4 ms·

How is something as simple as basic supply and demand still a shocker to so many people? Rent control is just the government picking the winners and losers, wit

How is something as simple as basic supply and demand still a shocker to so many people? Rent control is just the government picking the winners and losers, with those who are corrupt, play dirty, and generally antisocial being the winners.

TheOtherHobbes 5y ago
Which only happens in housing, and not in - say - defence contracting. Or banking.
occz 5y ago
> How is something as simple as basic supply and demand still a shocker to so many people? Rent control is just the government picking the winners and losers, with those who are corrupt, play dirty, and generally antisocial being the winners. Because it's not just about supply and demand, and attempting to frame it as such is seriously reductionistic. Essentially you're at Why #1 here, and you have at least 4 more Why's before you even begin to scratch the surface of the root cause
- epistasis 5y ago
  This would be a far more convincing comment if you could hint at these other directions, otherwise it's just extremely condescending. I'm a big supporter of rent control. But I also think the problem here is supply and demand. I've never met a supply-and-demand skeptic that would do anything except deny its applicability. They could ever explain why themselves or point to somebody else's explanation. And I've met a fair number of such folks. I'm left thinking that they just don't want to see new homes or new people. But if you have an explanation, I'm all ears.
  - occz 5y ago
    I was wary of trying to go down the rabbit hole of explaining more of the situation, as I don't feel that I'm enough of an expert in the subject. I was merely critical of the lack of nuance in the analysis ("it's just supply and demand"). But let's give it a shot! There's no denying that there is a lack of supply in housing in some parts of Sweden, particularly in Stockholm, where there are very long queues to get a reasonably priced apartment to rent. There's no denying that rent controls are probably one contributing factor to why the supply is too low. But it's important to note that it's just one of many variables in this equation. So what other contributing factors are there? Well, for one, acquiring permits is pretty damn hard in Sweden. It's a long process with a lot of NIMBYism, not entirely unlike what I've understood is the case in San Francisco. There's also the issue of rental units being profitable on a far longer horizon, leading investors looking to make their money back quickly to look at the buyers market instead. Which leads us down the path of the very high prices in the buyers market. What's causing that? For one, very low interest rates in the housing loan market (about 1-2%), but also tax policy, giving lenders a tax deduction relative to their interests payments. Yes, you read that correctly - buying a home, ie being richer than average, comes with tax deductions. In Sweden, paying off your home loan for a long time wasn't even required - you just continually paid the interest, and perhaps lent even more money against your home when the value increased. There's also the fact that the public housing providers have more or less been dismantled in many cases, and sold off to what essentially amounts to slumlords, attempting to game the ever-living hell out of the rent control rules. The playbook is more or less: - Buy old public housing Then - Spend as little as possible on upkeep, be actively hostile to current tenants - When anything goes wrong inside the rental unit, refuse to do anything but a full-scale renovation And - When any tenant moves out, perform a full-scale renovation And finally - Legally raise the price, as the standard of the rental unit has increased, often increasing the price as much as 50% I don't pretend to know the answer to this complex issue, nor do I pretend to entirely understanf every part of it. Nor do I claim that rent control is the right answer or the wrong. But one thing is for sure - reductive arguments claiming that rent control is the root cause is wrong on the basis that it does not begin to understand the issue even slightly. Hopefully this begins to cover some of the nuance of the issue.
    - epistasis 5y ago
      Huh, I didn't except to agree with you nearly 100% on this, but I do! These are all very legitimate concerns. But at the heart of all this is still the supply problem, the lack of housing. I also agree that blaming this on rent control is wrong. But the real problem is enacting rent control, then saying "that's enough, problem solved." Because at the core there is still the shortage problem, which makes al the other problems worse. Has rent control "worked"? Both yea and no. It has worked at what it is meant to do, which is great. But it hasn't solved housing, as too many proponents say it will. Similarly, more housing alone won't solve everything, but it makes all these other problems much easier.
    - merpnderp 5y ago
      All you did was point out why there wasn't enough supply. We all know why big cities have a supply shortage and it is because regulations and existing property owners make it either impossible or too onerous to build more homes. What you did was just state the obvious take away from my statement in a long winded manner, while apparently under the misunderstanding that there's someone left who hasn't heard this all before.
- imtringued 5y ago
  The people who are against rent control want to solve problems before they begin. The ones who want rent control want to appear to solve problems after decades of mismanagement. Of course, abolishing rent control doesn't get rid of mismanagement but rent control is generally used to justify mismanagement.
  - occz 5y ago
    I wish I could believe that, but it's evident that it's just not the case - at least not by all actors advocating against rent control. As mentioned in the article, the prime minister and his government was struck down because they were supporting removing rent controls - without any form of viable replacement. In a perfect world I would also like to see rent control removed, as there certainly are negative consequences from the policy, but removal without viable alternatives literally means that a sizeable chunk of poor people will be out on their asses, more or less. I cannot in good conscience support that.

