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This article makes some interesting points, but I do find it strange that they reference George without referencing his famous idea of a land value tax in this

This article makes some interesting points, but I do find it strange that they reference George without referencing his famous idea of a land value tax in this context, a proposal which would at the very least put a sizeable dent in the ability of landlords to directly benefit from the increase in value of their land resulting from municipal service improvements while also encouraging better use of property in general. Rent controls could be another alleviating factor. As could indirect competition from subsidised/social housing. I'm not really comfortable with how the article attempts to frame municipal social improvements as something which must implicitly also drive wealth inequality, despite the other potential remedies to this.

Symmetry 8y ago
Rent control is good for the people who already have housing who don't see their rents go up, but it's bad for people who might want to move to an area. It's very much a "pull up the ladder behind you" sort of policy and in the case that the article addresses it will tend to weaken coalitions in favor of reducing housing prices for new home buyers/renters and will tend throw currently homeless people under the bus.
- crdoconnor 8y ago
  It's bad for people who might want to move to an area of you believe that rent control significantly affects the supply of housing. If you believe that then it might be worth pondering why New York's highest rate of homebuilding occurred when it had its strictest rent controls though. In reality all rent control really does is redistribute some the spoils of rising land values from certain owners to certain renters. This makes some property owners extremely angry but as far as renters and potential renters are concerned it's potentially good or potentially neutral. If you really want to incentivize home building you need to disincentivize land hoarding. That means repealing prop 13 or implementing LVT.
  - kortilla 8y ago
    Just because there was a boom during the time of ham fisted rent control does not mean it was caused by rent control nor does it imply that rent control was even good for it. Have you ever considered how much more housing might have been built if it weren’t for rent control?
    - crdoconnor 8y ago
      I don't think it necessarily was caused by rent control. It's still an extremely inconvenient fact for anybody advancing the hypothesis that rent control impedes housing development. It might very well be that the effect is real but is so weak that it is completely overwhelmed by other factors. It might also be that bringing down property values (which rent control will do) lowers the bar to housing development, spurring more of it.
  - kelnos 8y ago
    > In reality all rent control really does is redistribute some the spoils of rising land values from certain owners to certain renters. No, rent control also redistributes the burden of rising rental costs from people who have rent control to people who don't, and tends to make that burden larger than it would be otherwise. > If you really want to incentivize home building you need to disincentivize land hoarding. That means repealing prop 13 or implementing LVT. On this, we agree. And we can't just simply throw rent control in the trash overnight and expect everything to work out. It needs to happen in concert with other initiatives that increase the housing stock, and be phased out over time, with targeted help to more vulnerable people. But I don't expect any of this to happen, at least not until things get to people-are-rioting-in-the-streets levels.
    - crdoconnor 8y ago
      >No, rent control also redistributes the burden of rising rental costs from people who have rent control to people who don't Supply of apartments and demand for apartments doesn't suddenly change under rent control so no, there's no market pressure making non rent controlled apartments more expensive hence there is no redistribution between renters. Lucky renters get below market rate and unlucky renters get market rate. There is only re-redistribution from rentiers (landlords) back to renters. 1% -> 99%. I don't think rent control is the best solution for the housing crisis (100% LVT ftw) but it's intellectually dishonest to pretend that it hurts renters. It never has and it never will.
      - kelnos 8y ago
        > Supply of apartments and demand for apartments doesn't suddenly change under rent control Yes it absolutely does. Demand doesn't change, but supply is artificially reduced because people with rent control are less likely to want to (or be able to) move out.
        crdoconnor 8y ago
        People who don't move out aren't increasing supply but they also arent competing with other people seeking new apartments so they aren't increasing demand either. It's net neutral. Unless you're talking about the people forced on to the street or out of the city entirely by rising rents...?
  - inetknght 8y ago
    If I am renting somewhere, surely I am putting money into the local economy? If I am doing that, then surely I deserve some of the benefit of an improving economy? As it is, a renter is punished for improving the local economy because it improves the value and the cost of rent goes up. As it is, employers aren't exactly keeping up with inflation. Add in the increasing cost of rent? Time to move. Oh, wait, all the high tech jobs are highly concentrated when they don't need to be.
- coldtea 8y ago
  >Rent control is good for the people who already have housing who don't see their rents go up, but it's bad for people who might want to move to an area. I don't see the problem. "Wanna move to the area" is a choice. "I am forced out of my house because of higher rent" is not.
  - lr4444lr 8y ago
    Try rephrasing the first as "I can't move into the area because I even though I would gladly pay what a landlord would freely charge, his current lessee has a legal claim to renew at a rate below that."
  - lmm 8y ago
    Living in a particular place is always a choice. You shouldn't be entitled to get the same house at half the price just because of the accident of where you happened to be born.
    - paddy_m 8y ago
      There is a large section of the SF Bay area that is horrified at the idea of closed borders, yet they are as horrified at the idea of anyone new or poor moving into their neighborhood.
    - coldtea 8y ago
