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The market is how we find a compromise between tenants' desire for low rents and landlords' desire for high rents. I don't think you can say it optimizes for la

The market is how we find a compromise between tenants' desire for low rents and landlords' desire for high rents. I don't think you can say it optimizes for landlord profitability but it obviously also doesn't optimize for savings of renters. I agree that this is not perfect, but I think it's the fairest proxy we got. Attempts at regulating rents directly usually end up causing all sorts of unwanted side effects and make things worse for both tenants and landlords. That said, I'm not opposed to the government building cheap housing. I think that's actually the best solution to an undersupply of housing.

goodpoint 5y ago
> I think it's the fairest proxy we got You are simply rehashing the idea that free market is holy and magic. Instead, housing is inelastic. Also, apartments are non-fungible goods. Furthermore, they have a ton of externalities. (e.g. access to transportation, shops, workplaces, schools) All of this breaks every assumption around free market theory. Unsurprisingly, governments intervene heavily in the housing market almost in every developed country. The only exceptions lead to a combination of slumslords exploiting the poorest people and gated communities for the wealthy.
- CryptoPunk 5y ago
  >>You are simply rehashing the idea that free market is holy and magic. Instead, housing is inelastic. Housing is not inelastic at all. Economists have studied the effects of laws reducing land-use rights, and have found they impose massive social costs, in the form of less housing construction, that leads to less affordable housing. https://www.aeaweb.org/articles?id=10.1257/mac.20170388 https://www.aeaweb.org/articles?id=10.1257/mac.20170388
  - goodpoint 5y ago
    > less housing construction, that leads to less affordable housing You mean that decreasing housing supply correlates with increasing price? Because that's exactly what inelastic demand is: https://www.investopedia.com/terms/e/inelastic.asp https://www.investopedia.com/terms/e/inelastic.asp
    - CryptoPunk 5y ago
      Demand might be inelastic, but supply and price are not.

goodpoint 5y ago

> I think it's the fairest proxy we got You are simply rehashing the idea that free market is holy and magic. Instead, housing is inelastic. Also, apartments are non-fungible goods. Furthermore, they have a ton of externalities. (e.g. access to transportation, shops, workplaces, schools) All of this breaks every assumption around free market theory. Unsurprisingly, governments intervene heavily in the housing market almost in every developed country. The only exceptions lead to a combination of slumslords exploiting the poorest people and gated communities for the wealthy.

CryptoPunk 5y ago
>>You are simply rehashing the idea that free market is holy and magic. Instead, housing is inelastic. Housing is not inelastic at all. Economists have studied the effects of laws reducing land-use rights, and have found they impose massive social costs, in the form of less housing construction, that leads to less affordable housing. https://www.aeaweb.org/articles?id=10.1257/mac.20170388 https://www.aeaweb.org/articles?id=10.1257/mac.20170388
- goodpoint 5y ago
  > less housing construction, that leads to less affordable housing You mean that decreasing housing supply correlates with increasing price? Because that's exactly what inelastic demand is: https://www.investopedia.com/terms/e/inelastic.asp https://www.investopedia.com/terms/e/inelastic.asp
  - CryptoPunk 5y ago
    Demand might be inelastic, but supply and price are not.