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Rent control actually works great for the limited number of people who can get into rent-controlled housing. They love it! Unless you want to move to a differen

Rent control actually works great for the limited number of people who can get into rent-controlled housing. They love it! Unless you want to move to a different apartment, or have your friends move near you, or have any pressure on your landlord to improve the property, or… It’s everyone else who suffers the most. Usually they have no choice but to move somewhere else or stay at home with parents, so you can’t get an accurate picture by looking at aggregate household statistics. Unless you’re deliberately trying to ignore everyone excluded by these policies. Rent control is one of those policies that sounds great as long as you ignore second-order effects and pretend the population and economy never change. In practice it just creates a different system of haves and have-nots while removing any chance for the market to compensate.

pydry 5y ago
>It’s everyone else who suffers. Usually they have no choice but to move somewhere else or stay at home with parents A lot like London without rent control then, but if rent control were implemented it would be the primary culprit for what's happening anyway? Color me skeptical. Seems to me it's the landlords that really "suffer". E.g. the SF landlords that paid a tenant hundreds of thousands to get them out ( https://apnews.com/article/lifestyle-business-san-francisco-4fa0a9df027a5c40855af209dedb88e3 https://apnews.com/article/lifestyle-business-san-francisco-... ). Rent control just decides whether the "spoils" of restricted supply go to landlords with the most capital or the renters who lived in the city the longest. Hacker news cries bitterly about nimbyism (especially in SF) that restricts development to keep up property values and rents. Whom do they think is most incentivized to do that? Redirect those spoils to leveraged landlords and find out.
- Gimpei 5y ago
  There is lots of research on this. Here's one heavily cited paper that finds what the previous poster was suggesting. Fine to disagree, but it would be nice to see some counter evidence. https://web.stanford.edu/~diamondr/DMQ.pdf https://web.stanford.edu/~diamondr/DMQ.pdf In terms of London, there is also the problem of building restrictions. I don't think we're going to see tall residential towers popping up in say, Mayfair, anytime soon. I understand that this kind of change would completely transform the character of London. But the price of not wanting change is sky high rents.
  - blitzar 5y ago
    Not in Mayfair, but all around the fringes of the city they are. If you want a £500,000 studio flat 30 minutes away from central london by tube there is a massive amount of supply. If however, you can afford said property, you probably dont want to jam your wife and 2 kids into it.
    - philjohn 5y ago
      And with high speed trains on the west coast mainline you can get a 5 bed detached with garden for around that - with Euston reachable in 45-50 minutes in places like Rugby.
  - wahern 5y ago
    I'm generally favorable to rent control (it's a socio-political tradeoff, like all public policies), but rent control on single-family homes or single units (as with renting an in-law), which is what that paper examines, is a horrible policy. The consequences for landlords are far more extreme than rent control on large, multi-unit buildings. This makes it's difficult to infer similar supply effects between rent control on single-family homes and on multi-unit buildings. Turnover in SF is actually quite robust. The vast majority of tenants don't stay in the same apartment for decades. This is especially true during boom periods. IOW, ebbs & flows in turnover actually tend to benefit landlords. But a small number do. The average turnover rate is ~20%, which means the average occupancy is ~5 years. For large buildings what matters is the average. The fewer the number of units (either in a building, or in your portfolio), the riskier things become. The riskiest of all is a single-family home, whether you rent out an in-law or the whole house. In the face of rent control you're not only risking being stuck with the same person indefinitely, paying an increasingly below market rent, but you're locking up for an indefinite period what is probably your largest and most important asset. It's a potential financial nightmare, and one with realistic odds (e.g. maybe 1 in 10 instead 1 in 10000) of befalling you. As the building grows larger, the more the risk is spread and you can rely on the average occupancy term. Moreover, the larger the building, the less likely one would want to tear it down to build something larger. IOW, the larger the building, the more closely your expected future investment returns approach non-rent control levels. Rent control policies should be accompanied by policies that promote densification. All forms of rent control will tend to reduce supply to some extent (at least, that should be the a priori expectation), but rent control also provides important social benefits. IMO, those lines cross, but I would never expect the benefits to be greater than the costs in the context of single-family homes.
- PragmaticPulp 5y ago