      Why not? If you were born there, you should have claims there. Would you extend this idea to property? After all everything you've inherited is like that too (an accident of birth). How about parents? Perhaps children should be assigned to random families at birth, to keep it fair? How about citizenship? Would you give up your citizenship because you being an X citizen is just an "accident of birth" (and as such not really entitled to it)? People don't have "accidents of birth". People are born in a place because their parents moved there. And the important part comes after the birth: people grew up there, played there as kids, connected with the place, etc. A place is part of a person's life history. It's not just a consumer good up for grabs by the highest bidder.
  - kortilla 8y ago
- naravara 8y ago
  >Rent control is good for the people who already have housing who don't see their rents go up, but it's bad for people who might want to move to an area. It's very much a "pull up the ladder behind you" sort of policy and in the case that the article addresses it will tend to weaken coalitions in favor of reducing housing prices for new home buyers/renters and will tend throw currently homeless people under the bus. You could defray those negative effects by building lots of public housing and/or heavily subsidizing new construction.
  - lmm 8y ago
    > You could defray those negative effects by building lots of public housing and/or heavily subsidizing new construction. To the extent that you actually do that, you will naturally lower the market rent to the level that you wanted, making rent control pointless (except that it removes the signal that would warn you when you need to build more housing).
    - naravara 8y ago
      >To the extent that you actually do that, you will naturally lower the market rent to the level that you wanted, making rent control pointless (except that it removes the signal that would warn you when you need to build more housing). You kind of answered your first clause with your second. Demand can rise very rapidly, but supply can only grow slowly. If you want to keep housing prices stabile for people so they're not being thrown out of their homes or displaced, public housing doesn't address that because you don't get the signal that it's a problem until after the displacement has happened.
  - kortilla 8y ago
    Or, just let private builders build. Housing is not magically immune to supply and demand. Only advocating for the government to increase supply isn’t a very effective solution.
    - naravara 8y ago
      >Housing is not magically immune to supply and demand. It kind of is because housing isn't the only component of housing value. Access to transit, safety, and public amenities like parks and schools are a huge component of what makes housing valuable. All of those things are public goods built by the government. Expecting private builders to build is just allowing public expenditure to line the pockets of a landowner who did nothing to add value to it.
- zjaffee 8y ago
  How ownership has a very similar effect as rent control, especially in California where prop 13 exists. Should we abolish home ownership and have everyone buy into a single rental market such that prices wouldn't be distorted beyond what median area incomes are. The issue at hand will always be that there isn't enough housing for newcomers, if we mandated housing construction to grow in a parallel way with office construction and job growth we wouldn't have nearly the sorts of problems we have today.
  - harryh 8y ago
    You don't have to mandate construction of housing. You just have to get rid of the INSANE barriers to housing construction that exist today in places like SF and the wider Bay Area.
    - zjaffee 8y ago
      This will sound counterintuitive but you absolutely have to mandate housing. Compare this to parking requirements, if we want an abundant housing supply we need to distort the market price of housing the same way we did for parking. Require that new offices build an equal square footage of housing on top of themselves, and you've immediately build enough housing for at least the initial stage of population growth that comes with that new office.
      - C4stor 8y ago
        I think you should hope to live in more than the handful of square meters than a classic tech worker occupies in an office. Housing people on the same ground area than the offices would probably prove to be a huge technical challenge since it would effectively need probably 8 to 10 times the square footage, not to mention I'm not quite sure people really all want to have their colleagues as neighbours.
        zjaffee 8y ago
        I'm not saying that the housing would need to go to those who work in the office, if anything it should be a part of the broader open market. I'm also not saying that the office needs to match the housing supply of it's office workers in full, as a lot of new office development is hiring from people locally as well. But say, if you looked at the Seattle area, where Microsoft and Amazon have built over 10 million square feet of office space in recent years, an extra 10,000 apartments would go a long way in relieving the pressure on housing prices.
- throwawaysea 8y ago
  Why is it important to accommodate people who might want to move to an area? Does everyone have the right to live anywhere they want to live without having to pay the necessary price to be there? For example, does everyone have a right to expect a residence on a Hawaii beachfront? And if not, why is it reasonable to portray a city as somehow lacking because it serves existing constituents above new ones?
  - rcpt 8y ago
    > Why is it important to accommodate people who might want to move to an area? Because walling off cities has awful consequences for national GDP https://www.nytimes.com/2017/09/06/opinion/housing-regulations-us-economy.html https://www.nytimes.com/2017/09/06/opinion/housing-regulatio...
  - ModernMech 8y ago
    Maybe not, but would you agree it's important to keep families together? If my children turn 18 and want to move out of the house but stay in the region to be close to family, they might not have many options when rent is $3000 per month and minimum wage is $7.
  - Solvitieg 8y ago
    It's not just people moving to the area. Also consider existing renters who need to move, or people who become renting-age. I will need to move out of the city if I lose my place. I'm paying $1000 below market value.
    - throwawaysea 8y ago
      [Apologies - copying a comment I made elsewhere, but it is relevant to the point you made] Here's a better alternative to rent control. Instead of rent control on a per-unit basis, cities could provide subsidies to long-term low-income residents that reduce their personal expenditure on rent. The subsidies would be paid for through taxes, thus amortizing the subsidy across the local tax base instead of impacting an individual landlord or unit. But let me note that this must be done only for long-term residents (that is, those who have been there for years). For example, if someone moved to SF within the last 5 years, they should have known what the price of living there is. This is one of the most desirable cities, and it makes sense that it would be expensive and that not everyone would get to live there. Those moving there in recent years therefore, simply made an irresponsible personal choice and must yield to the consequences, rather than being subsidized at others' expense.
