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Economic theory says rent control should create shortages, not necessarily drive up rates. But, since rent control is only on a few building, it increases rent
by randyrand 10y ago
Economic theory says rent control should create shortages, not necessarily drive up rates.
But, since rent control is only on a few building, it increases rents in the rest of them.
The options are:
1. rent control everything, and let there be shortages, old buildings, etc
2. rent control some, and let half the city be expensive
3. build housing.
- btilly 10y agoSupply/demand curves say that creating shortages will drive up rates. If you rent control everything, you will create black markets at much higher rates. Other than that, you're right. Except that in the case of San Francisco, most of the city is under rent control. However the rate resets to the current market rate every time a tenant moves out and another moves in. If you assume regular renter turnover, then rent control changes the short-term path but does not necessarily change the long-term trajectory of rents much. Reality says at least one of three things will be true. You can be undesirable to live in, build lots of housing, or have rising rents. San Francisco tries to avoid all three, and does less to prevent rents going up than the others so that is what happens.
- ThrustVectoring 10y ago> If you assume regular renter turnover Your modus ponens is my modus tollens. People want to avoid their rent going up over the long run, so they react to rent controls by increasing their willingness to commute instead of moving.