  > A lot like London without rent control then, but if rent control were implemented it would be the primary culprit for what's happening anyway? I’m not sure what you’re trying to suggest about hypothetical rent control in London, but it should be clear that London was geographically exhausted long ago and they’ve been debating architectural preservation and building height control ever since. You can’t simply buy a property in London, knock it down, and build a 50-story skyscraper. Using it for your case study on rent control doesn’t make any sense. > Seems to me it's the landlords that really "suffer". This is the fantasy: Stick it to those evil developers and landlords, amirite? The fallacy is assuming that you get the exact same apartment under rent control, but cheaper. You don’t. The truth is that being a rent-controlled landlord is easy mode. You have very little competition, by law, and the waiting list to get into your apartment can be years or decades long. As a result, you don’t have to compete on anything. Who’s going to turn your apartment down when it’s their only shot at housing and no one’s building new construction to compete at artificially depressed prices? Now you don’t have to worry about installing good appliances or even nice carpet. The air condition doesn’t work well? Too bad, as long as it meets regulations (if any) then that’s good enough. Why would you if your tenants aren’t choosing based on competition? The tenants suffer, too. And you’re still ignoring all of the people locked out of the system by the ensuing decade-long wait lines, as is the case in this article.
  - pydry 5y ago
    >I’m not sure what you’re trying to suggest about hypothetical rent control in London I'm stating that the extreme lack of supply ascribed to rent control also exists in similar cities without rent control. So maybe rent control's effect on supply is vastly overblown as you can see by looking at the large amount of house-building in NYC before 1974 in the graph above, which is when rent control laws started getting really watered down. >It should be clear that London was geographically exhausted long ago Thats kind of absurd. It only recently caught up to prewar population levels. Property prices skyrocketed way before that. >The truth is that being a rent-controlled landlord is easy mode. If they like it so much why do they try to trick/bully tenants into leaving or offer large sums of money to tenants to leave if that fails? >And you’re still ignoring all of the people locked out of the system by the ensuing decade-long wait Give leveraged landlords market rent in restricted supply environments like SF and the FIRST thing they will try to do is to inhibit further development with NIMBYism that might bring down their rents and damage their investment. Detractors of rent control tend to feign support for new residents but theyre perfectly happy for them to be priced out alongside the long term residents of the city. More social housing fixes the underlying supply issue. Higher property taxes fixes the underlying supply issue. Wanting to kill rent control before or instead of fixing these things means being concerned with profit, not people. Rent control is a band aid while that happens to keep long term (especially elderly/vulnerable) renters housed. And landlords loathe it.
- nearbuy 5y ago
  There are few mechanisms through which rent control can hurt. Rent control discourages building more units. The more you can make from rental, the more companies will invest in new construction projects. Rent control can decrease efficiency of living situations. You can imagine an old woman living alone in a 3 bedroom unit with rent control because it would be more expensive for her to move to a smaller unit. Or someone who gets a new job far from their current rent-controlled apartment but won't move out because the rent is so much cheaper.
  - pydry 5y ago
    >Rent control discourages building more units. Yet the strictest rent controls went hand in hand with the fastest homebuilding spree in 1950s NYC. It clearly didnt discourage that much. Maybe it didnt discourage it at all? Or maybe it does a bit but is eclipsed by the effect of, say, NIMBY landlords inhibiting development, hellbent on staying above water on their eyewatering SF mortgage. >Rent control can decrease efficiency of living situations. You can imagine an old woman living alone in a 3 bedroom unit with rent control because it would be more expensive for her to move to a smaller unit. I can imagine. She could get priced out of the city entirely I suppose. It seems to me that if the market rate is intent on 10x'ing her rent maybe it's the market that should be forced to adjust first, not her. More home building. Higher property taxes. Rent control while the effects kick in.
    - Manuel_D 5y ago
      Seattle (which is for forbidden by the state from implementing rent control) added 2-3x the housing units as San Francisco from 2010-2020 despite similar population growth in both cities. The impact of price controls on supply is a well studied phenomenon. Lower price for something -> less incentive to produce it.
      - pydry 5y ago
        If you look at the data above it shows home building peaking in the early 1960s in NYC. Rent control laws were strong until the 1970s. That's the point when homebuilding plunged and didn't perk up for decades. Weakening them in 1974 if anything seemed to restrict supply. SF has comically low density housing that is driven by homeowners lobbying to restrict development. The difference between SF and Seattle is probably property taxes (higher in Seattle). It discourages land from being hoarded and used unproductively.
