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The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco * Rebecca Diamondt, Tim McQuade$ , & Franklin Qian§ October 11, 2017 Abstract In this paper, we exploit quasi -experimental variation in the assignment of rent con- trol in San Francisco to study its impacts on tenants, landlords, and the rental market as a whole. Leveraging new micro data which tracks an individual's migration over time, we find that rent control increased the probability a renter stayed at their address by close to 20 percent. At the same time, we find that landlords whose properties were exogenously covered by rent control reduced their supply of available rental housing by 15%, by either converting to condos/TICS, selling to owner occupied, or redeveloping buildings. This led to a city-wide rent increase of 7% and caused $5 billion of welfare losses to all renters. We develop a dynamic, structural model of neighborhood choice to evaluate the welfare impacts of our reduced form effects. We find that rent con- trol offered large benefits to impacted tenants during the 1995-2012 period, averaging between $2300 and $6600 per person each year, with aggregate benefits totaling over $390 million annually. The substantial welfare losses due to decreased housing supply could be mitigated if insurance against large rent increases was provided as a form of government social insurance, instead of a regulated mandate on landlords. *Wc are grateful for comments from Ed Glaser, Christopher Palmer, Paul Scott, and seminar participants at the NEER, Real Estate Summer Institute, The Conference on Urban and Regional Economics, and the Stanford Finance Faculty Lunch. tStanford University & NBER. Email: diamondr@stanford.edu. tStanford University. Email: tmequadcUstanfbrd.edu . gStanfbrd University. Email: zgianl@stanford.edu .