7 ms·

I'm not sure if increasing supply by pricing people out of their homes is the better alternative. Real world free markets consistently fail to reflect the cost

I'm not sure if increasing supply by pricing people out of their homes is the better alternative. Real world free markets consistently fail to reflect the cost of externalities such as the effect of only rich people being able to afford housing in a wide area.

faeriechangling 4y ago
If you want to ensure people are never priced out of housing, it's possible to guarantee this. You just build a home for every person, and beggars can't be choosers in terms of location, quality of accommodations, roommates, or size. Homelessness will still exist if you do this, as people will simply refuse to live in such places, even if you force them to USSR style, but it's about the only workable approach I'm aware of. Mass scale social housing. If housing isn't connected to price to begin with, you can hardly be priced out of it now can you? Rent controlling privately owned real estate does not work and has never worked. It literally just doesn't do what is claimed. It mostly repeatedly crops up generally because of how politics is structured means long term residents have a lot of clout to propose policies that benefit themselves while spinning BS about how rent control ends homelessness. If you want the right to live in a specific area with specific amenities, well you can't always get what you want. The reality of resource scarcity and power differentials always crops up somewhere.
- FullyFunctional 4y ago
  We don't speak of down-votes here, but I'm fascinated by why this was down voted. Do people find anything false in the above? Do NH people actual believe in rent control? I personally know people who kept (or keeps?) a rent controlled apartment they don't need or barely use, because it's so cheap to keep it. Seems like a good example of unintended consequences. There's a lot of vilifying of landlords here. I was a landlord for a while because I wasn't ready to move. That got me my two first and only legal cases (one settled, one won but never collected $10k owed because the con artist skipped country). The insane level of stress got me out of that and I was lucky because only months later, all landlords got left holding the bag with the covid non-eviction mandate which meant renters could just stop paying rent. I'll never ever rent anything out again.
  - tomcam 4y ago
    Just spitballing here, but I have a sneaking suspicion that no one favoring rent control has ever dealt with renters.
hedora 4y ago
Price controls prevent rents from reflecting the cost of building new housing. Therefore, building new housing is irrational. If people could build a house to rent out at a reasonable profit (and if the planning commission let them do so), then they'd build new housing. It's not like there's a capital shortage in NYC or SF, or new houses are some magic unproven technology. The increased supply of modern units would create a downward pressure on old unit pricing, and therefore the rents paid by blue collar workers. This would decrease the price of construction to something vaguely approaching national norms. Rent control (and, at least in California, insane codes) breaks this loop, so we have a situation where there is a shortage of housing, housing is completely unaffordable, and building new housing is unprofitable. (Also, the cost of construction has been completely decoupled from the price of materials. In most places, material costs are most of the budget!)
- zuminator 4y ago
  Can't speak for California but new construction in NYC is NOT genereally rent stabilized. It is rented at market rates, unless the landlord voluntarily chooses to place some of their apartments under rent stabilization in exchange for very generous tax breaks. A friend of mine recently moved into rent-stabilized new construction that she obtained a lease to after winning a housing lottery. The entire development has approximately 1100 units of which just under a third were offered with rent stabilized leases. She pays about $2100 for a 1 br and the equivalent market rate units are around $1000 more. There's quite a bit of ongoing new rental construction in her area, so there's profit to be made.
hackerlight 4y ago
Why would you reach for literally the worst tool in your arsenal (price controls) with the most negative and harmful side effects to fix this problem?

faeriechangling 4y ago

If you want to ensure people are never priced out of housing, it's possible to guarantee this. You just build a home for every person, and beggars can't be choosers in terms of location, quality of accommodations, roommates, or size. Homelessness will still exist if you do this, as people will simply refuse to live in such places, even if you force them to USSR style, but it's about the only workable approach I'm aware of. Mass scale social housing. If housing isn't connected to price to begin with, you can hardly be priced out of it now can you? Rent controlling privately owned real estate does not work and has never worked. It literally just doesn't do what is claimed. It mostly repeatedly crops up generally because of how politics is structured means long term residents have a lot of clout to propose policies that benefit themselves while spinning BS about how rent control ends homelessness. If you want the right to live in a specific area with specific amenities, well you can't always get what you want. The reality of resource scarcity and power differentials always crops up somewhere.

FullyFunctional 4y ago
We don't speak of down-votes here, but I'm fascinated by why this was down voted. Do people find anything false in the above? Do NH people actual believe in rent control? I personally know people who kept (or keeps?) a rent controlled apartment they don't need or barely use, because it's so cheap to keep it. Seems like a good example of unintended consequences. There's a lot of vilifying of landlords here. I was a landlord for a while because I wasn't ready to move. That got me my two first and only legal cases (one settled, one won but never collected $10k owed because the con artist skipped country). The insane level of stress got me out of that and I was lucky because only months later, all landlords got left holding the bag with the covid non-eviction mandate which meant renters could just stop paying rent. I'll never ever rent anything out again.
- tomcam 4y ago
  Just spitballing here, but I have a sneaking suspicion that no one favoring rent control has ever dealt with renters.

hedora 4y ago

Price controls prevent rents from reflecting the cost of building new housing. Therefore, building new housing is irrational. If people could build a house to rent out at a reasonable profit (and if the planning commission let them do so), then they'd build new housing. It's not like there's a capital shortage in NYC or SF, or new houses are some magic unproven technology. The increased supply of modern units would create a downward pressure on old unit pricing, and therefore the rents paid by blue collar workers. This would decrease the price of construction to something vaguely approaching national norms. Rent control (and, at least in California, insane codes) breaks this loop, so we have a situation where there is a shortage of housing, housing is completely unaffordable, and building new housing is unprofitable. (Also, the cost of construction has been completely decoupled from the price of materials. In most places, material costs are most of the budget!)

zuminator 4y ago
Can't speak for California but new construction in NYC is NOT genereally rent stabilized. It is rented at market rates, unless the landlord voluntarily chooses to place some of their apartments under rent stabilization in exchange for very generous tax breaks. A friend of mine recently moved into rent-stabilized new construction that she obtained a lease to after winning a housing lottery. The entire development has approximately 1100 units of which just under a third were offered with rent stabilized leases. She pays about $2100 for a 1 br and the equivalent market rate units are around $1000 more. There's quite a bit of ongoing new rental construction in her area, so there's profit to be made.

hackerlight 4y ago

Why would you reach for literally the worst tool in your arsenal (price controls) with the most negative and harmful side effects to fix this problem?