- deleted 5y ago
  [deleted]
- collyw 5y ago
  Interesting way of looking at it, but if you want to make a positive impact for the most people then supplying more housing would make a lot more sense than messing with prices.
- paulddraper 5y ago
  London's problem isn't "rent control." It's "construction control." London permitting just will not allow builders to construct enough housing. Perhaps for worthy reasons, or perhaps not, but regardless there's no question as to the source of London's housing shortage.
ProjectArcturis 5y ago
The point is, rental markets without rent control are also failing to provide affordable housing. It's a quandary with no obvious solutions.
- toomuchtodo 5y ago
  There is no solution. There’s only so much land, not everyone wants to be surrounded by skyscrapers. Some people will get to live where they want, some people won’t. Supply and demand.
  - marvin 5y ago
    All half measures to «fix» the housing market are just variations around this theme. If there’s political consensus against the only solution that fixes the root cause — building much more — then any other measure to alleviate the problem will be varying degrees of dysfunctional and ineffective. I’d be delighted to be proven wrong, but it seems unlikely.
    - toomuchtodo 5y ago
      What you call dysfunction I would call the market reaching equilibrium. The market is working efficiently if pricing signals cause housing seekers to look elsewhere due to limited supply or market clearing prices beyond their means. For example, not everyone can afford San Francisco, but there is a lot of buildable land besides SF in California (the Central Valley, for instance). Everyone should be housed, but it’s likely it might not be their first choice.
      - ChrisLTD 5y ago
        I'd agree if San Francisco was full, but it's possible to build up and increase density so people can live close to their jobs. People per square mile: San Francisco: 17,246.4 Brooklyn: 35,369.1 Manhattan: 69,467.5
        5y ago
ChicagoBoy11 5y ago
The same can be said for minimum hourly employment requirements, too. It is interpreted as a guarantee to make $X, but in reality, it is literally a prohibition to make <$X. Most people I talk to take employment (at the aggregate and individual level) as constants when discussing this, but that's not how this works. For employment, for instance, much more useful analysis comes out of lifetime income analysis. We really ought not care how many people earn minimum wage... we ought to really care how their wage changes over time. Not even suggesting that there isn't merit to a minimum wage, but just that our discourse of it almost always omits the point you bring up about "everyone else who suffers." That's important to talk about.
- Spooky23 5y ago
  That’s comparing apples to oranges. Minimum wages reduce some of the exploitation that low quality employers will always engage in. If you travel to a state that has the lowest minimum wage for waitresses, you won’t find more waitstaff, lower prices or better quality. Just more misery. Any further erosion of worker rights in this gilded age is gross and unacceptable.
  - jdminhbg 5y ago
    Very true. Visit high minimum wage areas like San Francisco and Seattle, with no visible misery at all.
    - HarryHirsch 5y ago
      So... a lower minimum wage will solve the homeless problem? That does not compute.
  - sokoloff 5y ago
    When I travel to places with lower minimum wages, I do tend to find lower prices.* Get yourself a breakfast omelette plate in San Francisco and the same order in Jackson, MS. I can pretty much guarantee that the plate in Jackson will be less, possibly 50% less. * I don’t claim it’s caused by the minimum wage difference, but it seems pretty strongly correlated.
Spooky23 5y ago
Rent control is a nuanced thing, it’s a great and valuable tool if it’s combined with housing growth. As people in general are becoming poorer, we’re shifting towards either more rentals or less safe/sound construction practices. Tenants need rights beyond market forces to avoid a revolving door of 1 year leases, etc. Stability in communities is important for both families and the community at large. That said, the unchecked development model where construction of actual homes is impossible, or where exclusionary construction is allowed (entire buildings of studio apartments, no family apartments, etc), you are correct, rent control just benefits incumbents.
j1elo 5y ago
So the difference between with and without rent control is just a matter of who gets excluded? With rent control, basically those who were there first get the housing, those who come later are out of luck. Without rent control, those who are more wealthy can afford the housing, those who are poorer are out of luck. If that was the only oversimplified way to see the effects of rent control, I'm sincerely not sure of what would sound better (or less worse) to me. I like when a city keeps its soul and doesn't slowly become a theme park for rich people (which is what I see in mine over the decades).
- luckylion 5y ago
  > Without rent control, those who are more wealthy can afford the housing, those who are poorer are out of luck. I prefer that. It's not just about wealth, but also about how much you want to live there. I know people who earn about as much as me and spend > 30% of their net income on rent because they want to live in a trendy area. I don't need to live there, so I was able to choose differently and pay ~12% of my net income. Also: with wealth, there's at least some correlation with merit. With a lottery, there's none.