- landryraccoon 8y ago
  It's also bad for the people in those apartments, because it traps them there. Life circumstances change and people get different jobs. Maybe you live in Palo Alto and get a job in San Francisco or visa versa. Before you'd swap apartments with someone moving closer to where you are now, with rent control nobody can move.
  - pmoriarty 8y ago
    If you can't afford to live in a non-rent controlled apartment in a given area, that's not going to change if your own apartment becomes non-rent controlled. You'll just be forced to move out of the area to somewhere more affordable. I really don't see how making more apartments expensive to live in helps anyone but landlords.
    - Tyrek 8y ago
      The argument is that rent control is a poor bandaid over the long-term problem of housing supply, because it reduces political pressure to build more houses. It's not the same longterm fix that changing zoning laws would be, for example.
    - deleted 8y ago
      [deleted]
    - JamesBarney 8y ago
      It makes it more expensive via three avenues. 1. It incentivizes owners to convert rental stock to housing stock. 2. It disincentivizes developers from building new rental stock. 3. It concentrates demand and removes supply driving up the price of non-rent controlled apartments.* * Every rent controlled place that is lived in my a person who can't afford market rent displaces an individual who can afford market rent who then competes for the remaining rental stock driving up the prices of the non-rent controlled apartments.
      - asdff 8y ago
        Where does the displaced person who can't afford market rate go? They could afford it at one point, just their wage increases were dwarfed by housing price increases. All it asks is that landlords have a %cap on how much they can increase their rents each year. It's just not sustainable to displace all your tenants every pop of the housing market. It's not like the landlords property tax gets affected when market value goes up, landlords are encouraged to hold and not build on their properties right now because property tax burden is assessed when you sell or build, doesn't matter what realtors can get for your property or how much you ask from your tenants every month.
- abalone 8y ago
  > [Rent control policy] will tend throw currently homeless people under the bus. Precisely the opposite is true. Uncontroversially the immediate effect of abolishing rent control will be to create more homeless. Rent control does not apply to new construction in many cities such as SF, so it does not affect the incentive to build. The mechanism by which abolishing rent control might lower prices somewhat for wealthier people moving into the city is by clearing out the less fortunate who have built lives here, adding their units to the market. Those that have nowhere else to go will become homeless.
- pmoriarty 8y ago
  If there's enough demand in the market, either the person already living in the apartment or someone else is going to live there. With rent control, whoever lives there pays lower rent. Without rent control, whoever lives there pays higher rent. There is no net change in the number of people living there either way. So why (other to benefit landlords) would we want whoever lives in a given apartment to pay higher rent? "it will tend to weaken coalitions in favor of reducing housing prices for new home buyers/renters and will tend throw currently homeless people under the bus" Landlords are not going to voluntarily lower rent prices if they can get away with charging more (else rent control would not even be necessary), and homeless people are not going to be able to afford the higher prices that non-rent controlled apartments cost.
- nwah1 8y ago
  Henry George thought that land was our common inheritance, but was in favor of free markets. He did not support rent control. He thought of rent as a fact owing to the value of the location, and the question is not how to make the rent lower. The question is who gets to profit off the fruits of nature. Rent control, in effect, converts tenants into pseudo-landowners with less fungible rights. If locations are valuable, and by extension the rents, that is good. But to whom does the rent belong? If rents are unaffordable, it is because wages are too low and the rent is not shared... which comes back to bargaining power and the overall health of the economy. Taxing production, for instance, harms economic health. But allowing speculators to hold the land for ransom creates stagnation, sprawl, and harms the bargaining power of labor... by worsening everyone's best available options for living and working.
  - geezerjay 8y ago
    > But allowing speculators to hold the land for ransom Property owners paid all the development costs, directly and indirectly,as well as all the maintenance and bureaucratic work. If you rent an appartment, you're not paying for a percentage of the lot. You're paying for the fraction of a whole system (structural, electrical, sanitary, etc) which exists only because those who invested their hard-earned cash puting everything together. More importantly, that little lot is only worth something because other investors spent their hard-earned cash investing in that area, either in urban development projects or in commercial and/or industrial activities. So quite obviously that sort of exploitation angle makes no sense as it is based on a very weak strawman (i.e., there is only value in occupying a specific region in space) that had no bearing in reality. Let's put it this way: what would happen to San Francisco's housing costs if magically the entire tech industry raised their figuratice anchor and moved elsewhere?
    - nwah1 8y ago
      The idea of Land Value Taxation, which was George's proposal, is that improvements are to be exempted from taxation, and the effort of property management is to be considered as authentic labor. Only land is to be taxed. Not capital. Not labor.
Blackstone4 8y ago
Rent control can also distort markets and change the way people live. So say you have rent controlled apartment close to work but later lose your job. In that case people are heavily incentived to stay put so less likely to move and more likely to commute longer distances for work.
- captainbland 8y ago
