3 ms·

The 1950s were a good time to be a white American pretty much anywhere, not just New York City. So it’s definitely more complicated than that lol

phmqk76 3y ago
That’s a bit of a non sequitur, isn’t it? NYC was confronted with a problem of rapidly rising rents, and instead of handwringing and eliminating zoning and engineering huge tax breaks, they enacted rent control. Why don’t we have the courage to act?
- tptacek 3y ago
  NYC is one of the epicenters of the housing crisis. Rent control doesn't make new housing, builders do, and zoning keeps them from doing it. You can advocate for rent control once the housing gets built.
  - phmqk76 3y ago
    You can’t, though. The price you seek to rent the units for dictates your profit margins, which impacts the financing sought. If you’re taking out a 10% construction loan and are building into your business plan $3,000 a month for your two bedroom, you can’t turn around and rent it out for $1,000 a month because city ordinances say so after the fact. That’s why rent control needs to happen now, and then a public finance corporation needs to be established to provide financing to build new units if the market won’t. It’s not rocket science, it’s just not politically expedient, so it’s not talked about.
    - OrwellianChild 3y ago
      I sympathize with the desire for a utopian government-run housing arrangement like this, but I think it discards the practical for the ideal... With less restrictive zoning, more properties and building projects become financially feasible with the banks, builders, and contractors we already have. It costs the government zero money and happens automatically with the stroke of a pen. It's much more difficult to re-engineer our entire mode of government, taxation, and housing provision than simply removing a few legal restrictions.
      - phmqk76 3y ago
        We don’t need government run housing arrangements. What we need are market regulations, like rent control, that work. Having the government as an available lender, to ensure capital access for developers, isn’t control, it’s working the levers of capitalism to encourage an outcome. Look at Texas - zoning-free, no rent control, and it’s quickly becoming a housing dystopia. Prices are rising rapidly, and as you build out so quickly, your taxes rise as a clip more than twice most places, to build new schools and hire teachers and build roads, etc. and guess what? Private equity firms are snapping up homes at a huge clip, 25% nationally and much higher in Texas, and then rent them out according to algorithms that maximize their profits (in collusion with other landlords using the same software). Why build a Rube Goldberg machine to impact housing prices though the elimination of zoning, when you can affect it directly through rent control and directly incentivizing new construction of cheap units?
    - tptacek 3y ago
      I think you missed my subtext, which is that rent control followed New York City into its current housing crisis. But, I will add "complete public financing for virtually all new housing" to the list of interesting ideas people have for solving housing scarcity, along with "plant based diets" and "moving everyone to federal grazing land in rural Oregon".
      - phmqk76 3y ago
        You’re misunderstanding my point, and your history is off. Rent control did not follow NYC to its housing crisis, NYC went through an extremely dark period of underinvestment and crime from the 1970s to the early 1990s, independent of housing. And in fact, during that time, we went from 2 million rent controlled units to 22,000 today. And I never proposed “complete public financing for virtually all new housing,” that is a bad faith way of debating me, to put words in my mouth. I said the government should be an available lender to ensure to incentivize the building of new units, and to encourage private investment. Which exists right now with governmental companies like NYC HPD. If you had any domain expertise at all, you’d know that, instead of making strawman arguments.
- thatswrong0 3y ago
  > That’s a bit of a non sequitur, isn’t it? That was kind of my point. The burgeoning middle class had nothing to do with rent control laws. Anyways, most of the research I'm finding contradicts your assertions. For example, a recent paper [0] about on the housing market in Helsinki found that "new market-rate construction loosens the housing market in middle- and low-income areas even in the short run". About restrictive zoning _not_ being an issue, a graph from a paper [1] illustrates that Los Angeles is at 92% of its zoned capacity when it had a planned capacity in the 1960s that was more than double what its current actual capacity is. From the paper: "Areas with well-organized homeowner groups dramatically decreased density as a means of controlling population growth, thus directing the future growth of L.A. to predominately low-income, minority communities - communities least able to accommodate that growth due to overcrowded housing, under-performing schools, limited park space and, in many cases, poor transit access. In short, density was directed to the path of least political resistance, a social injustice that exacerbated spatial disparities between communities." The paper asserts that, beyond the racial disparities caused, restrictive zoning has caused rent to become unaffordable and has had a negative environmental impact. On the topic of rent control generally, one paper [2] estimates that NYC rent controls caused a 20% misallocation of rental units. Another [3] about rent controls in SF found "that landlords whose properties were exogenously covered by rent control reduced their supply of available rental housing by 15%, by either converting to condos/TICs, selling to owner occupied, or redeveloping buildings. This led to a city-wide rent increase of 5.1% and caused $2.9 billion of total loss to renters." And this general survey [4] found "that economic research quite consistently and predominantly frowns on rent control. [The] findings cover both theoretical and empirical research on many dimensions of the issue, including housing availability, maintenance and housing quality, rental rates, political and administrative costs, and redistribution." In short, “the economics profession has reached a rare consensus: Rent control creates many more problems than it solves.” [0] https://ideas.repec.org/p/fer/wpaper/146.html https://ideas.repec.org/p/fer/wpaper/146.html [1] https://i.imgur.com/EIyespr.png https://i.imgur.com/EIyespr.png from https://escholarship.org/uc/item/6k64g20f#page-1 https://escholarship.org/uc/item/6k64g20f#page-1 [2] https://users.nber.org/~luttmer/rentcontrol.pdf https://users.nber.org/~luttmer/rentcontrol.pdf [3] https://econpapers.repec.org/paper/redsed018/918.htm https://econpapers.repec.org/paper/redsed018/918.htm [4] https://econjwatch.org/File+download/238/2009-01-jenkins-reach_concl.pdf?mimetype=pdf https://econjwatch.org/File+download/238/2009-01-jenkins-rea...

