6 ms·

Is rationing ... bad? How would raising the rent change the wait time for ground floor housing? By forcing poor people to move out because richer people want t

Is rationing ... bad? How would raising the rent change the wait time for ground floor housing? By forcing poor people to move out because richer people want to move in? That doesn't sound like a good thing. According to standard economics, since there's a demand, why isn't there other, new housing along these lines - where costs are paid for by investments and entrance fees rather than rents?

kiba 5y ago
Only 160 residents can live there, which only helps a small amount of people.
nanis 5y ago
> Is rationing ... bad? Yes. When a good or service is always available to anyone who can pay the price, all one needs to do is find the money and one can get it. When prices are set artificially low, both current and long term go down which results in perpetual shortages. Since getting the thing now depends not just on being able to come up with the cash, but relies on the pen of a bureaucrat, corruption seeps in and becomes endemic. This charity is able to get it done by requiring adherence to a specific religion which serves both as a selection and an enforcement mechanism. If one is tempted to think of generalizing this, I would recommend reading about both Western socialists waxing poetic about USSR's "solutions" to housing shortages and the reality of housing in the Soviet Union. Unfortunately, city & urban planning programs as well as architecture schools tend to produce a lot of credentialed people who parrot the former.
- jorvi 5y ago
  > Yes. When a good or service is always available to anyone who can pay the price, all one needs to do is find the money and one can get it. This sounds nice but breaks down because shelter is a human need, it is not a new iPhone. I am aware that the solution to housing crises is build build build, and that the more profit is in developing housing the more there is being built, but pretending a place to live is like any other common good is cold and wrong.
  - luckylion 5y ago
    > pretending a place to live is like any other common good is cold and wrong. Does it help if you pretend that it's not? Do you get more investments into housing, and in the end, more houses, if you consider housing different from other markets?
    - jorvi 5y ago
      I am not pretending anything, I am merely pointing out that shelter, like food an water, is a basic human right (although judging by HNs donwvotes, they'd be fine with starving and dehydrating people as long as someone is making a massive profit).
      - luckylion 5y ago
        I think many here disagree with you about it being a human right, because unlike the earlier human rights, it's not "leave people be" at its core, it's "you have to do X for people". If anything, it's a human entitlement, but that doesn't have the same ring to it, I suppose. And then there's the next part: how good and how much? What's the housing that everyone supposedly has a right to? 100sqft? 500? 1000? And of what quality, and where? Do they get to choose the location?
        guerrilla 5y ago
        > If anything, it's a human entitlement, but that doesn't have the same ring to it, I suppose. This is nonsense you just made up. Positive and negative rights are both rights, as is common understood in English but especially as defined within political science and philosophy. [1] 1. https://en.wikipedia.org/wiki/Negative_and_positive_rights https://en.wikipedia.org/wiki/Negative_and_positive_rights
        luckylion 5y ago
        Yes, and positive rights in that context are entitlements. With a right to be housed, you're entitled to a house/apartment/shelter.
- iSnow 5y ago
  But housing doesn't work like this at all. "all one needs to do is find the money" is the mechanism that keeps some people out of the housing market, or at least makes their lives pretty hard. Middle-class families can find the money, but the poor do not and usually cannot (for whatever reasons) raise their value on the job market enough. A case can be made for rationed housing at extremely low prices. If you let anyone in, you would get a cash-flow problem and distort the market, but not if you limit it to the poor.
  - nanis 5y ago
    > But housing doesn't work like this at all. The incentives and the price mechanism is independent of the desire of some people to think this or that good/service is "special".
- eesmith 5y ago
  You presume infinite resources. https://en.wikipedia.org/wiki/The_Wave_(Arizona) https://en.wikipedia.org/wiki/The_Wave_(Arizona) has a rationing system. > Due to the fragile nature of the formation and the large number of people wishing to visit it, a daily lottery system is used to dispense only ten next-day permits in person at the Kanab visitor center. Additionally, ten online permits for each date are available four months in advance of a planned trip. There will be a perpetual shortage. This is not a bad thing ... unless you don't care about preserving things for the future. Do you still think rationing is bad? Or is my example not a case of rationing? Bavaria is majority Catholic. "Demonstrate financial need" is likely a much stronger selection mechanism. You didn't answer my question about why, if there's a wait list for this place, and since it's proven to be economically sustainable, other housing isn't built along these lines. > corruption seeps in and becomes endemic After 500 years, is the Fuggerei endowment fund corrupt? Corruption can seep in whenever the person making the decision isn't the person making the profit. Even in a free market.
