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> yet supply is not rising to meet demand, largely because existing owners oppose new construction. So when over-regulation drives up prices, the appropriate r

> yet supply is not rising to meet demand, largely because existing owners oppose new construction. So when over-regulation drives up prices, the appropriate response is to introduce new regulations to fight the other regulations? Because that’s exactly what this is. It won’t even improve the problem. The problem is that there are more people who want to live in California than there is housing. The reason for that is because regulations prohibit the market from increasing supply at a rate that comes anywhere near keeping up with demand.

human20190310 7y ago
> So when over-regulation drives up the costs, the appropriate response is to introduce new regulations to fight the other regulations? Yes. The effort to reduce regulations on construction has failed. As such, retaliating against the beneficiaries of those regulations with counter-regulations is appropriate. It's not pretty or efficient, this is a fight between different interests, not a group problem-solving effort.
- AmericanChopper 7y ago
  If over regulation drove up prices, what exactly do you expect from more regulation?
  - human20190310 7y ago
    To expand the set of people suffering to include landlords and owners, instead of having own group of people benefiting from regulation (in the form of restricted supply) and another not. EDIT: to be clear, not suffering for its own sake, but to pressure owners to stop supporting the current regulations.
    - AmericanChopper 7y ago
      As long as demand for housing continues to outstrip supply, especially if demand continues to grow at a rate exceeding the growth in supply, then there will always be money to be made in housing. This law in California allows for 5% annual increases after inflation. It’s hard to see how this will even hurt landlords. Creating a pretty clear incentive to perform a maximum increase ever year doesn’t seem great for renters though.
  - clucas 7y ago
    It is possible for regulation to lower the cost of some things. For example, currently the regulatory environment in many California real estate market lowers the cost of holding rental property. In a more competitive, less regulated market, the opportunity cost of buildin developing now housing would be lower, so landlords would have more cost (indirectly through decreased rent or directly through more frequent renovations). Hopefully this move leads relaxed zoning laws and regulations, allowing new development... People who want such things will gain political clout because capital will want return on investment, and rent control shifts the calculus for good ROI in the real estate market toward new development (marginally). I'm sure hundreds of economists have written thousands of papers about this subject, each going its own idiosyncratic way, so maybe I've actually been proven wrong in this particular case, I don't know, but I have to say that the idea that regulation only ever increases costs is silly.
    - AnthonyMouse 7y ago
      > rent control shifts the calculus for good ROI in the real estate market toward new development (marginally). It does precisely the opposite. It reduces the value of rental properties, which makes investing in constructing them less competitive against investment in constructing new housing in some other state or country, or constructing commercial properties rather than residential ones, or any other competing investment securities.
coliveira 7y ago
Talking about "regulation" doesn't really say anything. All laws, good and bad are regulation. There is regulation passed by businesses, and very few passed by citizens. When you cry about regulation, it is similar to crying about the water being wet or over having to breath. In modern society, very few things are done without regulation. Even basic rights that we take for granted, such as freedom of speech, are guaranteed in the US because there is a piece of regulation, passed more than two centuries ago, called "constitution".
- AmericanChopper 7y ago
  I’m not sure what this is supposed to contribute to the conversation. Regulations make it simply impossible for housing supply to keep up with demand in California (and lots of other places too). This point in particular is not even contentious as far as I can tell. If you want to fix the problem, the only way to do it is to relax zoning and permit regulations. Trying to fix over-regulation with more regulation will only ever make things less efficient, requiring even more regulations, ad infinitum. This has been California’s long standing policy, and not only has this never solved the problem, it’s never even been able to stop it from endlessly getting worse.
  - sgc 7y ago
    As I said above, they don't even need to ease the regulations, just work faster for permit approval and charge less for them, and the problem could largely sort itself out.
    - AmericanChopper 7y ago
      The cost of compliance is really a minor factor here. The problem is that zoning laws simply prohibit building enough hosing to meet demand. The zoning laws in LA, the Bay Area and elsewhere will ensure an ever-worsening and never ending housing shortage for as long as they exist in their current state.
      - sgc 7y ago

human20190310 7y ago

> So when over-regulation drives up the costs, the appropriate response is to introduce new regulations to fight the other regulations? Yes. The effort to reduce regulations on construction has failed. As such, retaliating against the beneficiaries of those regulations with counter-regulations is appropriate. It's not pretty or efficient, this is a fight between different interests, not a group problem-solving effort.

AmericanChopper 7y ago
If over regulation drove up prices, what exactly do you expect from more regulation?
- human20190310 7y ago
  To expand the set of people suffering to include landlords and owners, instead of having own group of people benefiting from regulation (in the form of restricted supply) and another not. EDIT: to be clear, not suffering for its own sake, but to pressure owners to stop supporting the current regulations.
  - AmericanChopper 7y ago
    As long as demand for housing continues to outstrip supply, especially if demand continues to grow at a rate exceeding the growth in supply, then there will always be money to be made in housing. This law in California allows for 5% annual increases after inflation. It’s hard to see how this will even hurt landlords. Creating a pretty clear incentive to perform a maximum increase ever year doesn’t seem great for renters though.
- clucas 7y ago
  It is possible for regulation to lower the cost of some things. For example, currently the regulatory environment in many California real estate market lowers the cost of holding rental property. In a more competitive, less regulated market, the opportunity cost of buildin developing now housing would be lower, so landlords would have more cost (indirectly through decreased rent or directly through more frequent renovations). Hopefully this move leads relaxed zoning laws and regulations, allowing new development... People who want such things will gain political clout because capital will want return on investment, and rent control shifts the calculus for good ROI in the real estate market toward new development (marginally). I'm sure hundreds of economists have written thousands of papers about this subject, each going its own idiosyncratic way, so maybe I've actually been proven wrong in this particular case, I don't know, but I have to say that the idea that regulation only ever increases costs is silly.
  - AnthonyMouse 7y ago
    > rent control shifts the calculus for good ROI in the real estate market toward new development (marginally). It does precisely the opposite. It reduces the value of rental properties, which makes investing in constructing them less competitive against investment in constructing new housing in some other state or country, or constructing commercial properties rather than residential ones, or any other competing investment securities.

coliveira 7y ago

Talking about "regulation" doesn't really say anything. All laws, good and bad are regulation. There is regulation passed by businesses, and very few passed by citizens. When you cry about regulation, it is similar to crying about the water being wet or over having to breath. In modern society, very few things are done without regulation. Even basic rights that we take for granted, such as freedom of speech, are guaranteed in the US because there is a piece of regulation, passed more than two centuries ago, called "constitution".

AmericanChopper 7y ago
I’m not sure what this is supposed to contribute to the conversation. Regulations make it simply impossible for housing supply to keep up with demand in California (and lots of other places too). This point in particular is not even contentious as far as I can tell. If you want to fix the problem, the only way to do it is to relax zoning and permit regulations. Trying to fix over-regulation with more regulation will only ever make things less efficient, requiring even more regulations, ad infinitum. This has been California’s long standing policy, and not only has this never solved the problem, it’s never even been able to stop it from endlessly getting worse.
- sgc 7y ago
  As I said above, they don't even need to ease the regulations, just work faster for permit approval and charge less for them, and the problem could largely sort itself out.
  - AmericanChopper 7y ago
    The cost of compliance is really a minor factor here. The problem is that zoning laws simply prohibit building enough hosing to meet demand. The zoning laws in LA, the Bay Area and elsewhere will ensure an ever-worsening and never ending housing shortage for as long as they exist in their current state.
    - sgc 7y ago