study 1 — The Walden County Rent Control Vote

In March 2025, the Walden County Council had to decide whether to pass a rent control ordinance affecting all rental housing within five miles of the Millbrook State University campus. The proposal, introduced by three Democratic council members in coalition with a tenant advocacy group called Millbrook Tenants United, would have:

• Capped rent increases on existing leases at 3% per year
• Capped rents on new leases at $1,250/month for 1-bedroom units (about $150 below market)
• Applied to all rental properties of any size within the five-mile zone
• Exempted new construction completed after the ordinance's effective date for 15 years (a "grandfathering" provision designed to encourage future building)
• Created a county "Rent Board" to handle disputes and exceptions

The proposal was popular with some constituencies. A Daily-Sentinel poll showed 64% support among MSU students, 51% support among other Millbrook residents, and 38% support among landlords. The council chamber was packed for the public hearing on March 14. Three economists (two from MSU and one from a regional think tank) had been invited to speak. All three opposed the ordinance. Their arguments were the standard supply-and-demand critique. Their arguments were also respectful, careful, and aware of the political dynamics they were addressing.

This case study walks through what happened at the hearing, what the council members were considering, and what the eventual vote (5–4 against the ordinance) tells us about how economic analysis interacts with real political decisions.

What the economists said

Dr. Maria Contreras (MSU Department of Economics, labor economist): "The standard supply-and-demand analysis is well-established and the empirical literature largely confirms it. When you cap rents below the market price, three things happen: existing landlords reduce their willingness to rent units, fewer new units get built, and quality declines as landlords have less incentive to maintain their properties. The result, over time, is less affordable housing, not more. The Diamond-McQuade-Qian study of San Francisco published in 2019 is the most rigorous recent evidence — they found that rent control reduced the supply of rental housing by about 15% over 15 years.

"I am not arguing that the housing situation in Millbrook is acceptable. It isn't. Rents are rising faster than wages, and many MSU students are facing real hardship. But this proposal will not fix that. It will probably make it worse over five to ten years.

"There are policies that would help. Reform zoning to allow more apartments to be built. Speed up permitting for new construction. Subsidize low-income tenants directly through vouchers rather than capping the price for everyone. Build more dorms. These would address the underlying shortage rather than masking it."

Dr. James Patel (MSU Department of Economics, behavioral economist): "I want to add something to Maria's analysis, because I think the standard critique misses something important about why this proposal is popular. People who support rent control are not stupid or ignorant. They are responding to something real — the bargaining power asymmetry between a single renter and a landlord, the absence of stability in their lives, the sense that their housing situation could change suddenly through no fault of their own. Those concerns are legitimate.

"But the response to those concerns should not be a price control. The right response is policies that directly address what voters are responding to. Zoning reform addresses the supply problem that makes rents rise in the first place. Vouchers address the affordability problem without distorting the market. A 'just cause' eviction ordinance — something many cities have — addresses the stability concern by making it harder for landlords to evict tenants without good reason. None of these creates the long-run shortages that strict rent control creates.

"My recommendation: vote no on this ordinance and pass a package of zoning reform, voucher expansion, and just-cause eviction protection instead."

Dr. Thomas Reilly (Heartland Policy Institute): "I'll be brief. The economic case against this ordinance is overwhelming. The IGM Forum poll of leading economists in 2012 found 95% agreement that rent control reduces the supply and quality of broadly affordable rental housing. There is no serious economic disagreement on this point.

"What there is serious disagreement about is what to do about housing affordability. I have my own views, which I won't burden you with. But I will say this: the worst possible response to a shortage caused by too little supply is to cap the price, because that just makes the supply problem worse. If you want more housing, build more housing. If you want lower rents for current tenants, do something that doesn't reduce the housing stock for everyone else."

What the supporters said

The hearing also heard from supporters of the ordinance, including:

Janet Morrison, a 73-year-old retired schoolteacher who had rented the same apartment in downtown Millbrook for 28 years: "I am a retiree on Social Security. My rent has gone up every year for the last 28 years. Last year my landlord raised it 22%, from $850 to $1,040. I can't afford that. I am not a college student. I am not a professional. I am a retired teacher who has lived in this town her whole adult life. I know all the arguments against this ordinance — but the economists who oppose it are not looking at my Social Security check. The 'long-run supply effects' will not help me, because I do not have a long run. I have this year's rent bill. Pass the ordinance."

Carlos Vega, a 19-year-old MSU sophomore from a working-class family in Texas: "I work 25 hours a week to pay for my apartment. My rent went up $200 this year and my parents can't help with that — they are already paying my tuition. I have applied for the dorms but the waitlist is over 400 people long. I have applied for housing assistance through the financial aid office and was told they have already exhausted their budget for the year. I do not know what I am going to do. The economists tell me that in 5 years there will be a shortage if we pass rent control. I will graduate in 3 years. Their long-run effects do not affect me, but my rent does. Pass the ordinance."

