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I dont understand what the argument of this article is. As someone who has tried to maintain a blue collar job in a large city (im an engine mechanic) Its nea

I dont understand what the argument of this article is. As someone who has tried to maintain a blue collar job in a large city (im an engine mechanic) Its nearly impossible to live anywhere near your job without rent control. It was good work and good pay, but spending 65% of it on rent? what incentive do i have to stay when the median home price is a million dollars or more? the thing this article does not take into account is the fact that without rent control or some form of affordable housing, that "amazing city" you live in grinds to a halt pretty fast. Try living in a city where the bus system never sees regular maintenance because the motor pool is 2 hours away. broken down garbage trucks just sit in the road because wrecker crews cant afford to live anywhere near the metropolis. Ambulances and fire trucks might, or might not, make it to a destination because the fleet techs with diesel certification like myself dont live in your city. pipefitters and machinists need a place in your city if you want clean healthy water and sewage service. And the next time a drunk backs over a telephone pole, you're going to need a lineman or three to fix it.

refurb 8y ago
I think the point of the article is that rent control, although it may help a select few people, generally decreases the supply of housing, so is actually bad if your goal is to create more housing at an affordable price.
- konceptz 8y ago
  The way you worded this implies that it helps a very small number compared to how much housing it takes away. Isn’t it the same number?
  - Bartweiss 8y ago
    That depends almost entirely on what kind of rent control gets implemented. If you only ever rent control 100 units, then yeah, it should only affect the owners of those units. You might have some other problems with it, it incentivizes slumlording, but it shouldn't be a systematic disincentive to build housing. But that also only helps 100 people. If you expand rent control onto more existing properties or mandate that new units be built under rent control (or even just have credible candidates talking about doing that), it's a disincentive to anyone looking at offering rental properties - especially cheap rental properties, which are much more likely to become a net loss as prices rise.
  - gbear605 8y ago
    Where there is rent control, there is less incentive to build housing, therefore fewer houses.
    - floatrock 8y ago
      nah man, this argument gets torn apart because "rent control doesn't apply to new developments so it's neutral on new development" What it does is it takes rental units off the market because being faced with the maintenance risk of 5 or 20 year or however long the tenant stays fixed income vs. convert it to owner-occupied housing and take a large payout now, landlords often choose to ellis up the place. And if they don't remove rental stock, then they're incentivized to provide shittier service -- delay repairs, delay upkeep, ignore tenant requests -- to encourage the rent-controlled tenant to move elsewhere so they can reset their price.
      - tynpeddler 8y ago
        >this argument gets torn apart because "rent control doesn't apply to new developments so it's neutral on new development" Most implementations of rent control make it difficult to redevelop those properties into higher density housing. After all, if you could remove people from those units to redevelop, rent control wouldn't be worth much. This reduces total housing available which drives up prices elsewhere. Rent control is always a massive wealth transfer to a couple of winners from a massive number of losers.
woah 8y ago
What would be better is if anyone who wanted to live in the city could afford a reasonably priced dwelling. Rent control inadvertently harms that, turning the city into a two tiered system of the hyper-rich who can afford market rate, and those who serve them, who either have to win the rent control lottery or win the subsidized housing lottery.
- nradov 8y ago
  That's not a realistic goal for geographically constrained cities. Everyone who wants to can't live in New York or San Francisco. There are limits to density while still preserving a reasonable quality of life.
  - woah 8y ago
    That’s ridiculous. Have you ever been to SF? 3/4s of the city is single story suburbs, where it is illegal to build over 3 stories.
chimeracoder 8y ago
> I dont understand what the argument of this article is. As someone who has tried to maintain a blue collar job in a large city (im an engine mechanic) Its nearly impossible to live anywhere near your job without rent control. Therein lies the problem. Rent control is not the only way to make housing affordable to low-income people. It's not the most efficient or effective way, either. But it persists, because politically it's an easy concept (even if it's an ineffective one), and it also creates a stable voting bloc that will protect it, even if they don't actually need the rent control[0]. [0] In most places, rent control isn't means-tested, so you can end up with incredibly wealthy people living in very valuable properties for next to nothing. Ed Koch, the former mayor of NYC with a net worth of about $10 million, died living in a multimillion dollar penthouse apartment that he rented for $300/month, because the apartment was subject to rent control.