  - mrkickling 5y ago
    I feel a bit confused about what you mean with that it is not about wealth. If two people wants to live in a place as much and they both are ready to give 30% of their net income, the richer one would get the apartment in a system with no rent control, right? Your point only makes sense if everyone had the same net income. Secondly, why is the merit of high income more valuable than waiting in the line for longest time? None of them is a lottery in my opinion.
    - luckylion 5y ago
      I said it's not just about wealth. Yes, if both a millionaire and an average salaried employee spend 30% of their income, the millionaire will always get the house. But they don't compete for the same real estate. Instead, the average person competes with others grouped around the average, and 30% vs 15% of income is a significant difference. If you really, really want to live in the prime location, you can, you just have to spend more. > Secondly, why is the merit of high income more valuable than waiting in the line for longest time? Because it correlates with useful stuff being done for society. Not perfectly, of course, but somewhat. Waiting doesn't at all. And it's usually not about "waiting", it's often about being part of some group, having the luck of the draw, knowing someone in the office that assigns priorities, or "inheriting" the right to live in some (publicly owned) flat from your parents. What happens then? Person A lives in a very desirable place, person B does not, and person B has to subsidize A's flat.
jfrunyon 5y ago
> or have any pressure on your landlord to improve the property Not sure what you think that has to do with rent control?
- recursive 5y ago
  Without rent control, if your landlord doesn't improve the property, there's a credible threat that the tenant will move out. With rent control, that threat will not be taken seriously.
- jjav 5y ago
  > > or have any pressure on your landlord to improve the property > Not sure what you think that has to do with rent control? With rent control, the owner may not be able to afford to do any maintenance (let alone improvements) if the tenant has been there long enough that the landlord is losing money every month. But also, the tenant knows they have a deal they can't replicate anywhere else so they have an incentive to never move out, even if the place falls in disrepair. Without rent control, the tenant is free to move out if conditions are not acceptable and the landlord can afford to maintain the place. But, not every rent control city is the same of course, details matter. In some cities maintenance or improvements are allowed to reflect in rent, in some places they don't. So it depends.
deleted 5y ago
[deleted]
8note 5y ago
That everyone else bit is not having enough rent control, isn't it? The situations where rent control don't apply still suck. More rent control would cover those, no?
standardUser 5y ago
Rent control is easy to criticize if you use straw men. Not ever implementation of rent control is or needs to be so extreme as to cause these types of problems. There exists a level of rent control that can prevent families form being rapidly evicted from their communities via rent increases and does not dramatically distort the housing market. Just because many implementations are terrible doesn't negate the concept.
- DaiPlusPlus 5y ago
  “Rent control” is like “Defund the police”: you can have the most reasoned, well-thought-out, evidence-based policy proposal, but as soon as it gets a label that’s accurate enough that advocates can’t muster the mental energy to enter into a detailed technical discussion with every Internet comment poster that misunderstands what is proposed - but so-loaded with connotations and political innuendo that the ideological other-half of the country parrots the misrepresentations because thinking less of the opposition makes them feel good. So let’s agree to avoid the buzzword. What’s a more accurate - yet succinct - phrase to describe housing market controls that protect the least fortunate of us from being priced out of their homes and communities without disrupting the significant market forces which should - ideally - be promoting new housing construction? (Also, ban unsustainable zoning regs, enact an unimproved land value tax, and only allow greenbelts in areas with full mixed-use developments without building height restrictions)
  - throwaway0a5e 5y ago
    It's also like "defund the police" in that you have both carefully thought out policy changes and completely asinine extremist ideas co-mingling under the same label and the people peddling the latter use the former as cover when their BS is called out for what it is.
thatfrenchguy 5y ago
> Rent control is one of those policies that sounds great as long as you ignore second-order effects and pretend the population and economy never change. In practice it just creates a different system of haves and have-nots while removing any chance for the market to compensate. Meh, rent control has almost no effect on a market where there is enough housing. Ownership of housing has the exact same consequences as rent control, and is even more likely to have crazy NIMBYs preventing anyone from building new housing (looking at you the bay area).

