3 ms·

My interpretation of the evidence leads to the opposite conclusion. Here's a good summary: https://www.slowboring.com/p/induced-demand https://www.slowboring.

• sudosysgen 6y ago
  This article is completely orthogonal. Yes, building more pushes price down. Eventually though, you stop being able to increase density economically, and at that point the only way to prevent housing prices from increasing is rent restrictions. It's important to note that even according to your article, you need to drastically increase supply even for a modest decrease in rent. No one here is against increasing density. It is however insane to believe that increasing density is enough to fix the problem. Cities at the edge of density still have affordability issues, whereas much less dense cities with appropriate rent restrictions don't. There is not a single reference to induced demand here. As long as housing stays a profitable investment, and as long as density cannot be increased infinitely without increasing marginal costs, then rent will rise. The only long term solution is to reduce the profitability of speculation on land prices, so that only productive activities, such as building, are profitable. Rent restrictions are part of this, as rent is a large part of the profitability of land. And rent restrictions can work. There are many cases where they have been implemented without a significantly negative impact to mobility. So why oppose them?
  • xapata 6y ago
    Not completely orthogonal. Perhaps they should be, but the intersection of the two sets (advocates for rent restrictions and advocates of zoning restrictions) appears to be a large portion of the total, as far as I can tell. > enough to fix the problem I think we need to define the problem before we start arguing solutions. In my view "can't afford the rent" is a poverty problem, not a rent prices problem. So, I want anti-poverty solutions, not rent price adjustment solutions. I view "the rent is too high" as a distinct problem from "can't afford the rent." So in my mind, rent price adjustments via price regulation are inappropriate for both problems. > so that only productive activities ... are profitable I understand taxing negative externalities, but this sounds anti-democratic. Who decides what's productive? Let's put an appropriate tax on pollution (broadly defined) and let the market figure out what's most productive. That's what it's good at. > why oppose them? I don't know of any instances where rent control didn't affect mobility. Are you considering the effect on immigration and wages in other cities? If they didn't affect mobility, then almost by definition they had no effect whatsoever. They'd have to be covering such a tiny portion of the market that they can essentially be ignored, both cost and benefit. Which makes them a waste of bureaucracy.
    • sudosysgen 6y ago
      There is a very simple definition for things that absolutely aren't productive. Things that produce nothing are not productive. Owning land is not productive, and should not be profitable at all. It is settled economics that the profitability of non-productive actions (often called rent-seeking) is bad. It doesn't matter what your threshold for affordability is. Rent is increasing faster than economic growth, on average. It will continue increasing at this rate until a large part of the population literally cannot afford housing. You're never going to be able to solve the issue of people not being able to afford rent once it stops being economical to increase density, because there will be no incentive for landlords not to push up rent until people can't afford it anymore and start to move out (which is what we don't want to happen). There are no cases where rent control literally did not affect mobility. There are many cases where there is rent control, and high mobility. The city in which I live has around 40% of renters move each year, which is more than enough mobility, and rent control. You do this by using the additional regulatory framework to make it easier for people to move. Your first paragraph is literally meaningless. No one here said anything about zoning except you. If you want argue against someone else, then argue against someone else. The arguments I put forth and your response were completely orthogonal. The rest is simply pure ideology. If you want to convince people or build a coalition with people that disagree with you, put your free-market absolutism aside and focus on solutions and problems.
      • xapata 6y ago
        > owning land is not productive On the contrary, it's providing the valuable service of holding property that I don't want to hold. I'd rather put my capital to some other use. You seem to dislike arguments of "pure ideology" but the assertion that real estate ownership doesn't deserve return on capital seems like it's singling out just one form of capital. Or do you dislike profits drawn from other kinds of property as well? You say it's settled economics, but you've misstated. Monopolistic excess returns are "rents." Competitive market returns are to be encouraged. > until people move out That's actually exactly what I want to happen. 100% occupancy rate is a signal that something is wrong with the market, just as 100% employment would be.