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How does it do that? Are the builders typically the same as the owners in Sweden? If so, I could see that being true. But if housing builders are different than
by epistasis 5y ago
How does it do that? Are the builders typically the same as the owners in Sweden? If so, I could see that being true. But if housing builders are different than the eventual owners, the have different economic interests, and rent control shouldn't limit housing production.
- stonemetal12 5y agoDoesn't really matter who the owner is. If it costs 1 million to build a new apartment complex, and rent control means it will only return 500K in a reasonable time frame it doesn't get built. If it returns 1.5 million in a reasonable time frame it does. A builder isn't going to build it if no one will buy it, and no one will buy it if they lose money on the rent.
- epistasis 5y agoRent control doesn't apply to the price of new housing, at least for any the many many versions of rent control I've seen. Rent control only limits the increases on existing housing. The new building can charge whatever they want, they just can't depend on large increases in rent later on after their initial pricing. This same assumption, no huge rise in rents later, is also applied by financiers.
- sokoloff 5y agoHousing is produced because there are buyers are willing to pay an amount $X that makes it attractive to build. Anything that reduces that value $X likely has a negative influence on marginal housing construction.