4 ms·

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 bas

by 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.

by pfisch 8y ago

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.