TheOtherHobbes 5y ago

Which only happens in housing, and not in - say - defence contracting. Or banking.

occz 5y ago

> How is something as simple as basic supply and demand still a shocker to so many people? Rent control is just the government picking the winners and losers, with those who are corrupt, play dirty, and generally antisocial being the winners. Because it's not just about supply and demand, and attempting to frame it as such is seriously reductionistic. Essentially you're at Why #1 here, and you have at least 4 more Why's before you even begin to scratch the surface of the root cause

epistasis 5y ago
This would be a far more convincing comment if you could hint at these other directions, otherwise it's just extremely condescending. I'm a big supporter of rent control. But I also think the problem here is supply and demand. I've never met a supply-and-demand skeptic that would do anything except deny its applicability. They could ever explain why themselves or point to somebody else's explanation. And I've met a fair number of such folks. I'm left thinking that they just don't want to see new homes or new people. But if you have an explanation, I'm all ears.
- occz 5y ago
  I was wary of trying to go down the rabbit hole of explaining more of the situation, as I don't feel that I'm enough of an expert in the subject. I was merely critical of the lack of nuance in the analysis ("it's just supply and demand"). But let's give it a shot! There's no denying that there is a lack of supply in housing in some parts of Sweden, particularly in Stockholm, where there are very long queues to get a reasonably priced apartment to rent. There's no denying that rent controls are probably one contributing factor to why the supply is too low. But it's important to note that it's just one of many variables in this equation. So what other contributing factors are there? Well, for one, acquiring permits is pretty damn hard in Sweden. It's a long process with a lot of NIMBYism, not entirely unlike what I've understood is the case in San Francisco. There's also the issue of rental units being profitable on a far longer horizon, leading investors looking to make their money back quickly to look at the buyers market instead. Which leads us down the path of the very high prices in the buyers market. What's causing that? For one, very low interest rates in the housing loan market (about 1-2%), but also tax policy, giving lenders a tax deduction relative to their interests payments. Yes, you read that correctly - buying a home, ie being richer than average, comes with tax deductions. In Sweden, paying off your home loan for a long time wasn't even required - you just continually paid the interest, and perhaps lent even more money against your home when the value increased. There's also the fact that the public housing providers have more or less been dismantled in many cases, and sold off to what essentially amounts to slumlords, attempting to game the ever-living hell out of the rent control rules. The playbook is more or less: - Buy old public housing Then - Spend as little as possible on upkeep, be actively hostile to current tenants - When anything goes wrong inside the rental unit, refuse to do anything but a full-scale renovation And - When any tenant moves out, perform a full-scale renovation And finally - Legally raise the price, as the standard of the rental unit has increased, often increasing the price as much as 50% I don't pretend to know the answer to this complex issue, nor do I pretend to entirely understanf every part of it. Nor do I claim that rent control is the right answer or the wrong. But one thing is for sure - reductive arguments claiming that rent control is the root cause is wrong on the basis that it does not begin to understand the issue even slightly. Hopefully this begins to cover some of the nuance of the issue.
  - epistasis 5y ago
    Huh, I didn't except to agree with you nearly 100% on this, but I do! These are all very legitimate concerns. But at the heart of all this is still the supply problem, the lack of housing. I also agree that blaming this on rent control is wrong. But the real problem is enacting rent control, then saying "that's enough, problem solved." Because at the core there is still the shortage problem, which makes al the other problems worse. Has rent control "worked"? Both yea and no. It has worked at what it is meant to do, which is great. But it hasn't solved housing, as too many proponents say it will. Similarly, more housing alone won't solve everything, but it makes all these other problems much easier.
  - merpnderp 5y ago
    All you did was point out why there wasn't enough supply. We all know why big cities have a supply shortage and it is because regulations and existing property owners make it either impossible or too onerous to build more homes. What you did was just state the obvious take away from my statement in a long winded manner, while apparently under the misunderstanding that there's someone left who hasn't heard this all before.
imtringued 5y ago
The people who are against rent control want to solve problems before they begin. The ones who want rent control want to appear to solve problems after decades of mismanagement. Of course, abolishing rent control doesn't get rid of mismanagement but rent control is generally used to justify mismanagement.
- occz 5y ago
  I wish I could believe that, but it's evident that it's just not the case - at least not by all actors advocating against rent control. As mentioned in the article, the prime minister and his government was struck down because they were supporting removing rent controls - without any form of viable replacement. In a perfect world I would also like to see rent control removed, as there certainly are negative consequences from the policy, but removal without viable alternatives literally means that a sizeable chunk of poor people will be out on their asses, more or less. I cannot in good conscience support that.