Rent Freezes, Caps, and Bans on Pricing Software: Will Any of It Actually Lower Rent?

Renters are getting a burst of political attention. In the past year, New York approved a two-year rent freeze, Washington capped annual increases, New Jersey banned the pricing software regulators blame for coordinated hikes, Virginia gave tenants more time before eviction, and Massachusetts fought over whether to bring back rent control at all. The measures are popular and well intentioned. The harder question is whether any of them will actually lower what you pay.

The honest answer is that these policies do different things, and only some of them touch the price of rent at all. It helps to sort them into three buckets.

Three very different kinds of policy

Price limits are the most direct. These include the two-year rent freeze in New York, the 10% cap Washington set for 2027, and the long-running fight over rent control in Massachusetts. They cap or freeze what a landlord can charge, usually on existing tenants.

Bans on algorithmic pricing are newer. New Jersey and cities like Bellingham, Washington now bar landlords from using software, most prominently from RealPage, that sets rents off competitors' pricing and vacancy data. The theory is that these tools let rival landlords quietly move in lockstep instead of undercutting each other.

Tenant protections do not touch price at all. Virginia's longer grace period before eviction and the tenant measures in New York's Rental Ripoff report are about stability and habitability, keeping people housed rather than lowering the rent line.

What price limits actually do

Rent control and freezes are the most studied, and the findings are consistent. For tenants who already hold a controlled unit, the benefit is real and large: predictable rent, less displacement, more ability to stay in a neighborhood. A widely cited study of San Francisco by Stanford economist Rebecca Diamond and colleagues found rent control delivered exactly those gains to sitting tenants.

The same study found the catch. Faced with capped rents, landlords reduced the supply of rental housing by about 15%, converting units to condos or redeveloping, and that lost supply pushed market rents across the city up by roughly 5% over the long run. In other words, price limits tend to help the people inside a controlled unit while making the units outside it scarcer and pricier. A freeze is powerful relief for current renters and a weak tool for lowering rents overall.

Do the algorithm bans help?

The case against pricing software is different and, in some ways, more promising. If RealPage-style tools really did let concentrated landlords coordinate increases, then banning them removes an artificial boost rather than fighting the market itself. Regulators, including several state attorneys general, argue that is exactly what happened, and the lawsuits will test it.

But even if the bans work as intended, the effect is a trim, not a transformation. The software could nudge rents higher in markets where a few big landlords dominate and adoption was heavy. It cannot explain why rent is high in a city with plenty of small landlords and not enough homes. Removing the thumb on the scale is worth doing; it is not the same as fixing the scale.

What actually moved rent

The places where rent has genuinely fallen over the past two years did not freeze prices or ban software. They built. As we detailed in the great rent divergence, the Sun Belt metros that answered their pandemic rent surge with a record apartment-building boom, from Austin to Phoenix to Tampa, are the ones where rent has cooled back below its own long-term trend. Meanwhile the supply-starved coastal markets that never built enough, and where much of the price-control energy is concentrated, stayed hot.

That is the uncomfortable pattern behind the whole policy wave. The interventions cluster in expensive, low-supply cities, and the rent relief shows up in the cities that added units. Controls and bans are a response to scarcity; more housing is the thing that ends it.

So, will any of it help?

Yes, but modestly, and not in the way the headlines imply. Tenant protections like longer grace periods and eviction diversion are a clear win for vulnerable renters, and they cost the market nothing. Bans on coordinated algorithmic pricing are a reasonable check on collusion and may shave the top off increases in the most concentrated markets. Rent freezes and caps deliver strong, immediate relief to the tenants they cover, at the known long-term risk of discouraging the new supply that actually brings prices down.

What none of these measures do is build a single home. On the evidence, and on our own numbers, the most reliable way to lower rent is still the least flashy one: add enough housing that landlords have to compete for renters, instead of the other way around.

Further reading

• The Great Rent Divergence: the Sun Belt is cooling as the Midwest heats up

• New York approves a two-year rent freeze

• New Jersey bans RealPage-style rent-setting software

• Rebecca Diamond, Tim McQuade, and Franklin Qian, "The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco," American Economic Review, 2019