- oxryly1 8y ago
  It persists because it's the only remotely affordable housing positive legislation that appeals to both renters _and_ homeowners. New market-rate development that would keep pace with demand is consintently zoned and voted out by the electorate. It's an issue in every city in CA for sure.
  - chimeracoder 8y ago
    > It persists because it's the only remotely affordable housing positive legislation that appeals to both renters _and_ homeowners. It's really not at all, and I don't know where you get the idea that rent control appeals to homeowners (homeowners hate it!). > New market-rate development that would keep pace with demand is consintently zoned and voted out by the electorate. It's an issue in every city in CA for sure. There are plenty of other programs which are much more effective. In California, no, but that's not the only place to look for examples.
    - oxryly1 8y ago
      Well, I guess its more accurate to say it's the only thing that homeowners will even tolerate -- they do in my city. It's the landlords that hate it, but fortunately they don't get a lot of sympathy in my town's electorate. Now if you talk zoning and granting permits, that's where the hate really begins. And yes, I'm referring to CA where the housing-as-investment vehicle has distorting things more than most other places.
abfan1127 8y ago
When there is high demand for a product, including housing, the market has to respond. High prices attract investment in more housing, usually denser housing. Rent Control prevents the market signals from working. There is no incentive to construct more housing because its not worth it. Additionally, if blue collar jobs can't be filled because its not worth the pay+commute, then either wages have to raise or these go undone. If the market isn't allowed to operate, then you can't expect these systems to work.
- supercanuck 8y ago
  the problem is there is market failure. The Housing Asset is more valuable as a financial instrument than the actual utility it provides. This is why you see homes sitting empty in Manhattan.
  - refurb 8y ago
    The market is failing because of the distortions introduced by things like mortgage tax deduction, 30-year term mortgages, restrictions on new housing, etc.
    - onemoresoop 8y ago
      Could you please elaborate on that? Thanks
      - refurb 8y ago
        There are gov't policies that make it much easier to get money to purchase a home. 30 year mortgages were created by the gov't which locks in low payments. Mortgage tax deduction lowers the effective cost of a mortgage. Easier to get money to buy a home -> price of homes go up. Normally when prices go up, supplier (homebuilders) have an incentive to produce more housing, countering the increase in price. However, many cities (SF is a great example) make it very hard to build new housing. Restriction on supply with increasing demand -> price of homes go up.
      - 8y ago
cascom 8y ago
Alternatively - if all the engine mechanics decided they could no longer afford to live in the city and moved away, what do you think would happen to engine mechanic wages?
- oxryly1 8y ago
  They rise slightly so that mechanics with the ability to commute for 3 hours a day are the only ones who work in the city.
  - kypro 8y ago
    Assuming that did happen - which I doubt - what's so wrong with that? Presumably they're only willing to commute 3 hours because they feel they're getting a better deal than what they could get locally? Why would you force them to choose what they consider a worse job?
    - oxryly1 8y ago
      Nothing wrong with it per se. The externalities of it are a disaster, though: carbon depletion and pollution, traffic congestion, traffic related injuries and death, feeding the automotive industrial beast, less time for family and community commitments, less sense of belonging, etc etc...
  - circlefavshape 8y ago
    Exactly! Life gets shittier for mechanics. And cleaners. And teachers ... until eventually it doesn't matter, because all accommodation in the city is owned by investors who don't actually live there
- ohithereyou 8y ago
  Thank you. The main way people are looking at this article is from the housing cost side and less from the wages side. If your community prices out certain essential services then those providing the service will leave, raising the price of that service, thereby ensuring that those that stay (or come back after the price changes) can make a living, can have a wage that allows them to pay for housing in the city. Rent control distorts this type of adjustment, indirectly providing a subsidy that benefits those that could afford to pay market rate for a service by allowing those that provide the service to live below market rate and thus charge less.
sologoub 8y ago
Firstly, what you are describing is nothing short of a disaster for society. It’s not just SF either - many urban centers are plagued by this problem. Unfortunately, if as a society we insist on continuing to concentrate, we have to build denser housing. SF is very behind the building needs, as are most West Coast cities. Rent control has made the situation a lot worse in Santa Monica because you have a lot of old single story multifamily housing that cannot be redeveloped because it’s too expensive to buy out the existing tenants and the tenants have zero incentive to agree to a buyout. This locks out most development. In Santa Monica, we could literally triple the density within existing laws, but this will not happen because of rent control laws.