pydry 5y ago

>It’s everyone else who suffers. Usually they have no choice but to move somewhere else or stay at home with parents A lot like London without rent control then, but if rent control were implemented it would be the primary culprit for what's happening anyway? Color me skeptical. Seems to me it's the landlords that really "suffer". E.g. the SF landlords that paid a tenant hundreds of thousands to get them out ( https://apnews.com/article/lifestyle-business-san-francisco-4fa0a9df027a5c40855af209dedb88e3 https://apnews.com/article/lifestyle-business-san-francisco-... ). Rent control just decides whether the "spoils" of restricted supply go to landlords with the most capital or the renters who lived in the city the longest. Hacker news cries bitterly about nimbyism (especially in SF) that restricts development to keep up property values and rents. Whom do they think is most incentivized to do that? Redirect those spoils to leveraged landlords and find out.

Gimpei 5y ago
There is lots of research on this. Here's one heavily cited paper that finds what the previous poster was suggesting. Fine to disagree, but it would be nice to see some counter evidence. https://web.stanford.edu/~diamondr/DMQ.pdf https://web.stanford.edu/~diamondr/DMQ.pdf In terms of London, there is also the problem of building restrictions. I don't think we're going to see tall residential towers popping up in say, Mayfair, anytime soon. I understand that this kind of change would completely transform the character of London. But the price of not wanting change is sky high rents.
- blitzar 5y ago
  Not in Mayfair, but all around the fringes of the city they are. If you want a £500,000 studio flat 30 minutes away from central london by tube there is a massive amount of supply. If however, you can afford said property, you probably dont want to jam your wife and 2 kids into it.
  - philjohn 5y ago
    And with high speed trains on the west coast mainline you can get a 5 bed detached with garden for around that - with Euston reachable in 45-50 minutes in places like Rugby.
- wahern 5y ago
  I'm generally favorable to rent control (it's a socio-political tradeoff, like all public policies), but rent control on single-family homes or single units (as with renting an in-law), which is what that paper examines, is a horrible policy. The consequences for landlords are far more extreme than rent control on large, multi-unit buildings. This makes it's difficult to infer similar supply effects between rent control on single-family homes and on multi-unit buildings. Turnover in SF is actually quite robust. The vast majority of tenants don't stay in the same apartment for decades. This is especially true during boom periods. IOW, ebbs & flows in turnover actually tend to benefit landlords. But a small number do. The average turnover rate is ~20%, which means the average occupancy is ~5 years. For large buildings what matters is the average. The fewer the number of units (either in a building, or in your portfolio), the riskier things become. The riskiest of all is a single-family home, whether you rent out an in-law or the whole house. In the face of rent control you're not only risking being stuck with the same person indefinitely, paying an increasingly below market rent, but you're locking up for an indefinite period what is probably your largest and most important asset. It's a potential financial nightmare, and one with realistic odds (e.g. maybe 1 in 10 instead 1 in 10000) of befalling you. As the building grows larger, the more the risk is spread and you can rely on the average occupancy term. Moreover, the larger the building, the less likely one would want to tear it down to build something larger. IOW, the larger the building, the more closely your expected future investment returns approach non-rent control levels. Rent control policies should be accompanied by policies that promote densification. All forms of rent control will tend to reduce supply to some extent (at least, that should be the a priori expectation), but rent control also provides important social benefits. IMO, those lines cross, but I would never expect the benefits to be greater than the costs in the context of single-family homes.
PragmaticPulp 5y ago
> A lot like London without rent control then, but if rent control were implemented it would be the primary culprit for what's happening anyway? I’m not sure what you’re trying to suggest about hypothetical rent control in London, but it should be clear that London was geographically exhausted long ago and they’ve been debating architectural preservation and building height control ever since. You can’t simply buy a property in London, knock it down, and build a 50-story skyscraper. Using it for your case study on rent control doesn’t make any sense. > Seems to me it's the landlords that really "suffer". This is the fantasy: Stick it to those evil developers and landlords, amirite? The fallacy is assuming that you get the exact same apartment under rent control, but cheaper. You don’t. The truth is that being a rent-controlled landlord is easy mode. You have very little competition, by law, and the waiting list to get into your apartment can be years or decades long. As a result, you don’t have to compete on anything. Who’s going to turn your apartment down when it’s their only shot at housing and no one’s building new construction to compete at artificially depressed prices? Now you don’t have to worry about installing good appliances or even nice carpet. The air condition doesn’t work well? Too bad, as long as it meets regulations (if any) then that’s good enough. Why would you if your tenants aren’t choosing based on competition? The tenants suffer, too. And you’re still ignoring all of the people locked out of the system by the ensuing decade-long wait lines, as is the case in this article.
