4 ms·

Two main thoughts here. First I love that municipalities are thinking creatively about the housing crisis. Second, I’m curious to see how policies like this end

Two main thoughts here. First I love that municipalities are thinking creatively about the housing crisis. Second, I’m curious to see how policies like this end up playing out in practice. I can think of a bunch of negative outcomes such as rental properties degenerating and home builders getting less work. In the end we can’t know what’s going to work until the experiment plays out which to my first point is why it’s very encouraging to see so many places trying different policies.

macspoofing 8y ago
>I can think of a bunch of negative outcomes such as rental properties degenerating Why would that be the case unless the property was losing money. Typically people care about properties that provide an income.
- klodolph 8y ago
  People generally care that the property provides income, not that it’s in good condition. Higher rents can cause a depression in renovations, because the higher rent increases the opportunity cost of doing renovations. This is quite visible in some cities.
pfisch 8y ago
This is very obviously not going to work out well. This policy means the total rentable property supply will now not increase and only decrease for X years based on this policy. Rents are going to spike throughout the city. Trying to mess with the free market like this almost always has a bunch of unintended consequences and rarely works as intended.
- bertil 8y ago
  It’s possible that the rental market will favour non-new properties and that houses currently needing restoration will find new owners who will invest, in order to rent them more easily (and at a higher price).
- mbreese 8y ago
  I don’t think it’s obvious how this will turn out at all. What you state is one possible outcome, but it’s not clear that is what will happen. 1) rental properties can still be built, they just have to be designated as such before their construction is approved 2) the price limits were designed to still make it possible to profitably build a new house, so the market will still produce new homes (maybe at a different rate) 3) they also put in place quotas for low, middle, and upper priced housing, guaranteeing a varied supply on the market. 4) middle income families will no longer need to compete with people buying investment rental homes, meaning they will be more able to buy affordable homes. This frees up rental property elsewhere in the system for someone else. Housing markets are almost never free markets. It’s quite rare to see a completely free market for where and what kind of housing is built. This is at least an attempt to make sure that entire part of the population isn’t left out of owing a home. Maybe it works, maybe it doesn’t. That’s the great part of government — if it doesn’t work, those in charge can be replaced by the citizens. I’m interested to see where the experiment goes.
jseliger 8y ago
Two main thoughts here. First I love that municipalities are thinking creatively about the housing crisis. "I Will Do Anything to End Homelessness Except Build More Homes:" https://www.mcsweeneys.net/articles/i-will-do-anything-to-end-homelessness-except-build-more-homes https://www.mcsweeneys.net/articles/i-will-do-anything-to-en.... There is no need for "creative" solutions; this is a straightforward supply-demand mismatch.

macspoofing 8y ago

>I can think of a bunch of negative outcomes such as rental properties degenerating Why would that be the case unless the property was losing money. Typically people care about properties that provide an income.

klodolph 8y ago
People generally care that the property provides income, not that it’s in good condition. Higher rents can cause a depression in renovations, because the higher rent increases the opportunity cost of doing renovations. This is quite visible in some cities.

pfisch 8y ago

This is very obviously not going to work out well. This policy means the total rentable property supply will now not increase and only decrease for X years based on this policy. Rents are going to spike throughout the city. Trying to mess with the free market like this almost always has a bunch of unintended consequences and rarely works as intended.

bertil 8y ago
It’s possible that the rental market will favour non-new properties and that houses currently needing restoration will find new owners who will invest, in order to rent them more easily (and at a higher price).
mbreese 8y ago
I don’t think it’s obvious how this will turn out at all. What you state is one possible outcome, but it’s not clear that is what will happen. 1) rental properties can still be built, they just have to be designated as such before their construction is approved 2) the price limits were designed to still make it possible to profitably build a new house, so the market will still produce new homes (maybe at a different rate) 3) they also put in place quotas for low, middle, and upper priced housing, guaranteeing a varied supply on the market. 4) middle income families will no longer need to compete with people buying investment rental homes, meaning they will be more able to buy affordable homes. This frees up rental property elsewhere in the system for someone else. Housing markets are almost never free markets. It’s quite rare to see a completely free market for where and what kind of housing is built. This is at least an attempt to make sure that entire part of the population isn’t left out of owing a home. Maybe it works, maybe it doesn’t. That’s the great part of government — if it doesn’t work, those in charge can be replaced by the citizens. I’m interested to see where the experiment goes.

jseliger 8y ago

Two main thoughts here. First I love that municipalities are thinking creatively about the housing crisis. "I Will Do Anything to End Homelessness Except Build More Homes:" https://www.mcsweeneys.net/articles/i-will-do-anything-to-end-homelessness-except-build-more-homes https://www.mcsweeneys.net/articles/i-will-do-anything-to-en.... There is no need for "creative" solutions; this is a straightforward supply-demand mismatch.