- oxryly1 8y ago
  You left out the strongly anti-development electorate in Santa Monica. There was a measure on the ballot last year to restrict all development over 32 feet to require a city-wide vote. It was only narrowly defeated. Rent control is just a scapegoat against that.
  - ilikehurdles 8y ago
    I'm starting to shift more and more to the idea that it's no one's right to live in a specific place. Nobody owes you development. People who live in a city are just exercising their own right to fight to preserve something about it that others seek to take away. In Boston, for example, I would love cheaper places to live in the city, but there's no way I'd want to see the historic brownstone neighborhoods demolished. If they were, my desire to live in Boston would quickly drop. Much of that architecture is what makes the city what it is. The people there who lived through the West End's transformation realized they didn't want that to continue, and their attitudes toward development quickly shifted. Everyone knows what Manhattan is like and not everyone wants to live in such an environment. In the end, someone will live there. Someone will work there. Someone will open businesses to serve the residents. Someone will need to employ blue collar workers, and blue collar workers will need the means to get to their job from a reasonable distance. Some residents don't want to turn their neighborhoods into high rises and traffic nightmares. I don't blame them any more than I blame workers for wanting to be able to live near work and not spend 60% of their income on rent. And frankly these discussions on HN always dance around the special protected class of persion - people who use urban real estate as an investment vehicle slash secondary home. Tax them harder, make vacant buildings less attractive to own and harder to profit on. Clamp down on unlicensed vacation rentals. Force them to release the property or adjust rents so that people can afford to live there. More units will open up, prices will drop, and no one has to see their street turned into a nightmare of ubers in the shadow of a generic high-rise.
nradov 8y ago
Rather than imposing arbitrary price caps which cause shortages, another alternative would be for blue collar workers to band together and demand higher wages so that they can afford market rate housing. Union strikes do work. After a couple months without buses, garbage pickup, or emergency services I suspect urbanites would be willing to pay higher taxes in order to give mechanics a living wage.
travisoneill1 8y ago
But this is exactly what the market is for. If there's no rent control one of 2 things happen: 1. you are forced to move out and services become unavailable in the high priced area 2. your rates increase and you can stay If option 1 happens it won't be an expensive area where people want to live anymore so problem solved either way.
netheril96 8y ago
> As someone who has tried to maintain a blue collar job in a large city (im an engine mechanic) What about the new blue collars who enter this city later than you? Rent control doesn't help lower rent for them, but arguably increases it by depressing supply.
flagfeedingusa 8y ago
Yuppies trying to explain how you are wrong for trying to eek out a living and take advantage of one of the few bones the upper class has managed to throw your way. Ignore and vote against eliminating rent control, and all the people arguing here can go on mute.
rsync 8y ago
"I dont understand what the argument of this article is. As someone who has tried to maintain a blue collar job in a large city (im an engine mechanic) Its nearly impossible to live anywhere near your job without rent control." Although I am not an economist, I believe that the point of the article (and of the economic consensus from both right-leaning and left-leaning economists) is that the affordability issues you cite are actually worse now than if there had not been rent control. Expanding on that ... rational landlords are going to: "front-load rent hikes, select tenants likely to stay for short periods, or provide poor service during tenancies if underlying market rents are rising rapidly. At worst, tenancy rent controls would increase overall market rents by raising risks to landlords and reducing investment in new stock, particularly if the controls are perceived as a precursor of more-onerous regulation." I think part of the confusion is that, other than the misaligned incentives and general bad behavior of landlords, someone who actually receives a rent-controlled unit is definitely better off than those who do not. If you win that little mini-lottery, you've got a definite gain. However, the overall market for rental housing - and any new entrants to the rental market - are made worse off. If you successfully converted the entire rental market to rent-controlled units, the market would respond: "That's because landlords confronted with the regulation are incentivized to convert properties to other, higher-return uses. Developers, meanwhile, find new rentable accommodations less profitable to build, compounding the scarcity-of-supply problem that often drives high rental prices in the first place."

