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Judge for Yourself? The Impact of Controls on Rents in Interwar New York

Author

Listed:
  • Ronan Lyons

    (Trinity College Dublin)

  • Maximilian Guennewig-Moenert

    (University of Cologne)

Abstract

This paper examines the impact of early 20th-century rent control laws in New York City (NYC), using a Regression Discontinuity Design (RDD) to analyze the effects on market rents near municipal court district boundaries. We focus on rent regulations introduced in 1920, where judges had discretion to determine rent increases and did so influenced by their partisan affiliations. Using a dataset of over 12,000 rental listings from the New York Times and records of 125 district judges, we find that market rents jumped by almost 10% crossing from Democrat- to Republican-controlled districts after the policy was implemented. A causal interpretation is supported not only by a rich set of controls but also by the lack of any discontinuity just before these controls were introduced or after. Our findings contribute new evidence on judicial discretion's role in shaping housing market outcomes and provide insights into early rent control policies, highlighting their distortionary effects on rental markets before World War II.

Suggested Citation

  • Ronan Lyons & Maximilian Guennewig-Moenert, 2024. "Judge for Yourself? The Impact of Controls on Rents in Interwar New York," Trinity Economics Papers tep0924, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:tep0924
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    File URL: https://www.tcd.ie/Economics/TEP/2024/TEP0924.pdf
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    References listed on IDEAS

    as
    1. Kholodilin, Konstantin A., 2024. "Rent control effects through the lens of empirical research: An almost complete review of the literature," Journal of Housing Economics, Elsevier, vol. 63(C).
    2. Claire S. H. Lim & James M. Snyder Jr. & David Strömberg Jr., 2015. "The Judge, the Politician, and the Press: Newspaper Coverage and Criminal Sentencing across Electoral Systems," American Economic Journal: Applied Economics, American Economic Association, vol. 7(4), pages 103-135, October.
    3. Kholodilin, Konstantin A., 2024. "Rent control effects through the lens of empirical research: An almost complete review of the literature," Journal of Housing Economics, Elsevier, vol. 63(C).
    4. Ronan C. Lyons & Allison Shertzer & Rowena Gray & David N. Agorastos, 2024. "The Price of Housing in the United States, 1890-2006," NBER Working Papers 32593, National Bureau of Economic Research, Inc.
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    8. Guido Imbens & Karthik Kalyanaraman, 2012. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(3), pages 933-959.
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    11. Linneman, Peter, 1987. "The effect of rent control on the distribution of income among New York City renters," Journal of Urban Economics, Elsevier, vol. 22(1), pages 14-34, July.
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    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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