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I think you're wrong. In Prague, they started removing rent controls several years ago, and we have seen highest increase in property values in maybe three deca

• jeffbax 8y ago
  Rent control being bad for the housing market is one of the few generally agreed upon conclusions across the political spectrum of economists https://www.econlib.org/library/Enc/RentControl.html https://www.econlib.org/library/Enc/RentControl.html > Economists are virtually unanimous in concluding that rent controls are destructive. In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing available.” Your gut instinct, like most on this issue, is incorrect. When removing rent control, it is going to take time for things to finally settle to the real prices as well as actual development to get started, but its certainly good for the long run to do away with it.
  • jayd16 8y ago
    The reason this subject is tough is because quantity and quality do not necessarily lead to affordability for the same population as rent control. Laissez Faire economics always works for the faceless theoretical self interested actor but how are rising prices and new builds going to help to someone from being priced out? It can't. If it did, the control would be benign anyway.
    • skewart 8y ago
      > quantity and quality do not necessarily lead to affordability for the same population as re t control. Rent control is not need-based. People across the wealth spectrum enjoy the personal benefits of rent control (in SF there is no shortage of housholds bringing home several hundred thousand dollars a year who pay way below market rents on their rent-controlled apartments). The problem with getting rid of it is that the benefits of more housing supply relative to demand would probably take decades to come to fruition. But the pain of suddenly losing rent control (for the percentage of people who actually do need it) is felt immediately. Who cares if your city will have lots of cheap housing in a decade if you can't pay rent next month?
      • jeffbax 8y ago
        This is all conjecture from your gut. We are watching what rent control does to a city like SF in real time -- it is a disaster. The only way out of it is to ramp up supply. To whatever degree Tokyo has priced anyone out, it is significantly less than the likes of most US cities because it does not purposefully retard investment with zoning and rent control. "People across the wealth spectrum" do NOT enjoy rent control. It gets gamed and abused. The bulk of SF is rent controlled, resulting in more and more people cramming into places that don't get maintained and they're not able to move out of when situations like their job changes. This is a disaster, nobody can move to be closer to work. Only a tiny amount of market rate housing is available for new residents which is disproportionately high because the rest of the market is severely under-priced. You will never stop everyone from getting priced out. That is just the nature of things, but you can save a lot more people that pain than we do now due to foolish policies like rent control and awful zoning.
• AnthonyMouse 8y ago
  > In Prague, they started removing rent controls several years ago, and we have seen highest increase in property values in maybe three decades. Property values are not the same as rents or general housing costs. As soon as you make construction more profitable, it makes the land worth more -- property values go up. But then the construction happens and housing costs, i.e. price per unit, go down as a result of more units. Before you had two housing units on $500K in land going for $1000/month. After the land is worth $2M but it has 20 housing units going for $750 -- and the landlord is making more revenue, because 20x$750 is more than 2x$1000, enough to offset the higher property cost. > Also, if I owned some property, I am not sure I would want to invest in building new one and have to decrease rent rather than enjoy the fact that the rent is high. Rent doesn't materially decrease as a result of one person building one building, it's a result of many new buildings across the city. So your choice isn't between the existing two units at $1000 and twenty new ones at $750 (though even that itself is still profitable), because if you do nothing the existing units will still fall to $750 each as a result of what other people do once they're allowed to do it. > More important is probably lack of actual housing construction financed by government. Actual construction subsidies might help when you have a massive shortage and you want it correct it quickly, but in general it isn't necessary -- when rents are high and construction is permitted, it happens.
• conanbatt 8y ago
  > In Prague, they started removing rent controls several years ago, and we have seen highest increase in property values in maybe three decades. Cant speak for prague, but if you remove rent-controls, rent is going to go up, simlpy because suppressed rent values will go up. If volume remained the same, you would expect to see a decrease in some properties and a high increase in the de-regulated ones. Bear in mind that there is also elasticity: if more properties go on the market and prices go down, you could see a higher volume of people coming in. That's a much better metric of success than price.