  Often around these kinds of high-density cities, many (most?) people are living some sizeable distance from work anyway so I'm not that rent controls would be massively influential there either way. I agree with the principle that we should attempt to reduce commutes but I think there are other issues at play which are more relevant to commutes specifically such as agglomeration which generates areas which are dense in work and relatively sparse in housing and vice versa. So there are other dynamics at play, some cultural like being expected to be physically present when your work could be done either at home or from a local desk-space or something to that effect. I'm sure there are other possible answers to this, but quite a straightforward one to me seems that paying your employees for their commuting time would probably be right in terms of incentivising employers to allow more remote work or even set up satellite locations (possibly as a part of a desk sharing arrangement) in areas typically considered commuter belts.
  - rohansingh 8y ago
    One other thing I've seen in NYC is that rent control results in increasingly divergent incentives for the landlord and the tenant over time, assuming that the value of the property is increasing. It gets to the point where some landlords do truly despicable things to drive out tenants who they cannot otherwise legally ask to leave. It also leads to things like tenants refusing necessary repairs because they fear the landlord will use that as a pretense to raise the rent or evict. Basically, trust just breaks down on both sides.
  - lmm 8y ago
    > Often around these kinds of high-density cities, many (most?) people are living some sizeable distance from work anyway so I'm not that rent controls would be massively influential there either way. Plenty of people commute from an inner suburb on one side of the city to a job on the far side of the center. If they could move to the corresponding inner suburb on the other side, and pay the same rent, that would be a substantial saving for them, at no cost to anyone else. > I'm sure there are other possible answers to this, but quite a straightforward one to me seems that paying your employees for their commuting time would probably be right in terms of incentivising employers to allow more remote work or even set up satellite locations (possibly as a part of a desk sharing arrangement) in areas typically considered commuter belts. That's not workable; employees can just pick a long commute and pocket the money. And what about those who aren't traditionally employed, or the small companies who'd be bankrupted by this? Employers don't put their offices in the center of the city out of malice. They do it because it's better for productivity, and/or a better work environment that lets them attract more talented employees. That's real value that you destroy when you make it expensive for two people to swap houses and live nearer where they work; even if you force the bill onto the employer it's still a loss to society.
kalefranz 8y ago
Thanks for calling attention to the land value tax concept. Was worth the 20 minute dive on wikipedia [1] and references for me. [1] https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
- rcpt 8y ago
  If you live in California it's honestly better to just not know about it. Before reading that Wikipedia page I never batted an eye at golf courses in city centers, dilapidated shacks with huge yards bordering Google's HQ, or empty lots worth millions sitting undeveloped in the middle of a housing shortage.
- smallgovt 8y ago
  I don't understand how a land value tax would correct for the issue the original article outlines. That is, landowners will be the primary beneficiary of municipality improvements regardless of whether we have a land value tax or property tax.
b1r6 8y ago
Rent control is bad economics. The simple progression: 1. Local political culture limits natural housing supply growth. 2. Increasing percentages of people can't afford rent due to housing supply not meeting demand. 3. Rent control is enacted for political wins. 4. Property values fall due to decreased utility in ownership. 5. New housing creation falls due to new lack of incentive. 6. End-stage dysfunction; negative feedback loop established. 6A. Lack of inflation-tracking minimum wage exacerbates.
- k__ 8y ago
  What's the alternative?
  - jseliger 8y ago
    https://news.ycombinator.com/item?id=16704501 https://news.ycombinator.com/item?id=16704501
  - b1r6 8y ago
    To aggressively build housing. But this requires local politics to cordially ignore the calls to keep the status-quo. In many places, it isn't possible. :/
    - crdoconnor 8y ago
      Raising LVT proxies (e.g. property tax) would make the NIMBYs quieten. Untaxed land -> higher property values -> NIMBYs start getting agitated about proposed housing developments taking chunks out of their home equity by increasing supply
  - legitster 8y ago
    Zoning enough housing to meet demand.
    - Nasrudith 8y ago
      There is technically a second option - better transit to handle it but it is usually a worse one and like landfills they have to be built somewhere. And of course the most efficient, scaleable, and clean transit benefit from higher density housing. And of course people resist that as well. The problem with rent isn't that we don't have a cure but that people don't want to take their medicine.
gumby 8y ago
I lived in a rent-controlled apartment in the 1980s and it was impossible to get the landlord to fix anything (i.e. invest in anything) regardless of what the laws said (this was Cambridge, MA, and the usual junk grad student apartments next to campus). He wasn't going to get any additional rent for anything put into the building. In fact his best option was to let the block decay and become uninhabitable so he could pull it down, put up something better, and rent out at market rates to new tenants. A few years back I drove down the street and guess what: the buildings on that street had clearly been built since I graduated.
smallgovt 8y ago
Why would a land value tax decrease the benefit landlords accrue from municipal service improvements? We already have a property tax, and the only difference between a land value tax and property tax is that it favors one type of landlord (the ones who develop their land) over another.
- kd0amg 8y ago
  To the extent that municipal service improvements increase the utility provided by housing in the area, landlords are able to collect more rent from tenants (not necessarily from the same tenants -- new tenants with more buying power will be more interested in the area after municipal services improve). Since that increase in utility for tenants is derived from the location of a lot rather than what's built on it, the value of the land itself increases while the building remains unchanged. So taxing improvements can't recapture the utility increase the way that taxing land can.