refurb 8y ago

I think the point of the article is that rent control, although it may help a select few people, generally decreases the supply of housing, so is actually bad if your goal is to create more housing at an affordable price.

konceptz 8y ago
The way you worded this implies that it helps a very small number compared to how much housing it takes away. Isn’t it the same number?
- Bartweiss 8y ago
  That depends almost entirely on what kind of rent control gets implemented. If you only ever rent control 100 units, then yeah, it should only affect the owners of those units. You might have some other problems with it, it incentivizes slumlording, but it shouldn't be a systematic disincentive to build housing. But that also only helps 100 people. If you expand rent control onto more existing properties or mandate that new units be built under rent control (or even just have credible candidates talking about doing that), it's a disincentive to anyone looking at offering rental properties - especially cheap rental properties, which are much more likely to become a net loss as prices rise.
- gbear605 8y ago
  Where there is rent control, there is less incentive to build housing, therefore fewer houses.
  - floatrock 8y ago
    nah man, this argument gets torn apart because "rent control doesn't apply to new developments so it's neutral on new development" What it does is it takes rental units off the market because being faced with the maintenance risk of 5 or 20 year or however long the tenant stays fixed income vs. convert it to owner-occupied housing and take a large payout now, landlords often choose to ellis up the place. And if they don't remove rental stock, then they're incentivized to provide shittier service -- delay repairs, delay upkeep, ignore tenant requests -- to encourage the rent-controlled tenant to move elsewhere so they can reset their price.
    - tynpeddler 8y ago
      >this argument gets torn apart because "rent control doesn't apply to new developments so it's neutral on new development" Most implementations of rent control make it difficult to redevelop those properties into higher density housing. After all, if you could remove people from those units to redevelop, rent control wouldn't be worth much. This reduces total housing available which drives up prices elsewhere. Rent control is always a massive wealth transfer to a couple of winners from a massive number of losers.

woah 8y ago

What would be better is if anyone who wanted to live in the city could afford a reasonably priced dwelling. Rent control inadvertently harms that, turning the city into a two tiered system of the hyper-rich who can afford market rate, and those who serve them, who either have to win the rent control lottery or win the subsidized housing lottery.

nradov 8y ago
That's not a realistic goal for geographically constrained cities. Everyone who wants to can't live in New York or San Francisco. There are limits to density while still preserving a reasonable quality of life.
- woah 8y ago
  That’s ridiculous. Have you ever been to SF? 3/4s of the city is single story suburbs, where it is illegal to build over 3 stories.

chimeracoder 8y ago

> I dont understand what the argument of this article is. As someone who has tried to maintain a blue collar job in a large city (im an engine mechanic) Its nearly impossible to live anywhere near your job without rent control. Therein lies the problem. Rent control is not the only way to make housing affordable to low-income people. It's not the most efficient or effective way, either. But it persists, because politically it's an easy concept (even if it's an ineffective one), and it also creates a stable voting bloc that will protect it, even if they don't actually need the rent control[0]. [0] In most places, rent control isn't means-tested, so you can end up with incredibly wealthy people living in very valuable properties for next to nothing. Ed Koch, the former mayor of NYC with a net worth of about $10 million, died living in a multimillion dollar penthouse apartment that he rented for $300/month, because the apartment was subject to rent control.