  - sokoloff 5y ago
    It’s not obvious to me that this is economically self-sustaining, that is to say it could be recreated starting from scratch today (without the initial grant from the Fuggers).
  - gruez 5y ago
    >Bavaria is majority Catholic. "Demonstrate financial need" is likely a much stronger selection mechanism. According to wikipedia bavaria is only 49.6% catholic. I'm not sure how excluding more than half the population on the basis of religion can be justified. https://en.wikipedia.org/wiki/Bavaria#Demographics https://en.wikipedia.org/wiki/Bavaria#Demographics
    - Moru 5y ago
      German Catholic is pretty strong still. Church runs a lot of hospitals and kid/youth things, daycare and so on. They require Catholic employees, they frown upon non married couples and so on.
    - 5y ago
brixon 5y ago
Since this is not a public service, then no rationing is not bad. In the US, a lot of the homeless shelter are faith based and each only have so many beds to go around each night. There are not more since someone has to put up the money for the investments. And entrance fees would not likely work for anything new and not novel. Only the government can spend more than it makes.
- asdfasgasdgasdg 5y ago
  I don't think you would be permitted to have a faith-based test for entry into a homeless shelter in the US, though, even if the shelter were faith based. I'm not a lawyer but I've seen enough fair housing act noticed when buying, selling, and renting housing.
  - merpnderp 5y ago
    Interesting, but since no money is changing hands I wonder if there are exceptions. I mean I can see some people preferring people sleep on the streets than see a faith-based test allowed to exist, but surely those people's irrationality doesn't prevail?
    - asdfasgasdgasdg 5y ago
      I mean, you could ask the same question for a race-based test, and come to the same basic conclusion: that it is "irrational" to prevent it. I think you have to leave look a little deeper to reach a correct conclusion. Namely: I don't think significantly more free housing would in fact be offered without these regulations. So it would not be rational to allow this type of discrimination. The regulation in essence provides an anchor "price" for free housing, while not distorting the "market" very much. This is a good type of regulation to have.
      - merpnderp 5y ago
        You are confusing housing with homeless shelters.
edouard-harris 5y ago
> Is rationing ... bad? Economics 101 often fails to convey the crucial fact about rationing: under any rationing system that isn't a pure random lottery, the only effect of rationing a good is to change the currency in which that good is priced. [1] For example, I live in Canada. Our healthcare system is single-payer [2], which is isomorphic to saying that it is rationed. So it would not be accurate to say that your access to healthcare in Canada is priced in dollars. But it would be accurate to say that your access to healthcare in Canada is priced in your ability to navigate bureaucracy, the flexibility of your working hours (to snag last-minute appointments), and your family connections who are embedded in the healthcare system as administrators or physicians. Depending on your personal values, you might consider it good or bad that access to healthcare in Canada is priced in these units. What makes dollars unique is that if you inject more dollars into the free market for a good, then ceteris paribus, you will cause more of that good to be produced. Whereas if you injected more bureaucratic know-how into the Canadian patient population, you'd merely cause more intense competition for the same fixed number of physician-hours. That is: by repricing a good in non-dollar units, you've removed a lot of the flexibility that would have allowed your system to make more of the good if lots of people wanted it. There are situations when this might make sense to do, and there are legitimate debates to be had around it. But this is the tradeoff you're making when you ration. People often mistakenly think that if the price of a good is opaque, then the good must not have a price. This is incorrect. What's more, if you believe it, then you're almost certainly getting over-charged. And very unfortunately, this mistake tends to be most common among less sophisticated folks — who are the very folks that rationing was intended to protect in the first place. [1] And unfortunately, real human-managed bureaucracies are not reliably pure random lotteries, even when they are supposed to literally be pure random lotteries. See, e.g., https://en.wikipedia.org/wiki/1980_Pennsylvania_Lottery_scandal https://en.wikipedia.org/wiki/1980_Pennsylvania_Lottery_scan... [2] More accurately, big subsets of our healthcare system operates under single-payer. Many services like eye doctors, dentists, etc. are private.
- Pet_Ant 5y ago
  > you've removed a lot of the flexibility that would have allowed your system to make more of the good if lots of people wanted it Only if they were capable of paying for it as well. That is a big assumption for something as expensive as healthcare. I personally find it very comforting that (at least at in principle) both the rich and poor wait in the same line.

