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The consensus exists only on the thin slice of debate that pertains to economics. Economists agree that rent control, all other things held equal, reduces hous

by romed 8y ago

The consensus exists only on the thin slice of debate that pertains to economics. Economists agree that rent control, all other things held equal, reduces housing supply. Nobody seriously debates. However there are moral and ethical and sociological dimensions to the question. For example: allowing rents to rise to whatever the market will bear effectively rewards landlords for creating scarcity. Should landlords be rewarded for creating scarcity? Or should they be punished for it? Do long-domiciled tenants who have contributed to the desirability of a place have a legitimate interest in being allowed to stay there? My main beef with this piece is that HN pretends to keep politics off the front page but here we have right-wing propaganda masquerading as science on election day where the issue is on the ballot in California. If we're going to allow advocacy then the mods should stop automatically flagging whole classes of posts.

gwright 8y ago
You seem to be ignoring the self-regulating aspect of a free market. As landlords rake in more money there are more and more incentives to develop new properties to take advantage of the profit opportunity. The market mechanism works to mitigate run-away profits. It seems to me that government restrictions on supply or new competitors is the most common reason for the absence of competition and higher prices paired with high profits.
- romed 8y ago
  You must live somewhere else. Here in California the landlords have rigged everything so that it's impossible to build. They are well-protected from new market entrants. In addition, we have statewide rent control for landlords, in the form of Proposition 13.
  - Bartweiss 8y ago
    It's (at best) a wicked problem, in the original policy sense. Proposition 13 is understandable for the same reasons rent control is, but also terrible policy for (some of) the same reasons as rent control. California's total unwillingness to build new housing (at least where people want to live) is even worse policy, although I object to seeing it attributed solely to landlords. The combination means all possible cost-fighting solutions will fail; all thats left is to decide how to distribute the damage. And so all of the policy options also suck. Rent control is at most a stopgap for some current renters, which does nothing for those newly seeking housing, further discourages construction (it may not apply to new developments, but it sets precedent and they're going to be old developments eventually), and rewards landlords for driving away their tenants. Repealing Prop 13 is not only unattainable but likely to drive out the most vulnerable owners as broke cities try to repair their budgets. Restricting Prop 13 to non-rental properties suitably targets rentiers, but threatens even faster tax growth due to the smaller base - which will render leasing unprofitable with rent control or passed on to tenants without it. Even building new housing, the only thing that really stands to unwind the problem, is a mess. At small or moderate levels it will only slow growth and encourage people to move in, while at large rent-reducing scales it will wipe out every non-rentier property owner who bought at inflated rates. So, yes, California's housing looks more or less hopeless. In most places I'm against rent control as a bad solution to a solvable problem. In California... dilemmas have outcomes.

by romed 8y ago

gwright 8y ago

You seem to be ignoring the self-regulating aspect of a free market. As landlords rake in more money there are more and more incentives to develop new properties to take advantage of the profit opportunity. The market mechanism works to mitigate run-away profits. It seems to me that government restrictions on supply or new competitors is the most common reason for the absence of competition and higher prices paired with high profits.

romed 8y ago
You must live somewhere else. Here in California the landlords have rigged everything so that it's impossible to build. They are well-protected from new market entrants. In addition, we have statewide rent control for landlords, in the form of Proposition 13.
- Bartweiss 8y ago
  It's (at best) a wicked problem, in the original policy sense. Proposition 13 is understandable for the same reasons rent control is, but also terrible policy for (some of) the same reasons as rent control. California's total unwillingness to build new housing (at least where people want to live) is even worse policy, although I object to seeing it attributed solely to landlords. The combination means all possible cost-fighting solutions will fail; all thats left is to decide how to distribute the damage. And so all of the policy options also suck. Rent control is at most a stopgap for some current renters, which does nothing for those newly seeking housing, further discourages construction (it may not apply to new developments, but it sets precedent and they're going to be old developments eventually), and rewards landlords for driving away their tenants. Repealing Prop 13 is not only unattainable but likely to drive out the most vulnerable owners as broke cities try to repair their budgets. Restricting Prop 13 to non-rental properties suitably targets rentiers, but threatens even faster tax growth due to the smaller base - which will render leasing unprofitable with rent control or passed on to tenants without it. Even building new housing, the only thing that really stands to unwind the problem, is a mess. At small or moderate levels it will only slow growth and encourage people to move in, while at large rent-reducing scales it will wipe out every non-rentier property owner who bought at inflated rates. So, yes, California's housing looks more or less hopeless. In most places I'm against rent control as a bad solution to a solvable problem. In California... dilemmas have outcomes.