Social Justice & Community
Economics Ph.D. candidate receives grant to study effects of rental control on household finances and labor market mobility
In the face of the increasing cost of living, economic research is uncovering how public policy initiatives are directly and indirectly shaping housing markets.
The current housing market in the U.S. remains one of the most tumultuous in history, with affordability creating an undue burden on renters. Economics doctoral candidate Gonzalo Respighi Grasso was awarded a $15,000 dissertation research grant from the Russell Sage Foundation and W.E. Upjohn Institute for Employment Research to uncover how these housing access issues impact renters’ finances.
“My inspiration to focus on this topic started with observing the reality around me.” Respighi Grasso said. “I realized that the relationship between my housing costs and my salary influenced my decision-making, and that others might be facing similar dilemmas.”
Government regulation of private landlords’ rental fees, an element of rent control policies, is used to stabilize housing costs, and Respighi Grasso’s research will focus on better understanding its effects. Many economists oppose policies that manipulate prices, because they decrease incentives for landlords to provide rental housing by placing a ceiling on their return on investment. Yet, the rental market continues to see a decrease in rental options, even without these rent fixes in place. Housing availability and affordability remain a critical issue for long-term financial security and meeting the demands of a changing labor market.
“There is considerable research suggesting that renters in rent-controlled housing have benefited from these measures by increasing their rental duration, but changes in these policies through ‘vacancy decontrol’ are enabling landlords to push out tenants and return their units to market-rate prices,” he said. “My research indicates that rent control was beneficial to tenants before this policy change, but its current impact is unclear. There is also not an abundance of research that analyses the incentives renters have to stay or leave when accounting for overall income and opportunities for increased earnings.”
Respighi Grasso’s dissertation research will especially focus on how rental control policies shape the behaviors of racial minorities and low-income individuals, who spend more of their income on housing than other subgroups. Part of this research seeks to understand the unintended impacts of rental control on minorities, including how landlords leverage alternative mechanisms. These mechanisms can involve filtering out tenants eligible for rental control units through screening applications that collect personal information, such as income and gender.
He hopes this research will provide new evidence about the efficacy of these policies and bring about insights that can help them better support the people they are intended to help.
“These policies are different from the ones that were passed years ago, so now, I think we might have a sense of whether or how these modifications are working or not,” he says.
A significant benefit of receiving this funding includes gaining access to the vital information necessary for data analysis. Much of property data is not publicly available, and this will enable Respighi Grasso to access the University of California Consumer Credit Panel and LightBox data without financial barriers. Additionally, winning this grant has been a validating step in conducting research with real-world impact.
“Getting selected for this grant has shown me that what I’m doing is going to be useful for society, which is a great thing and will enable me to continue research in this direction even after my dissertation,” he said.