Dr. Sarah Lin, who runs Millbrook Tenants United: "I want to address the economists directly. You are not wrong about the long-run supply effects. We have read the literature. We know what Diamond-McQuade-Qian found. We are willing to accept some long-run reduction in supply — within reason — in exchange for stability for current tenants who would otherwise be displaced. That is a values judgment, and we are making it explicitly.

"What we are not willing to accept is the framing that 'the economic literature opposes rent control, therefore anyone who supports it is wrong.' That is not how the economic literature works. The economic literature describes consequences. It does not weight them. Reasonable people can weight efficiency and stability differently and arrive at different policy conclusions from the same evidence. We are weighting stability higher than the consensus of economists does. That is a defensible position, not a confused one."

How the council members thought about it

The eight council members had to vote. Their public statements suggested how they were thinking:

• Two members (both Democrats) supported the ordinance enthusiastically. They cited the rent burden on their constituents and were unconvinced by the economists' critique. One said: "If 95% of economists are wrong about something, that wouldn't be the first time. The voters know what they need."

• One member (Democrat) supported the ordinance reluctantly. She acknowledged the economic critique but felt the immediate harm to current tenants outweighed the long-run risks. "I am voting yes, but I am also going to push hard for the zoning reforms Dr. Contreras recommended."

• One member (Republican) opposed the ordinance and was skeptical of the alternative proposals as well. "The market should determine rents. The county should not interfere."

• Three members (two Democrats, one Republican) opposed the ordinance and supported the alternative package (zoning reform + vouchers + just cause eviction). They were essentially convinced by the Patel framing.

• One member (Democrat) was undecided going into the vote.

The vote was 5–4 against the ordinance, with the undecided member voting no after extended discussion. The same session passed: - A $200,000 emergency rental assistance fund (vouchers) - A unanimous resolution to begin a year-long review of the county's zoning code - A non-binding statement of intent to consider just cause eviction protection in the next legislative session

What happened next

In the year following the vote:

• The emergency rental assistance fund disbursed about $180,000 to 120 households. Recipients used it to cover one to four months of rent. The fund was widely seen as helpful but inadequate.
• The zoning review began but moved slowly. Strong opposition from single-family homeowners in established neighborhoods slowed the proposed reforms.
• A revised rent stabilization proposal — much more modest than the original, with allowed increases of CPI plus 2% — was introduced in early 2026 and is currently before the council. Its prospects are uncertain.
• Median rent for 1-bedroom apartments in the affected zone rose from $1,400 to $1,475 over the year (about 5% — slower than the 17% from the previous year, but still higher than wage growth).
• Two new apartment buildings (totaling about 240 units) broke ground after the zoning study identified them as feasible under existing rules. They will be available in 2027.

What does the case study tell us?

Lessons

Lesson 1 — Economic analysis is one input to policy, not the only one. The economists at the hearing made the strongest possible case against the ordinance. The council still came within one vote of passing it. The council members who voted no did so because they were persuaded both by the economic critique and by the existence of alternative policies that better addressed the underlying problem. The council members who voted yes did so because they weighted the immediate stability of current tenants higher than the long-run efficiency concerns the economists raised. Both positions were defensible.

Lesson 2 — The "what to do instead" matters as much as the "don't do this." Pure opposition to a popular policy is rarely effective. Opposition combined with credible alternatives is much more effective. The economists who suggested zoning reform, vouchers, and just cause eviction were the ones who actually moved the council. The economist who said "the market should determine rents" with no alternative proposal was the least effective.

Lesson 3 — The voters who support rent control are not stupid. Janet Morrison and Carlos Vega were both responding to real, immediate, concrete problems. The dismissive framing — "voters don't understand basic economics" — is not just rude; it is inaccurate. Voters understand their own situation. The job of economic analysis is to give them better tools for thinking about how to address it, not to scold them for choosing wrong.

Lesson 4 — Policy is a system, not a single decision. The Walden County Council didn't just choose between "rent control" and "no rent control." They chose between an imperfect rent control proposal, an alternative package of zoning + vouchers + protections, and the status quo. Real policy choices are almost always among multiple options, and the comparison matters more than any single option's flaws.

Lesson 5 — Time horizons matter. Rent control's largest costs accrue over 5–10 years (or longer). Its benefits accrue immediately. The political math heavily favors immediate benefits. Any policy critique that relies on long-run effects has to wrestle with the fact that the long run does not vote.

Discussion questions

1. If you were on the Walden County Council, how would you have voted? Justify your answer using both the economic critique and the considerations the supporters raised.

2. The case study identifies "stability" as a real benefit that strict rent control provides for current tenants. Is there a way to deliver that benefit without the supply costs of strict rent control?

3. Janet Morrison's argument was that "the long run will not help me, because I do not have a long run." How should economic analysis weight the immediate concerns of older or vulnerable tenants against the long-run effects on the housing stock? Is there a defensible framework for this?

4. The council passed the alternative package (zoning + vouchers + protections) but progress was slow. Why might this be? What does it tell you about the political viability of "good" economic policy?

5. The case study implies that the IGM Forum's 95% consensus against rent control is real and important — but also that 5% of leading economists do not share the consensus. What might the dissenters be seeing that the majority misses (or the other way around)?