Who would Benefit from Rent Control in Philadelphia?

As rent continues to rise at a rate faster than wages and inflation for most Americans, many people think that rent control could help.

Previously, I made a Rent Change Map for Philly that shows that most areas had rent increase faster than inflation between the 2000 Census and the 2009-2013 American Community Survey.

I decided to extend this analysis by looking at which demographic groups might benefit the most from rent control.

My hypothesis was that rent control would provide a greater benefit to areas that having booming real-estate markets (aka gentrification) and that these areas would have more white people and a greater median household income than the city average.

I analyzed the 384 census tracts in Philadelphia and found several very weak relationships.

The correlation between the change in rent (after inflation!) and the follow variables:
Income: 0.099 -- 93.6% chance of being statically significant
Black: -0.105 -- 95.1% chance of being significant
White: 0.062 -- 75.5% chance of being significant
Hispanic: 0.059 -- 72.7% chance of being significant
Asian: 0.102 -- 94.3% chance of being significant

By "significant" I mean the probability that we're seeing an existing relationship and not just random noise.

In general these relationships are very weak. Statisticians generally require 95% or 99% significance, in which case only the black correlation would pass muster.

For the most significant relationships (Income, Black, Asian) - they only explain 1% of the outcome. So a massive 99% of the outcome is caused by other factors.

Areas that have higher income and a higher percent of Asians have slightly larger rent increases. Areas with a larger percent of Blacks have slightly lower rent increases.

You can see how weak the relationship is between percent Black and Rent Change in this scatterplot which mostly just shows how segregated the city is (as most of our census tracts are polarized and either 80-100% Black or 0-20% Black).

The income relationship might be slightly reduced by the fact that neighborhoods like West Philly (which has a greater than average rent increase) have depressed income statistics due to the large number of students who come from high income families but are only reporting their own student income.

One interesting category is areas that had a decrease in rent (after inflation), 58.1% Black (high), 31.6% White (low), 4.6% Asian (low), and 4.4% Hispanic (very low). These areas also had a low median household income of $37,200 vs the citywide median of $39,500.

So if Philadelphia had enacted rent control over the past decade, the benefits would be spread rather randomly to people in neighborhoods in a way that isn't dependent on the racial or income demographics of that neighborhood. On the other hand, this analysis does NOT directly deal with individuals. For instance, it is likely that higher income households are more likely to own homes and not benefit from rent control (though new home buyers may benefit from decreased housing prices). If there is a small group of low income households and a larger group of high income households in a neighborhood, and the neighborhood thus has a medium-high income - it is possible that the low income households receive the majority of the benefit from the rent control or the larger group of high income households might get it.

This analysis also only handles the past decade. The future could be completely different.