- pydry 5y ago
  >I’m not sure what you’re trying to suggest about hypothetical rent control in London I'm stating that the extreme lack of supply ascribed to rent control also exists in similar cities without rent control. So maybe rent control's effect on supply is vastly overblown as you can see by looking at the large amount of house-building in NYC before 1974 in the graph above, which is when rent control laws started getting really watered down. >It should be clear that London was geographically exhausted long ago Thats kind of absurd. It only recently caught up to prewar population levels. Property prices skyrocketed way before that. >The truth is that being a rent-controlled landlord is easy mode. If they like it so much why do they try to trick/bully tenants into leaving or offer large sums of money to tenants to leave if that fails? >And you’re still ignoring all of the people locked out of the system by the ensuing decade-long wait Give leveraged landlords market rent in restricted supply environments like SF and the FIRST thing they will try to do is to inhibit further development with NIMBYism that might bring down their rents and damage their investment. Detractors of rent control tend to feign support for new residents but theyre perfectly happy for them to be priced out alongside the long term residents of the city. More social housing fixes the underlying supply issue. Higher property taxes fixes the underlying supply issue. Wanting to kill rent control before or instead of fixing these things means being concerned with profit, not people. Rent control is a band aid while that happens to keep long term (especially elderly/vulnerable) renters housed. And landlords loathe it.
nearbuy 5y ago
There are few mechanisms through which rent control can hurt. Rent control discourages building more units. The more you can make from rental, the more companies will invest in new construction projects. Rent control can decrease efficiency of living situations. You can imagine an old woman living alone in a 3 bedroom unit with rent control because it would be more expensive for her to move to a smaller unit. Or someone who gets a new job far from their current rent-controlled apartment but won't move out because the rent is so much cheaper.
- pydry 5y ago
  >Rent control discourages building more units. Yet the strictest rent controls went hand in hand with the fastest homebuilding spree in 1950s NYC. It clearly didnt discourage that much. Maybe it didnt discourage it at all? Or maybe it does a bit but is eclipsed by the effect of, say, NIMBY landlords inhibiting development, hellbent on staying above water on their eyewatering SF mortgage. >Rent control can decrease efficiency of living situations. You can imagine an old woman living alone in a 3 bedroom unit with rent control because it would be more expensive for her to move to a smaller unit. I can imagine. She could get priced out of the city entirely I suppose. It seems to me that if the market rate is intent on 10x'ing her rent maybe it's the market that should be forced to adjust first, not her. More home building. Higher property taxes. Rent control while the effects kick in.
  - Manuel_D 5y ago
    Seattle (which is for forbidden by the state from implementing rent control) added 2-3x the housing units as San Francisco from 2010-2020 despite similar population growth in both cities. The impact of price controls on supply is a well studied phenomenon. Lower price for something -> less incentive to produce it.
    - pydry 5y ago
      If you look at the data above it shows home building peaking in the early 1960s in NYC. Rent control laws were strong until the 1970s. That's the point when homebuilding plunged and didn't perk up for decades. Weakening them in 1974 if anything seemed to restrict supply. SF has comically low density housing that is driven by homeowners lobbying to restrict development. The difference between SF and Seattle is probably property taxes (higher in Seattle). It discourages land from being hoarded and used unproductively.
deleted 5y ago
[deleted]
collyw 5y ago
Interesting way of looking at it, but if you want to make a positive impact for the most people then supplying more housing would make a lot more sense than messing with prices.
paulddraper 5y ago
London's problem isn't "rent control." It's "construction control." London permitting just will not allow builders to construct enough housing. Perhaps for worthy reasons, or perhaps not, but regardless there's no question as to the source of London's housing shortage.