Symmetry 8y ago

Rent control is good for the people who already have housing who don't see their rents go up, but it's bad for people who might want to move to an area. It's very much a "pull up the ladder behind you" sort of policy and in the case that the article addresses it will tend to weaken coalitions in favor of reducing housing prices for new home buyers/renters and will tend throw currently homeless people under the bus.

crdoconnor 8y ago
It's bad for people who might want to move to an area of you believe that rent control significantly affects the supply of housing. If you believe that then it might be worth pondering why New York's highest rate of homebuilding occurred when it had its strictest rent controls though. In reality all rent control really does is redistribute some the spoils of rising land values from certain owners to certain renters. This makes some property owners extremely angry but as far as renters and potential renters are concerned it's potentially good or potentially neutral. If you really want to incentivize home building you need to disincentivize land hoarding. That means repealing prop 13 or implementing LVT.
- kortilla 8y ago
  Just because there was a boom during the time of ham fisted rent control does not mean it was caused by rent control nor does it imply that rent control was even good for it. Have you ever considered how much more housing might have been built if it weren’t for rent control?
  - crdoconnor 8y ago
    I don't think it necessarily was caused by rent control. It's still an extremely inconvenient fact for anybody advancing the hypothesis that rent control impedes housing development. It might very well be that the effect is real but is so weak that it is completely overwhelmed by other factors. It might also be that bringing down property values (which rent control will do) lowers the bar to housing development, spurring more of it.
- kelnos 8y ago
  > In reality all rent control really does is redistribute some the spoils of rising land values from certain owners to certain renters. No, rent control also redistributes the burden of rising rental costs from people who have rent control to people who don't, and tends to make that burden larger than it would be otherwise. > If you really want to incentivize home building you need to disincentivize land hoarding. That means repealing prop 13 or implementing LVT. On this, we agree. And we can't just simply throw rent control in the trash overnight and expect everything to work out. It needs to happen in concert with other initiatives that increase the housing stock, and be phased out over time, with targeted help to more vulnerable people. But I don't expect any of this to happen, at least not until things get to people-are-rioting-in-the-streets levels.
  - crdoconnor 8y ago
    >No, rent control also redistributes the burden of rising rental costs from people who have rent control to people who don't Supply of apartments and demand for apartments doesn't suddenly change under rent control so no, there's no market pressure making non rent controlled apartments more expensive hence there is no redistribution between renters. Lucky renters get below market rate and unlucky renters get market rate. There is only re-redistribution from rentiers (landlords) back to renters. 1% -> 99%. I don't think rent control is the best solution for the housing crisis (100% LVT ftw) but it's intellectually dishonest to pretend that it hurts renters. It never has and it never will.
    - kelnos 8y ago
      > Supply of apartments and demand for apartments doesn't suddenly change under rent control Yes it absolutely does. Demand doesn't change, but supply is artificially reduced because people with rent control are less likely to want to (or be able to) move out.
      - crdoconnor 8y ago
        People who don't move out aren't increasing supply but they also arent competing with other people seeking new apartments so they aren't increasing demand either. It's net neutral. Unless you're talking about the people forced on to the street or out of the city entirely by rising rents...?
- inetknght 8y ago
  If I am renting somewhere, surely I am putting money into the local economy? If I am doing that, then surely I deserve some of the benefit of an improving economy? As it is, a renter is punished for improving the local economy because it improves the value and the cost of rent goes up. As it is, employers aren't exactly keeping up with inflation. Add in the increasing cost of rent? Time to move. Oh, wait, all the high tech jobs are highly concentrated when they don't need to be.
coldtea 8y ago
>Rent control is good for the people who already have housing who don't see their rents go up, but it's bad for people who might want to move to an area. I don't see the problem. "Wanna move to the area" is a choice. "I am forced out of my house because of higher rent" is not.
- lr4444lr 8y ago
  Try rephrasing the first as "I can't move into the area because I even though I would gladly pay what a landlord would freely charge, his current lessee has a legal claim to renew at a rate below that."
- lmm 8y ago
  Living in a particular place is always a choice. You shouldn't be entitled to get the same house at half the price just because of the accident of where you happened to be born.
  - paddy_m 8y ago
    There is a large section of the SF Bay area that is horrified at the idea of closed borders, yet they are as horrified at the idea of anyone new or poor moving into their neighborhood.
  - coldtea 8y ago
    Why not? If you were born there, you should have claims there. Would you extend this idea to property? After all everything you've inherited is like that too (an accident of birth). How about parents? Perhaps children should be assigned to random families at birth, to keep it fair? How about citizenship? Would you give up your citizenship because you being an X citizen is just an "accident of birth" (and as such not really entitled to it)? People don't have "accidents of birth". People are born in a place because their parents moved there. And the important part comes after the birth: people grew up there, played there as kids, connected with the place, etc. A place is part of a person's life history. It's not just a consumer good up for grabs by the highest bidder.