oxryly1 8y ago
It persists because it's the only remotely affordable housing positive legislation that appeals to both renters _and_ homeowners. New market-rate development that would keep pace with demand is consintently zoned and voted out by the electorate. It's an issue in every city in CA for sure.
- chimeracoder 8y ago
  > It persists because it's the only remotely affordable housing positive legislation that appeals to both renters _and_ homeowners. It's really not at all, and I don't know where you get the idea that rent control appeals to homeowners (homeowners hate it!). > New market-rate development that would keep pace with demand is consintently zoned and voted out by the electorate. It's an issue in every city in CA for sure. There are plenty of other programs which are much more effective. In California, no, but that's not the only place to look for examples.
  - oxryly1 8y ago
    Well, I guess its more accurate to say it's the only thing that homeowners will even tolerate -- they do in my city. It's the landlords that hate it, but fortunately they don't get a lot of sympathy in my town's electorate. Now if you talk zoning and granting permits, that's where the hate really begins. And yes, I'm referring to CA where the housing-as-investment vehicle has distorting things more than most other places.

abfan1127 8y ago

When there is high demand for a product, including housing, the market has to respond. High prices attract investment in more housing, usually denser housing. Rent Control prevents the market signals from working. There is no incentive to construct more housing because its not worth it. Additionally, if blue collar jobs can't be filled because its not worth the pay+commute, then either wages have to raise or these go undone. If the market isn't allowed to operate, then you can't expect these systems to work.

supercanuck 8y ago
the problem is there is market failure. The Housing Asset is more valuable as a financial instrument than the actual utility it provides. This is why you see homes sitting empty in Manhattan.
- refurb 8y ago
  The market is failing because of the distortions introduced by things like mortgage tax deduction, 30-year term mortgages, restrictions on new housing, etc.
  - onemoresoop 8y ago
    Could you please elaborate on that? Thanks
    - refurb 8y ago
      There are gov't policies that make it much easier to get money to purchase a home. 30 year mortgages were created by the gov't which locks in low payments. Mortgage tax deduction lowers the effective cost of a mortgage. Easier to get money to buy a home -> price of homes go up. Normally when prices go up, supplier (homebuilders) have an incentive to produce more housing, countering the increase in price. However, many cities (SF is a great example) make it very hard to build new housing. Restriction on supply with increasing demand -> price of homes go up.
    - 8y ago

cascom 8y ago

Alternatively - if all the engine mechanics decided they could no longer afford to live in the city and moved away, what do you think would happen to engine mechanic wages?

oxryly1 8y ago
They rise slightly so that mechanics with the ability to commute for 3 hours a day are the only ones who work in the city.
- kypro 8y ago
  Assuming that did happen - which I doubt - what's so wrong with that? Presumably they're only willing to commute 3 hours because they feel they're getting a better deal than what they could get locally? Why would you force them to choose what they consider a worse job?
  - oxryly1 8y ago
    Nothing wrong with it per se. The externalities of it are a disaster, though: carbon depletion and pollution, traffic congestion, traffic related injuries and death, feeding the automotive industrial beast, less time for family and community commitments, less sense of belonging, etc etc...
- circlefavshape 8y ago
  Exactly! Life gets shittier for mechanics. And cleaners. And teachers ... until eventually it doesn't matter, because all accommodation in the city is owned by investors who don't actually live there
ohithereyou 8y ago
Thank you. The main way people are looking at this article is from the housing cost side and less from the wages side. If your community prices out certain essential services then those providing the service will leave, raising the price of that service, thereby ensuring that those that stay (or come back after the price changes) can make a living, can have a wage that allows them to pay for housing in the city. Rent control distorts this type of adjustment, indirectly providing a subsidy that benefits those that could afford to pay market rate for a service by allowing those that provide the service to live below market rate and thus charge less.

sologoub 8y ago

Firstly, what you are describing is nothing short of a disaster for society. It’s not just SF either - many urban centers are plagued by this problem. Unfortunately, if as a society we insist on continuing to concentrate, we have to build denser housing. SF is very behind the building needs, as are most West Coast cities. Rent control has made the situation a lot worse in Santa Monica because you have a lot of old single story multifamily housing that cannot be redeveloped because it’s too expensive to buy out the existing tenants and the tenants have zero incentive to agree to a buyout. This locks out most development. In Santa Monica, we could literally triple the density within existing laws, but this will not happen because of rent control laws.

