What Los Angeles Taught Us About Rent Control—and Why Salinas Should Pay Attention
In 1981, the RAND Corporation released one of the most comprehensive and data-driven analyses ever conducted on rent control in a major U.S. city:
“The Impact of Rent Control on the Los Angeles Housing Market.”
Although more than four decades old, the findings read like a roadmap for what happens when a city implements—or tightens—rent control. The patterns they identified in Los Angeles mirror the exact conditions unfolding today in California cities like Salinas.
This blog post summarizes the report’s key findings and applies them directly to Salinas’ Rent Stabilization Ordinance and the current housing policy debate.
What the RAND Report Found
1. Rent Control Lowers Rents—But Only on Paper
RAND estimated that Los Angeles’ rent control law reduced rents for continuing tenants by roughly 4% below market conditions by 1982. If extended to 1990, this reduction would shrink to 3.5% due to long-term market distortions.
On the surface, this seems like a win. But the report makes one thing clear:
The benefit to tenants is small compared to the overall damage rent control causes to the housing supply.
RAND Summary, p. vii–viii
2. Rent Control Reduces Housing Quality and Quantity
RAND identified three ways landlords respond when the government forces down rents:
1. Reduce service (less maintenance, fewer improvements).
2. Allow deterioration because revenue can’t support upkeep.
3. Remove units entirely through abandonment, demolition, or conversion to non-rental uses.
RAND estimated Los Angeles would experience significant losses in the quantity of housing services available, with deterioration accounting for half of the total reduction. (Summary, p. viii–ix)
This is one of the most important findings for Salinas:
Even when units remain “on the books,” the usable housing supply declines as quality collapses.
3. Rent Control Accelerates Conversion of Rentals to Other Uses
The report highlights that under rent control, property owners naturally seek ways out of the system:
condo conversions
owner move-ins
demolitions
abandonment of unprofitable units
RAND noted that “quantity reductions” grow substantially over time—especially when rent caps are tightened. (Summary, p. viii–ix)
4. Rent Control Shrinks City Revenue
Lower rents mean:
lower property values
lower property tax assessments
reduced funding for schools, fire protection, police, and city infrastructure
RAND documented real losses in tax revenue resulting directly from rent caps. (Summary, p. ix)
This has enormous implications for Salinas, where the City is already struggling to fund public safety and essential services.
5. Rent Control Does Not Target Low-Income Families
Perhaps the most damning finding:
Rent control benefits are poorly targeted and do not primarily help low-income households.
> —RAND Summary, p. x–xi
Because rent control provides subsidies to units, not people, benefits go to whoever happens to live in the unit—even if they have higher income.
Los Angeles found that:
wealthier households stayed longer to retain low rents
lower-income renters struggled to find available units
the system reduced mobility, freezing families into inappropriate housing sizes
This is exactly what economists today call tenure lock.
6. Rent Control Reduces the Supply of New Housing
RAND observed a dramatic decline in new construction during rent control periods. Developers either delayed projects or walked away entirely due to:
reduced profitability
increased regulatory uncertainty
unpredictable future rent levels
(Summary and modeling sections throughout the report)
This effect is visible today across California cities with strong rent caps.
Why This Matters for Salinas in 2025
While Los Angeles in the late 1970s was larger in scale, the economic mechanisms are identical to what Salinas is experiencing under its Rent Stabilization Ordinance.
Here’s how the RAND findings map directly onto Salinas:
1. Reduced Supply & Deterioration of Rentals
Local property owners in Salinas are already reporting:
inability to fund basic maintenance under capped rents
deferring repairs because increases can’t keep up with rising costs
considering selling units or converting them to non-rental uses
RAND predicted exactly this outcome.
2. Fewer Available Homes for Working Families
Rent control in Salinas—like in LA—makes it harder for new households to find homes. The RAND report shows that mobility declines sharply under rent caps. Long-term tenants stay locked in units, reducing turnover and availability.
This disproportionately harms:
farmworker families
young families renting for the first time
low-income residents seeking upward mobility
3. Financial Harm to City Revenue
Salinas already struggles with:
rising crime
understaffed police and fire
infrastructure needs
homelessness service gaps
As rental values fall or stagnate, property tax revenue growth slows, worsening the city’s financial stability—exactly what RAND warned about.
4. Poor Targeting of Benefits
Just like Los Angeles, the Salinas ordinance:
does not require tenants to prove need
freezes subsidies to units, not people
can subsidize high-income renters who simply occupy a covered unit
This means working-class renters—especially larger multigenerational or farmworker households—benefit the least from rent control.
5. New Construction Will Decline
Developers in Salinas have already paused projects due to:
uncertainty about long-term rent caps
political instability around housing policy
the potential of future ballot-box regulatory changes
RAND’s findings show this leads to long-term housing shortages that hurt the very families rent control is supposed to help.
The Big Picture: Rent Control Trades Short-Term Relief for Long-Term Damage
The RAND report concludes with an unmistakable warning:
Rent control cannot reverse housing shortages—and often makes them worse.
> —Summary, p. xii
Los Angeles learned this the hard way.
Salinas can learn from their history.
Conclusion: Smart Housing Policy Requires Facts, Not Emotion
The RAND study remains one of the most rigorous pieces of housing research ever produced. Its conclusions are consistent with decades of subsequent economic research nationwide.
For Salinas, this report is not just history—it is a forecast.
Every effect RAND documented in Los Angeles is now showing early signs here:
shrinking supply
deferred maintenance
lower revenue for city services
fewer options for low-income renters
investor and developer flight
politically driven, not data-driven policy decisions
Solving Salinas’ housing challenges requires focusing on production, preservation, and mobility, not policies that freeze the market and accelerate decline.
Works Cited
RAND Corporation.The Impact of Rent Control on the Los Angeles Housing Market. Prepared for the City of Los Angeles. August 1981. Document No. N-1747-LA.