kiba 5y ago

Only 160 residents can live there, which only helps a small amount of people.

nanis 5y ago

> Is rationing ... bad? Yes. When a good or service is always available to anyone who can pay the price, all one needs to do is find the money and one can get it. When prices are set artificially low, both current and long term go down which results in perpetual shortages. Since getting the thing now depends not just on being able to come up with the cash, but relies on the pen of a bureaucrat, corruption seeps in and becomes endemic. This charity is able to get it done by requiring adherence to a specific religion which serves both as a selection and an enforcement mechanism. If one is tempted to think of generalizing this, I would recommend reading about both Western socialists waxing poetic about USSR's "solutions" to housing shortages and the reality of housing in the Soviet Union. Unfortunately, city & urban planning programs as well as architecture schools tend to produce a lot of credentialed people who parrot the former.

jorvi 5y ago
> Yes. When a good or service is always available to anyone who can pay the price, all one needs to do is find the money and one can get it. This sounds nice but breaks down because shelter is a human need, it is not a new iPhone. I am aware that the solution to housing crises is build build build, and that the more profit is in developing housing the more there is being built, but pretending a place to live is like any other common good is cold and wrong.
- luckylion 5y ago
  > pretending a place to live is like any other common good is cold and wrong. Does it help if you pretend that it's not? Do you get more investments into housing, and in the end, more houses, if you consider housing different from other markets?
  - jorvi 5y ago
    I am not pretending anything, I am merely pointing out that shelter, like food an water, is a basic human right (although judging by HNs donwvotes, they'd be fine with starving and dehydrating people as long as someone is making a massive profit).
    - luckylion 5y ago
      I think many here disagree with you about it being a human right, because unlike the earlier human rights, it's not "leave people be" at its core, it's "you have to do X for people". If anything, it's a human entitlement, but that doesn't have the same ring to it, I suppose. And then there's the next part: how good and how much? What's the housing that everyone supposedly has a right to? 100sqft? 500? 1000? And of what quality, and where? Do they get to choose the location?
      - guerrilla 5y ago
        > If anything, it's a human entitlement, but that doesn't have the same ring to it, I suppose. This is nonsense you just made up. Positive and negative rights are both rights, as is common understood in English but especially as defined within political science and philosophy. [1] 1. https://en.wikipedia.org/wiki/Negative_and_positive_rights https://en.wikipedia.org/wiki/Negative_and_positive_rights
        luckylion 5y ago
        Yes, and positive rights in that context are entitlements. With a right to be housed, you're entitled to a house/apartment/shelter.
iSnow 5y ago
But housing doesn't work like this at all. "all one needs to do is find the money" is the mechanism that keeps some people out of the housing market, or at least makes their lives pretty hard. Middle-class families can find the money, but the poor do not and usually cannot (for whatever reasons) raise their value on the job market enough. A case can be made for rationed housing at extremely low prices. If you let anyone in, you would get a cash-flow problem and distort the market, but not if you limit it to the poor.
- nanis 5y ago
  > But housing doesn't work like this at all. The incentives and the price mechanism is independent of the desire of some people to think this or that good/service is "special".
eesmith 5y ago
You presume infinite resources. https://en.wikipedia.org/wiki/The_Wave_(Arizona) https://en.wikipedia.org/wiki/The_Wave_(Arizona) has a rationing system. > Due to the fragile nature of the formation and the large number of people wishing to visit it, a daily lottery system is used to dispense only ten next-day permits in person at the Kanab visitor center. Additionally, ten online permits for each date are available four months in advance of a planned trip. There will be a perpetual shortage. This is not a bad thing ... unless you don't care about preserving things for the future. Do you still think rationing is bad? Or is my example not a case of rationing? Bavaria is majority Catholic. "Demonstrate financial need" is likely a much stronger selection mechanism. You didn't answer my question about why, if there's a wait list for this place, and since it's proven to be economically sustainable, other housing isn't built along these lines. > corruption seeps in and becomes endemic After 500 years, is the Fuggerei endowment fund corrupt? Corruption can seep in whenever the person making the decision isn't the person making the profit. Even in a free market.
- sokoloff 5y ago
  It’s not obvious to me that this is economically self-sustaining, that is to say it could be recreated starting from scratch today (without the initial grant from the Fuggers).
- gruez 5y ago
  >Bavaria is majority Catholic. "Demonstrate financial need" is likely a much stronger selection mechanism. According to wikipedia bavaria is only 49.6% catholic. I'm not sure how excluding more than half the population on the basis of religion can be justified. https://en.wikipedia.org/wiki/Bavaria#Demographics https://en.wikipedia.org/wiki/Bavaria#Demographics
  - Moru 5y ago
    German Catholic is pretty strong still. Church runs a lot of hospitals and kid/youth things, daycare and so on. They require Catholic employees, they frown upon non married couples and so on.
  - 5y ago