ProjectArcturis 5y ago

The point is, rental markets without rent control are also failing to provide affordable housing. It's a quandary with no obvious solutions.

toomuchtodo 5y ago
There is no solution. There’s only so much land, not everyone wants to be surrounded by skyscrapers. Some people will get to live where they want, some people won’t. Supply and demand.
- marvin 5y ago
  All half measures to «fix» the housing market are just variations around this theme. If there’s political consensus against the only solution that fixes the root cause — building much more — then any other measure to alleviate the problem will be varying degrees of dysfunctional and ineffective. I’d be delighted to be proven wrong, but it seems unlikely.
  - toomuchtodo 5y ago
    What you call dysfunction I would call the market reaching equilibrium. The market is working efficiently if pricing signals cause housing seekers to look elsewhere due to limited supply or market clearing prices beyond their means. For example, not everyone can afford San Francisco, but there is a lot of buildable land besides SF in California (the Central Valley, for instance). Everyone should be housed, but it’s likely it might not be their first choice.
    - ChrisLTD 5y ago
      I'd agree if San Francisco was full, but it's possible to build up and increase density so people can live close to their jobs. People per square mile: San Francisco: 17,246.4 Brooklyn: 35,369.1 Manhattan: 69,467.5
      - 5y ago

ChicagoBoy11 5y ago

The same can be said for minimum hourly employment requirements, too. It is interpreted as a guarantee to make $X, but in reality, it is literally a prohibition to make <$X. Most people I talk to take employment (at the aggregate and individual level) as constants when discussing this, but that's not how this works. For employment, for instance, much more useful analysis comes out of lifetime income analysis. We really ought not care how many people earn minimum wage... we ought to really care how their wage changes over time. Not even suggesting that there isn't merit to a minimum wage, but just that our discourse of it almost always omits the point you bring up about "everyone else who suffers." That's important to talk about.

Spooky23 5y ago
That’s comparing apples to oranges. Minimum wages reduce some of the exploitation that low quality employers will always engage in. If you travel to a state that has the lowest minimum wage for waitresses, you won’t find more waitstaff, lower prices or better quality. Just more misery. Any further erosion of worker rights in this gilded age is gross and unacceptable.
- jdminhbg 5y ago
  Very true. Visit high minimum wage areas like San Francisco and Seattle, with no visible misery at all.
  - HarryHirsch 5y ago
    So... a lower minimum wage will solve the homeless problem? That does not compute.
- sokoloff 5y ago
  When I travel to places with lower minimum wages, I do tend to find lower prices.* Get yourself a breakfast omelette plate in San Francisco and the same order in Jackson, MS. I can pretty much guarantee that the plate in Jackson will be less, possibly 50% less. * I don’t claim it’s caused by the minimum wage difference, but it seems pretty strongly correlated.

Spooky23 5y ago

Rent control is a nuanced thing, it’s a great and valuable tool if it’s combined with housing growth. As people in general are becoming poorer, we’re shifting towards either more rentals or less safe/sound construction practices. Tenants need rights beyond market forces to avoid a revolving door of 1 year leases, etc. Stability in communities is important for both families and the community at large. That said, the unchecked development model where construction of actual homes is impossible, or where exclusionary construction is allowed (entire buildings of studio apartments, no family apartments, etc), you are correct, rent control just benefits incumbents.

j1elo 5y ago

So the difference between with and without rent control is just a matter of who gets excluded? With rent control, basically those who were there first get the housing, those who come later are out of luck. Without rent control, those who are more wealthy can afford the housing, those who are poorer are out of luck. If that was the only oversimplified way to see the effects of rent control, I'm sincerely not sure of what would sound better (or less worse) to me. I like when a city keeps its soul and doesn't slowly become a theme park for rich people (which is what I see in mine over the decades).

