Supply vs. Demand – and Demand is winning

The Boston Zoning Commission voted yesterday to approve the City Council’s measure to cap students renting off-campus apartments at 4 per unit, without regard to its size. (Read the Globe’s front page article here.) Now I’m sympathetic to what motivated this measure in the first place: I’m pretty sure if my wife and I lived in Allston or Mission Hill, next door to the noise and the revelry, we’d be annoyed as all get up too. Nevertheless, what this measure will most likely not do is bring rental rates in the neighborhoods around the city’s colleges and universities back down to what proponents might call an affordable level. As some of the displaced students would (hopefully, if they paid attention during their Intro to Econ lectures) be able to explain, constricting supply tends to inflate prices, not the other way around.