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There are actual economists who think rent control doesn't hurt supply. And there are actual economists who think the opposite. Given that, saying "we now know

by slibhb 5y ago

There are actual economists who think rent control doesn't hurt supply. And there are actual economists who think the opposite. Given that, saying "we now know rent control isn't bad" is quite a stretch. Personally, I don't understand how rent couldn't hurt housing supply. I do understand that there is empirical evidence suggesting it doesn't but I'll remain skeptical until there's some theory explaining how that could be that I can understand.

sudosysgen 5y ago
We know, empirically, that rent control, when it satisfies some key constraints, is effective. Unless you are one of those that thinks that economics isn't subject to the scientific method, reality trumps theory. And it's false that we have no theory of why rent control is effective, we absolutely do.
- slibhb 5y ago
  You and the above poster are overstating your case. Your post boils down to "don't u believe in science lol?" I agree with this comment: https://jwmason.org/slackwire/considerations-on-rent-control/#comment-1330 https://jwmason.org/slackwire/considerations-on-rent-control... I think that if rent control doesn't hurt housing supply, it's because of various regulations that are distorting the market. Enacting rent control instead of reforming those regulations seems silly to me.
  - sudosysgen 5y ago
    It's on you to show an example of a city where these various regulations are absent and where rent control hurt housing supply. Good luck. I'm being serious here, if you think that a vague, purely theoretical argument, from theories that we already know are very far from complete, is a match for empirical evidence, then you are not treating economics as a science.
    - slibhb 5y ago
      There's nothing vague about the argument against rent control. Further, I don't agree with your view of science. Empirical evidence matters but the pure empiricism that you're advocating is not convincing to me. I think we would be better off reforming regulations that are preventing people from building than enacting rent control. That seems like a very reasonable opinion with plenty of support from economists. I find your posts in this thread overly dismissive and aggressive.
      - sudosysgen 5y ago
        No, the argument is indeed vague. There are plenty of situations where intervening in the market actually increases efficiency - for example, patents, state monopolies on utilities, minimum wages, etc... Simply pointing to "supply and demand" and operating by maximalist principle is a vague argument. You have to actually engage with the fact that housing can never be an ideal markets and that inelasticities are indeed great. Again, if you think that these regulations are both more effective and exclusive to rent control, you can find empirical evidence. I'm not being a pure empiricist. A basic theory made an empirical prediction - that rent control would decrease supply - and the theory is wrong. You can't then use the same theory that made an already incorrect prediction to make a second prediction that is this time almost impossible to evaluate empirically. Find another theory and make an original prediction, without ex-post-facto retconning, and we can judge that theory on the merits. As it is, we already know that simple neoclassical market theory does not apply to markets with significant price in-elasticity and friction, and the housing market is and will always be like that. It's theory that is often wrong, that is wrong here again, you can't rely on it over the empirical evidence by retconning your predictions after the fact. That's just bad science. In another field that would get you laughed out of the room.
        slibhb 5y ago
        > Simply pointing to "supply and demand" and operating by maximalist principle is a vague argument. You have to actually engage with the fact that housing can never be an ideal markets and that inelasticities are indeed great. I never made a maximalist argument of any kind. I never said there can be an ideal market. I merely think that we should move towards an ideal market (which we will never reach) rather than on rent control (which is at best a band-aid). > I'm not being a pure empiricist. A basic theory made an empirical prediction - that rent control would decrease supply - and the theory is wrong. You can't then use the same theory that made an already incorrect prediction to make a second prediction that is this time almost impossible to evaluate empirically. Find another theory and make an original prediction, without ex-post-facto retconning, and we can judge that theory on the merits. The idea that some studies have falsified supply and demand is bizarre. You're assuming "inelasticities" and regulations are fixed for some reason. Ease zoning restrictons and watch supply increase. Then enact rent control and watch supply decrease.

by slibhb 5y ago

sudosysgen 5y ago

We know, empirically, that rent control, when it satisfies some key constraints, is effective. Unless you are one of those that thinks that economics isn't subject to the scientific method, reality trumps theory. And it's false that we have no theory of why rent control is effective, we absolutely do.

slibhb 5y ago
You and the above poster are overstating your case. Your post boils down to "don't u believe in science lol?" I agree with this comment: https://jwmason.org/slackwire/considerations-on-rent-control/#comment-1330 https://jwmason.org/slackwire/considerations-on-rent-control... I think that if rent control doesn't hurt housing supply, it's because of various regulations that are distorting the market. Enacting rent control instead of reforming those regulations seems silly to me.
- sudosysgen 5y ago
  It's on you to show an example of a city where these various regulations are absent and where rent control hurt housing supply. Good luck. I'm being serious here, if you think that a vague, purely theoretical argument, from theories that we already know are very far from complete, is a match for empirical evidence, then you are not treating economics as a science.
  - slibhb 5y ago
    There's nothing vague about the argument against rent control. Further, I don't agree with your view of science. Empirical evidence matters but the pure empiricism that you're advocating is not convincing to me. I think we would be better off reforming regulations that are preventing people from building than enacting rent control. That seems like a very reasonable opinion with plenty of support from economists. I find your posts in this thread overly dismissive and aggressive.
    - sudosysgen 5y ago
      No, the argument is indeed vague. There are plenty of situations where intervening in the market actually increases efficiency - for example, patents, state monopolies on utilities, minimum wages, etc... Simply pointing to "supply and demand" and operating by maximalist principle is a vague argument. You have to actually engage with the fact that housing can never be an ideal markets and that inelasticities are indeed great. Again, if you think that these regulations are both more effective and exclusive to rent control, you can find empirical evidence. I'm not being a pure empiricist. A basic theory made an empirical prediction - that rent control would decrease supply - and the theory is wrong. You can't then use the same theory that made an already incorrect prediction to make a second prediction that is this time almost impossible to evaluate empirically. Find another theory and make an original prediction, without ex-post-facto retconning, and we can judge that theory on the merits. As it is, we already know that simple neoclassical market theory does not apply to markets with significant price in-elasticity and friction, and the housing market is and will always be like that. It's theory that is often wrong, that is wrong here again, you can't rely on it over the empirical evidence by retconning your predictions after the fact. That's just bad science. In another field that would get you laughed out of the room.
      - slibhb 5y ago
        > Simply pointing to "supply and demand" and operating by maximalist principle is a vague argument. You have to actually engage with the fact that housing can never be an ideal markets and that inelasticities are indeed great. I never made a maximalist argument of any kind. I never said there can be an ideal market. I merely think that we should move towards an ideal market (which we will never reach) rather than on rent control (which is at best a band-aid). > I'm not being a pure empiricist. A basic theory made an empirical prediction - that rent control would decrease supply - and the theory is wrong. You can't then use the same theory that made an already incorrect prediction to make a second prediction that is this time almost impossible to evaluate empirically. Find another theory and make an original prediction, without ex-post-facto retconning, and we can judge that theory on the merits. The idea that some studies have falsified supply and demand is bizarre. You're assuming "inelasticities" and regulations are fixed for some reason. Ease zoning restrictons and watch supply increase. Then enact rent control and watch supply decrease.