luckylion 5y ago
> Without rent control, those who are more wealthy can afford the housing, those who are poorer are out of luck. I prefer that. It's not just about wealth, but also about how much you want to live there. I know people who earn about as much as me and spend > 30% of their net income on rent because they want to live in a trendy area. I don't need to live there, so I was able to choose differently and pay ~12% of my net income. Also: with wealth, there's at least some correlation with merit. With a lottery, there's none.
- mrkickling 5y ago
  I feel a bit confused about what you mean with that it is not about wealth. If two people wants to live in a place as much and they both are ready to give 30% of their net income, the richer one would get the apartment in a system with no rent control, right? Your point only makes sense if everyone had the same net income. Secondly, why is the merit of high income more valuable than waiting in the line for longest time? None of them is a lottery in my opinion.
  - luckylion 5y ago
    I said it's not just about wealth. Yes, if both a millionaire and an average salaried employee spend 30% of their income, the millionaire will always get the house. But they don't compete for the same real estate. Instead, the average person competes with others grouped around the average, and 30% vs 15% of income is a significant difference. If you really, really want to live in the prime location, you can, you just have to spend more. > Secondly, why is the merit of high income more valuable than waiting in the line for longest time? Because it correlates with useful stuff being done for society. Not perfectly, of course, but somewhat. Waiting doesn't at all. And it's usually not about "waiting", it's often about being part of some group, having the luck of the draw, knowing someone in the office that assigns priorities, or "inheriting" the right to live in some (publicly owned) flat from your parents. What happens then? Person A lives in a very desirable place, person B does not, and person B has to subsidize A's flat.

jfrunyon 5y ago

> or have any pressure on your landlord to improve the property Not sure what you think that has to do with rent control?

recursive 5y ago
Without rent control, if your landlord doesn't improve the property, there's a credible threat that the tenant will move out. With rent control, that threat will not be taken seriously.
jjav 5y ago
> > or have any pressure on your landlord to improve the property > Not sure what you think that has to do with rent control? With rent control, the owner may not be able to afford to do any maintenance (let alone improvements) if the tenant has been there long enough that the landlord is losing money every month. But also, the tenant knows they have a deal they can't replicate anywhere else so they have an incentive to never move out, even if the place falls in disrepair. Without rent control, the tenant is free to move out if conditions are not acceptable and the landlord can afford to maintain the place. But, not every rent control city is the same of course, details matter. In some cities maintenance or improvements are allowed to reflect in rent, in some places they don't. So it depends.

deleted 5y ago

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8note 5y ago

That everyone else bit is not having enough rent control, isn't it? The situations where rent control don't apply still suck. More rent control would cover those, no?

standardUser 5y ago

Rent control is easy to criticize if you use straw men. Not ever implementation of rent control is or needs to be so extreme as to cause these types of problems. There exists a level of rent control that can prevent families form being rapidly evicted from their communities via rent increases and does not dramatically distort the housing market. Just because many implementations are terrible doesn't negate the concept.

DaiPlusPlus 5y ago
“Rent control” is like “Defund the police”: you can have the most reasoned, well-thought-out, evidence-based policy proposal, but as soon as it gets a label that’s accurate enough that advocates can’t muster the mental energy to enter into a detailed technical discussion with every Internet comment poster that misunderstands what is proposed - but so-loaded with connotations and political innuendo that the ideological other-half of the country parrots the misrepresentations because thinking less of the opposition makes them feel good. So let’s agree to avoid the buzzword. What’s a more accurate - yet succinct - phrase to describe housing market controls that protect the least fortunate of us from being priced out of their homes and communities without disrupting the significant market forces which should - ideally - be promoting new housing construction? (Also, ban unsustainable zoning regs, enact an unimproved land value tax, and only allow greenbelts in areas with full mixed-use developments without building height restrictions)
- throwaway0a5e 5y ago
  It's also like "defund the police" in that you have both carefully thought out policy changes and completely asinine extremist ideas co-mingling under the same label and the people peddling the latter use the former as cover when their BS is called out for what it is.

thatfrenchguy 5y ago

> Rent control is one of those policies that sounds great as long as you ignore second-order effects and pretend the population and economy never change. In practice it just creates a different system of haves and have-nots while removing any chance for the market to compensate. Meh, rent control has almost no effect on a market where there is enough housing. Ownership of housing has the exact same consequences as rent control, and is even more likely to have crazy NIMBYs preventing anyone from building new housing (looking at you the bay area).