brixon 5y ago

Since this is not a public service, then no rationing is not bad. In the US, a lot of the homeless shelter are faith based and each only have so many beds to go around each night. There are not more since someone has to put up the money for the investments. And entrance fees would not likely work for anything new and not novel. Only the government can spend more than it makes.

asdfasgasdgasdg 5y ago
I don't think you would be permitted to have a faith-based test for entry into a homeless shelter in the US, though, even if the shelter were faith based. I'm not a lawyer but I've seen enough fair housing act noticed when buying, selling, and renting housing.
- merpnderp 5y ago
  Interesting, but since no money is changing hands I wonder if there are exceptions. I mean I can see some people preferring people sleep on the streets than see a faith-based test allowed to exist, but surely those people's irrationality doesn't prevail?
  - asdfasgasdgasdg 5y ago
    I mean, you could ask the same question for a race-based test, and come to the same basic conclusion: that it is "irrational" to prevent it. I think you have to leave look a little deeper to reach a correct conclusion. Namely: I don't think significantly more free housing would in fact be offered without these regulations. So it would not be rational to allow this type of discrimination. The regulation in essence provides an anchor "price" for free housing, while not distorting the "market" very much. This is a good type of regulation to have.
    - merpnderp 5y ago
      You are confusing housing with homeless shelters.

edouard-harris 5y ago

> Is rationing ... bad? Economics 101 often fails to convey the crucial fact about rationing: under any rationing system that isn't a pure random lottery, the only effect of rationing a good is to change the currency in which that good is priced. [1] For example, I live in Canada. Our healthcare system is single-payer [2], which is isomorphic to saying that it is rationed. So it would not be accurate to say that your access to healthcare in Canada is priced in dollars. But it would be accurate to say that your access to healthcare in Canada is priced in your ability to navigate bureaucracy, the flexibility of your working hours (to snag last-minute appointments), and your family connections who are embedded in the healthcare system as administrators or physicians. Depending on your personal values, you might consider it good or bad that access to healthcare in Canada is priced in these units. What makes dollars unique is that if you inject more dollars into the free market for a good, then ceteris paribus, you will cause more of that good to be produced. Whereas if you injected more bureaucratic know-how into the Canadian patient population, you'd merely cause more intense competition for the same fixed number of physician-hours. That is: by repricing a good in non-dollar units, you've removed a lot of the flexibility that would have allowed your system to make more of the good if lots of people wanted it. There are situations when this might make sense to do, and there are legitimate debates to be had around it. But this is the tradeoff you're making when you ration. People often mistakenly think that if the price of a good is opaque, then the good must not have a price. This is incorrect. What's more, if you believe it, then you're almost certainly getting over-charged. And very unfortunately, this mistake tends to be most common among less sophisticated folks — who are the very folks that rationing was intended to protect in the first place. [1] And unfortunately, real human-managed bureaucracies are not reliably pure random lotteries, even when they are supposed to literally be pure random lotteries. See, e.g., https://en.wikipedia.org/wiki/1980_Pennsylvania_Lottery_scandal https://en.wikipedia.org/wiki/1980_Pennsylvania_Lottery_scan... [2] More accurately, big subsets of our healthcare system operates under single-payer. Many services like eye doctors, dentists, etc. are private.

Pet_Ant 5y ago
> you've removed a lot of the flexibility that would have allowed your system to make more of the good if lots of people wanted it Only if they were capable of paying for it as well. That is a big assumption for something as expensive as healthcare. I personally find it very comforting that (at least at in principle) both the rich and poor wait in the same line.