4 ms·

Is it safe to suspect that home prices, in CA, are going to sit 20% higher than they would, otherwise?

by nomel 4y ago

SketchySeaBeast 4y ago
20% + whatever 5% over 30 years (37%?) works out to be.
hgsgm 4y ago
Perhaps higher because some people already could afford part of a down payment, but yeah. Can't pass rent control, but can pass giveaways to landlords.
- arcticbull 4y ago
  > Can't pass rent control, but can pass giveaways to landlords. Rent controls do nothing to make houses more affordable at the limit, since prices reset to market any time someone leaves. They just make the market less efficient. Only adding more houses makes houses cheaper. Tons of the world's least affordable markets are already rent controled. Rent controled apartments in SF aren't cheaper. Neither are ones in Ontario. I can't really find any evidence they work at all. [edit] Here's a study I found on the effects of rent control in SF. > Leveraging new data tracking individuals’ migration, we find rent control limits renters’ mobility by 20 percent and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15 percent by selling to owner-occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law. [1] [1] https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20181289 https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20181289
  - guepe 4y ago
    Montreal has like 30 or 40 years of rent control. The downside is landlords don't invest in renovations. It does make montreal the most affordable large city of NA. So in theory I'm sure you are right, in practice it's not what is observed.
arcticbull 4y ago
Not exactly, because it only helps them make their down payment. The magnitude of their loan continues to be primarily defined by their income, which this program does not change. But yes, it will make houses more expensive. Not 20%, but some quantity by increasing the pool of competitors for the same fixed supply.
yamtaddle 4y ago
Nah, the program had a fixed budget and it's already used up. So, some amount higher, maybe, but not 20%.
dragonwriter 4y ago
> Is it safe to suspect that home prices, in CA, are going to sit 20% higher than they would, otherwise? No, because its not available to all buyers, its income-limited, and funding limited.

Is it safe to suspect that home prices, in CA, are going to sit 20% higher than they would, otherwise?

by nomel 4y ago

Is it safe to suspect that home prices, in CA, are going to sit 20% higher than they would, otherwise?

SketchySeaBeast 4y ago

20% + whatever 5% over 30 years (37%?) works out to be.

hgsgm 4y ago

Perhaps higher because some people already could afford part of a down payment, but yeah. Can't pass rent control, but can pass giveaways to landlords.

arcticbull 4y ago
> Can't pass rent control, but can pass giveaways to landlords. Rent controls do nothing to make houses more affordable at the limit, since prices reset to market any time someone leaves. They just make the market less efficient. Only adding more houses makes houses cheaper. Tons of the world's least affordable markets are already rent controled. Rent controled apartments in SF aren't cheaper. Neither are ones in Ontario. I can't really find any evidence they work at all. [edit] Here's a study I found on the effects of rent control in SF. > Leveraging new data tracking individuals’ migration, we find rent control limits renters’ mobility by 20 percent and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15 percent by selling to owner-occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law. [1] [1] https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20181289 https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20181289
- guepe 4y ago
  Montreal has like 30 or 40 years of rent control. The downside is landlords don't invest in renovations. It does make montreal the most affordable large city of NA. So in theory I'm sure you are right, in practice it's not what is observed.

arcticbull 4y ago

Not exactly, because it only helps them make their down payment. The magnitude of their loan continues to be primarily defined by their income, which this program does not change. But yes, it will make houses more expensive. Not 20%, but some quantity by increasing the pool of competitors for the same fixed supply.

yamtaddle 4y ago

Nah, the program had a fixed budget and it's already used up. So, some amount higher, maybe, but not 20%.

dragonwriter 4y ago

> Is it safe to suspect that home prices, in CA, are going to sit 20% higher than they would, otherwise? No, because its not available to all buyers, its income-limited, and funding limited.