- kortilla 8y ago
naravara 8y ago
>Rent control is good for the people who already have housing who don't see their rents go up, but it's bad for people who might want to move to an area. It's very much a "pull up the ladder behind you" sort of policy and in the case that the article addresses it will tend to weaken coalitions in favor of reducing housing prices for new home buyers/renters and will tend throw currently homeless people under the bus. You could defray those negative effects by building lots of public housing and/or heavily subsidizing new construction.
- lmm 8y ago
  > You could defray those negative effects by building lots of public housing and/or heavily subsidizing new construction. To the extent that you actually do that, you will naturally lower the market rent to the level that you wanted, making rent control pointless (except that it removes the signal that would warn you when you need to build more housing).
  - naravara 8y ago
    >To the extent that you actually do that, you will naturally lower the market rent to the level that you wanted, making rent control pointless (except that it removes the signal that would warn you when you need to build more housing). You kind of answered your first clause with your second. Demand can rise very rapidly, but supply can only grow slowly. If you want to keep housing prices stabile for people so they're not being thrown out of their homes or displaced, public housing doesn't address that because you don't get the signal that it's a problem until after the displacement has happened.
- kortilla 8y ago
  Or, just let private builders build. Housing is not magically immune to supply and demand. Only advocating for the government to increase supply isn’t a very effective solution.
  - naravara 8y ago
    >Housing is not magically immune to supply and demand. It kind of is because housing isn't the only component of housing value. Access to transit, safety, and public amenities like parks and schools are a huge component of what makes housing valuable. All of those things are public goods built by the government. Expecting private builders to build is just allowing public expenditure to line the pockets of a landowner who did nothing to add value to it.
zjaffee 8y ago
How ownership has a very similar effect as rent control, especially in California where prop 13 exists. Should we abolish home ownership and have everyone buy into a single rental market such that prices wouldn't be distorted beyond what median area incomes are. The issue at hand will always be that there isn't enough housing for newcomers, if we mandated housing construction to grow in a parallel way with office construction and job growth we wouldn't have nearly the sorts of problems we have today.
- harryh 8y ago
  You don't have to mandate construction of housing. You just have to get rid of the INSANE barriers to housing construction that exist today in places like SF and the wider Bay Area.
  - zjaffee 8y ago
    This will sound counterintuitive but you absolutely have to mandate housing. Compare this to parking requirements, if we want an abundant housing supply we need to distort the market price of housing the same way we did for parking. Require that new offices build an equal square footage of housing on top of themselves, and you've immediately build enough housing for at least the initial stage of population growth that comes with that new office.
    - C4stor 8y ago
      I think you should hope to live in more than the handful of square meters than a classic tech worker occupies in an office. Housing people on the same ground area than the offices would probably prove to be a huge technical challenge since it would effectively need probably 8 to 10 times the square footage, not to mention I'm not quite sure people really all want to have their colleagues as neighbours.
      - zjaffee 8y ago
        I'm not saying that the housing would need to go to those who work in the office, if anything it should be a part of the broader open market. I'm also not saying that the office needs to match the housing supply of it's office workers in full, as a lot of new office development is hiring from people locally as well. But say, if you looked at the Seattle area, where Microsoft and Amazon have built over 10 million square feet of office space in recent years, an extra 10,000 apartments would go a long way in relieving the pressure on housing prices.
throwawaysea 8y ago
Why is it important to accommodate people who might want to move to an area? Does everyone have the right to live anywhere they want to live without having to pay the necessary price to be there? For example, does everyone have a right to expect a residence on a Hawaii beachfront? And if not, why is it reasonable to portray a city as somehow lacking because it serves existing constituents above new ones?
- rcpt 8y ago
  > Why is it important to accommodate people who might want to move to an area? Because walling off cities has awful consequences for national GDP https://www.nytimes.com/2017/09/06/opinion/housing-regulations-us-economy.html https://www.nytimes.com/2017/09/06/opinion/housing-regulatio...
- ModernMech 8y ago
  Maybe not, but would you agree it's important to keep families together? If my children turn 18 and want to move out of the house but stay in the region to be close to family, they might not have many options when rent is $3000 per month and minimum wage is $7.
- Solvitieg 8y ago
  It's not just people moving to the area. Also consider existing renters who need to move, or people who become renting-age. I will need to move out of the city if I lose my place. I'm paying $1000 below market value.
  - throwawaysea 8y ago
    [Apologies - copying a comment I made elsewhere, but it is relevant to the point you made] Here's a better alternative to rent control. Instead of rent control on a per-unit basis, cities could provide subsidies to long-term low-income residents that reduce their personal expenditure on rent. The subsidies would be paid for through taxes, thus amortizing the subsidy across the local tax base instead of impacting an individual landlord or unit. But let me note that this must be done only for long-term residents (that is, those who have been there for years). For example, if someone moved to SF within the last 5 years, they should have known what the price of living there is. This is one of the most desirable cities, and it makes sense that it would be expensive and that not everyone would get to live there. Those moving there in recent years therefore, simply made an irresponsible personal choice and must yield to the consequences, rather than being subsidized at others' expense.