oxryly1 8y ago
You left out the strongly anti-development electorate in Santa Monica. There was a measure on the ballot last year to restrict all development over 32 feet to require a city-wide vote. It was only narrowly defeated. Rent control is just a scapegoat against that.
- ilikehurdles 8y ago
  I'm starting to shift more and more to the idea that it's no one's right to live in a specific place. Nobody owes you development. People who live in a city are just exercising their own right to fight to preserve something about it that others seek to take away. In Boston, for example, I would love cheaper places to live in the city, but there's no way I'd want to see the historic brownstone neighborhoods demolished. If they were, my desire to live in Boston would quickly drop. Much of that architecture is what makes the city what it is. The people there who lived through the West End's transformation realized they didn't want that to continue, and their attitudes toward development quickly shifted. Everyone knows what Manhattan is like and not everyone wants to live in such an environment. In the end, someone will live there. Someone will work there. Someone will open businesses to serve the residents. Someone will need to employ blue collar workers, and blue collar workers will need the means to get to their job from a reasonable distance. Some residents don't want to turn their neighborhoods into high rises and traffic nightmares. I don't blame them any more than I blame workers for wanting to be able to live near work and not spend 60% of their income on rent. And frankly these discussions on HN always dance around the special protected class of persion - people who use urban real estate as an investment vehicle slash secondary home. Tax them harder, make vacant buildings less attractive to own and harder to profit on. Clamp down on unlicensed vacation rentals. Force them to release the property or adjust rents so that people can afford to live there. More units will open up, prices will drop, and no one has to see their street turned into a nightmare of ubers in the shadow of a generic high-rise.

nradov 8y ago

Rather than imposing arbitrary price caps which cause shortages, another alternative would be for blue collar workers to band together and demand higher wages so that they can afford market rate housing. Union strikes do work. After a couple months without buses, garbage pickup, or emergency services I suspect urbanites would be willing to pay higher taxes in order to give mechanics a living wage.

travisoneill1 8y ago

But this is exactly what the market is for. If there's no rent control one of 2 things happen: 1. you are forced to move out and services become unavailable in the high priced area 2. your rates increase and you can stay If option 1 happens it won't be an expensive area where people want to live anymore so problem solved either way.

netheril96 8y ago

> As someone who has tried to maintain a blue collar job in a large city (im an engine mechanic) What about the new blue collars who enter this city later than you? Rent control doesn't help lower rent for them, but arguably increases it by depressing supply.

flagfeedingusa 8y ago

Yuppies trying to explain how you are wrong for trying to eek out a living and take advantage of one of the few bones the upper class has managed to throw your way. Ignore and vote against eliminating rent control, and all the people arguing here can go on mute.

rsync 8y ago

"I dont understand what the argument of this article is. As someone who has tried to maintain a blue collar job in a large city (im an engine mechanic) Its nearly impossible to live anywhere near your job without rent control." Although I am not an economist, I believe that the point of the article (and of the economic consensus from both right-leaning and left-leaning economists) is that the affordability issues you cite are actually worse now than if there had not been rent control. Expanding on that ... rational landlords are going to: "front-load rent hikes, select tenants likely to stay for short periods, or provide poor service during tenancies if underlying market rents are rising rapidly. At worst, tenancy rent controls would increase overall market rents by raising risks to landlords and reducing investment in new stock, particularly if the controls are perceived as a precursor of more-onerous regulation." I think part of the confusion is that, other than the misaligned incentives and general bad behavior of landlords, someone who actually receives a rent-controlled unit is definitely better off than those who do not. If you win that little mini-lottery, you've got a definite gain. However, the overall market for rental housing - and any new entrants to the rental market - are made worse off. If you successfully converted the entire rental market to rent-controlled units, the market would respond: "That's because landlords confronted with the regulation are incentivized to convert properties to other, higher-return uses. Developers, meanwhile, find new rentable accommodations less profitable to build, compounding the scarcity-of-supply problem that often drives high rental prices in the first place."