landryraccoon 8y ago
It's also bad for the people in those apartments, because it traps them there. Life circumstances change and people get different jobs. Maybe you live in Palo Alto and get a job in San Francisco or visa versa. Before you'd swap apartments with someone moving closer to where you are now, with rent control nobody can move.
- pmoriarty 8y ago
  If you can't afford to live in a non-rent controlled apartment in a given area, that's not going to change if your own apartment becomes non-rent controlled. You'll just be forced to move out of the area to somewhere more affordable. I really don't see how making more apartments expensive to live in helps anyone but landlords.
  - Tyrek 8y ago
    The argument is that rent control is a poor bandaid over the long-term problem of housing supply, because it reduces political pressure to build more houses. It's not the same longterm fix that changing zoning laws would be, for example.
  - deleted 8y ago
    [deleted]
  - JamesBarney 8y ago
    It makes it more expensive via three avenues. 1. It incentivizes owners to convert rental stock to housing stock. 2. It disincentivizes developers from building new rental stock. 3. It concentrates demand and removes supply driving up the price of non-rent controlled apartments.* * Every rent controlled place that is lived in my a person who can't afford market rent displaces an individual who can afford market rent who then competes for the remaining rental stock driving up the prices of the non-rent controlled apartments.
    - asdff 8y ago
      Where does the displaced person who can't afford market rate go? They could afford it at one point, just their wage increases were dwarfed by housing price increases. All it asks is that landlords have a %cap on how much they can increase their rents each year. It's just not sustainable to displace all your tenants every pop of the housing market. It's not like the landlords property tax gets affected when market value goes up, landlords are encouraged to hold and not build on their properties right now because property tax burden is assessed when you sell or build, doesn't matter what realtors can get for your property or how much you ask from your tenants every month.
abalone 8y ago
> [Rent control policy] will tend throw currently homeless people under the bus. Precisely the opposite is true. Uncontroversially the immediate effect of abolishing rent control will be to create more homeless. Rent control does not apply to new construction in many cities such as SF, so it does not affect the incentive to build. The mechanism by which abolishing rent control might lower prices somewhat for wealthier people moving into the city is by clearing out the less fortunate who have built lives here, adding their units to the market. Those that have nowhere else to go will become homeless.
pmoriarty 8y ago
If there's enough demand in the market, either the person already living in the apartment or someone else is going to live there. With rent control, whoever lives there pays lower rent. Without rent control, whoever lives there pays higher rent. There is no net change in the number of people living there either way. So why (other to benefit landlords) would we want whoever lives in a given apartment to pay higher rent? "it will tend to weaken coalitions in favor of reducing housing prices for new home buyers/renters and will tend throw currently homeless people under the bus" Landlords are not going to voluntarily lower rent prices if they can get away with charging more (else rent control would not even be necessary), and homeless people are not going to be able to afford the higher prices that non-rent controlled apartments cost.
nwah1 8y ago
Henry George thought that land was our common inheritance, but was in favor of free markets. He did not support rent control. He thought of rent as a fact owing to the value of the location, and the question is not how to make the rent lower. The question is who gets to profit off the fruits of nature. Rent control, in effect, converts tenants into pseudo-landowners with less fungible rights. If locations are valuable, and by extension the rents, that is good. But to whom does the rent belong? If rents are unaffordable, it is because wages are too low and the rent is not shared... which comes back to bargaining power and the overall health of the economy. Taxing production, for instance, harms economic health. But allowing speculators to hold the land for ransom creates stagnation, sprawl, and harms the bargaining power of labor... by worsening everyone's best available options for living and working.
- geezerjay 8y ago
  > But allowing speculators to hold the land for ransom Property owners paid all the development costs, directly and indirectly,as well as all the maintenance and bureaucratic work. If you rent an appartment, you're not paying for a percentage of the lot. You're paying for the fraction of a whole system (structural, electrical, sanitary, etc) which exists only because those who invested their hard-earned cash puting everything together. More importantly, that little lot is only worth something because other investors spent their hard-earned cash investing in that area, either in urban development projects or in commercial and/or industrial activities. So quite obviously that sort of exploitation angle makes no sense as it is based on a very weak strawman (i.e., there is only value in occupying a specific region in space) that had no bearing in reality. Let's put it this way: what would happen to San Francisco's housing costs if magically the entire tech industry raised their figuratice anchor and moved elsewhere?
  - nwah1 8y ago
    The idea of Land Value Taxation, which was George's proposal, is that improvements are to be exempted from taxation, and the effort of property management is to be considered as authentic labor. Only land is to be taxed. Not capital. Not labor.

Blackstone4 8y ago

Rent control can also distort markets and change the way people live. So say you have rent controlled apartment close to work but later lose your job. In that case people are heavily incentived to stay put so less likely to move and more likely to commute longer distances for work.

captainbland 8y ago
Often around these kinds of high-density cities, many (most?) people are living some sizeable distance from work anyway so I'm not that rent controls would be massively influential there either way. I agree with the principle that we should attempt to reduce commutes but I think there are other issues at play which are more relevant to commutes specifically such as agglomeration which generates areas which are dense in work and relatively sparse in housing and vice versa. So there are other dynamics at play, some cultural like being expected to be physically present when your work could be done either at home or from a local desk-space or something to that effect. I'm sure there are other possible answers to this, but quite a straightforward one to me seems that paying your employees for their commuting time would probably be right in terms of incentivising employers to allow more remote work or even set up satellite locations (possibly as a part of a desk sharing arrangement) in areas typically considered commuter belts.
- rohansingh 8y ago
  One other thing I've seen in NYC is that rent control results in increasingly divergent incentives for the landlord and the tenant over time, assuming that the value of the property is increasing. It gets to the point where some landlords do truly despicable things to drive out tenants who they cannot otherwise legally ask to leave. It also leads to things like tenants refusing necessary repairs because they fear the landlord will use that as a pretense to raise the rent or evict. Basically, trust just breaks down on both sides.
- lmm 8y ago
  > Often around these kinds of high-density cities, many (most?) people are living some sizeable distance from work anyway so I'm not that rent controls would be massively influential there either way. Plenty of people commute from an inner suburb on one side of the city to a job on the far side of the center. If they could move to the corresponding inner suburb on the other side, and pay the same rent, that would be a substantial saving for them, at no cost to anyone else. > I'm sure there are other possible answers to this, but quite a straightforward one to me seems that paying your employees for their commuting time would probably be right in terms of incentivising employers to allow more remote work or even set up satellite locations (possibly as a part of a desk sharing arrangement) in areas typically considered commuter belts. That's not workable; employees can just pick a long commute and pocket the money. And what about those who aren't traditionally employed, or the small companies who'd be bankrupted by this? Employers don't put their offices in the center of the city out of malice. They do it because it's better for productivity, and/or a better work environment that lets them attract more talented employees. That's real value that you destroy when you make it expensive for two people to swap houses and live nearer where they work; even if you force the bill onto the employer it's still a loss to society.

kalefranz 8y ago

Thanks for calling attention to the land value tax concept. Was worth the 20 minute dive on wikipedia [1] and references for me. [1] https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax

rcpt 8y ago
If you live in California it's honestly better to just not know about it. Before reading that Wikipedia page I never batted an eye at golf courses in city centers, dilapidated shacks with huge yards bordering Google's HQ, or empty lots worth millions sitting undeveloped in the middle of a housing shortage.
smallgovt 8y ago
I don't understand how a land value tax would correct for the issue the original article outlines. That is, landowners will be the primary beneficiary of municipality improvements regardless of whether we have a land value tax or property tax.

b1r6 8y ago

Rent control is bad economics. The simple progression: 1. Local political culture limits natural housing supply growth. 2. Increasing percentages of people can't afford rent due to housing supply not meeting demand. 3. Rent control is enacted for political wins. 4. Property values fall due to decreased utility in ownership. 5. New housing creation falls due to new lack of incentive. 6. End-stage dysfunction; negative feedback loop established. 6A. Lack of inflation-tracking minimum wage exacerbates.

k__ 8y ago
What's the alternative?
- jseliger 8y ago
  https://news.ycombinator.com/item?id=16704501 https://news.ycombinator.com/item?id=16704501
- b1r6 8y ago
  To aggressively build housing. But this requires local politics to cordially ignore the calls to keep the status-quo. In many places, it isn't possible. :/
  - crdoconnor 8y ago
    Raising LVT proxies (e.g. property tax) would make the NIMBYs quieten. Untaxed land -> higher property values -> NIMBYs start getting agitated about proposed housing developments taking chunks out of their home equity by increasing supply
- legitster 8y ago
  Zoning enough housing to meet demand.
  - Nasrudith 8y ago
    There is technically a second option - better transit to handle it but it is usually a worse one and like landfills they have to be built somewhere. And of course the most efficient, scaleable, and clean transit benefit from higher density housing. And of course people resist that as well. The problem with rent isn't that we don't have a cure but that people don't want to take their medicine.

gumby 8y ago

I lived in a rent-controlled apartment in the 1980s and it was impossible to get the landlord to fix anything (i.e. invest in anything) regardless of what the laws said (this was Cambridge, MA, and the usual junk grad student apartments next to campus). He wasn't going to get any additional rent for anything put into the building. In fact his best option was to let the block decay and become uninhabitable so he could pull it down, put up something better, and rent out at market rates to new tenants. A few years back I drove down the street and guess what: the buildings on that street had clearly been built since I graduated.

smallgovt 8y ago

Why would a land value tax decrease the benefit landlords accrue from municipal service improvements? We already have a property tax, and the only difference between a land value tax and property tax is that it favors one type of landlord (the ones who develop their land) over another.

kd0amg 8y ago
To the extent that municipal service improvements increase the utility provided by housing in the area, landlords are able to collect more rent from tenants (not necessarily from the same tenants -- new tenants with more buying power will be more interested in the area after municipal services improve). Since that increase in utility for tenants is derived from the location of a lot rather than what's built on it, the value of the land itself increases while the building remains unchanged. So taxing improvements can't recapture the utility increase the way that taxing land can.