phmqk76 3y ago

That’s a bit of a non sequitur, isn’t it? NYC was confronted with a problem of rapidly rising rents, and instead of handwringing and eliminating zoning and engineering huge tax breaks, they enacted rent control. Why don’t we have the courage to act?

tptacek 3y ago
NYC is one of the epicenters of the housing crisis. Rent control doesn't make new housing, builders do, and zoning keeps them from doing it. You can advocate for rent control once the housing gets built.
- phmqk76 3y ago
  You can’t, though. The price you seek to rent the units for dictates your profit margins, which impacts the financing sought. If you’re taking out a 10% construction loan and are building into your business plan $3,000 a month for your two bedroom, you can’t turn around and rent it out for $1,000 a month because city ordinances say so after the fact. That’s why rent control needs to happen now, and then a public finance corporation needs to be established to provide financing to build new units if the market won’t. It’s not rocket science, it’s just not politically expedient, so it’s not talked about.
  - OrwellianChild 3y ago
    I sympathize with the desire for a utopian government-run housing arrangement like this, but I think it discards the practical for the ideal... With less restrictive zoning, more properties and building projects become financially feasible with the banks, builders, and contractors we already have. It costs the government zero money and happens automatically with the stroke of a pen. It's much more difficult to re-engineer our entire mode of government, taxation, and housing provision than simply removing a few legal restrictions.
    - phmqk76 3y ago
      We don’t need government run housing arrangements. What we need are market regulations, like rent control, that work. Having the government as an available lender, to ensure capital access for developers, isn’t control, it’s working the levers of capitalism to encourage an outcome. Look at Texas - zoning-free, no rent control, and it’s quickly becoming a housing dystopia. Prices are rising rapidly, and as you build out so quickly, your taxes rise as a clip more than twice most places, to build new schools and hire teachers and build roads, etc. and guess what? Private equity firms are snapping up homes at a huge clip, 25% nationally and much higher in Texas, and then rent them out according to algorithms that maximize their profits (in collusion with other landlords using the same software). Why build a Rube Goldberg machine to impact housing prices though the elimination of zoning, when you can affect it directly through rent control and directly incentivizing new construction of cheap units?
  - tptacek 3y ago
    I think you missed my subtext, which is that rent control followed New York City into its current housing crisis. But, I will add "complete public financing for virtually all new housing" to the list of interesting ideas people have for solving housing scarcity, along with "plant based diets" and "moving everyone to federal grazing land in rural Oregon".
    - phmqk76 3y ago
      You’re misunderstanding my point, and your history is off. Rent control did not follow NYC to its housing crisis, NYC went through an extremely dark period of underinvestment and crime from the 1970s to the early 1990s, independent of housing. And in fact, during that time, we went from 2 million rent controlled units to 22,000 today. And I never proposed “complete public financing for virtually all new housing,” that is a bad faith way of debating me, to put words in my mouth. I said the government should be an available lender to ensure to incentivize the building of new units, and to encourage private investment. Which exists right now with governmental companies like NYC HPD. If you had any domain expertise at all, you’d know that, instead of making strawman arguments.
thatswrong0 3y ago
> That’s a bit of a non sequitur, isn’t it? That was kind of my point. The burgeoning middle class had nothing to do with rent control laws. Anyways, most of the research I'm finding contradicts your assertions. For example, a recent paper [0] about on the housing market in Helsinki found that "new market-rate construction loosens the housing market in middle- and low-income areas even in the short run". About restrictive zoning _not_ being an issue, a graph from a paper [1] illustrates that Los Angeles is at 92% of its zoned capacity when it had a planned capacity in the 1960s that was more than double what its current actual capacity is. From the paper: "Areas with well-organized homeowner groups dramatically decreased density as a means of controlling population growth, thus directing the future growth of L.A. to predominately low-income, minority communities - communities least able to accommodate that growth due to overcrowded housing, under-performing schools, limited park space and, in many cases, poor transit access. In short, density was directed to the path of least political resistance, a social injustice that exacerbated spatial disparities between communities." The paper asserts that, beyond the racial disparities caused, restrictive zoning has caused rent to become unaffordable and has had a negative environmental impact. On the topic of rent control generally, one paper [2] estimates that NYC rent controls caused a 20% misallocation of rental units. Another [3] about rent controls in SF found "that landlords whose properties were exogenously covered by rent control reduced their supply of available rental housing by 15%, by either converting to condos/TICs, selling to owner occupied, or redeveloping buildings. This led to a city-wide rent increase of 5.1% and caused $2.9 billion of total loss to renters." And this general survey [4] found "that economic research quite consistently and predominantly frowns on rent control. [The] findings cover both theoretical and empirical research on many dimensions of the issue, including housing availability, maintenance and housing quality, rental rates, political and administrative costs, and redistribution." In short, “the economics profession has reached a rare consensus: Rent control creates many more problems than it solves.” [0] https://ideas.repec.org/p/fer/wpaper/146.html https://ideas.repec.org/p/fer/wpaper/146.html [1] https://i.imgur.com/EIyespr.png https://i.imgur.com/EIyespr.png from https://escholarship.org/uc/item/6k64g20f#page-1 https://escholarship.org/uc/item/6k64g20f#page-1 [2] https://users.nber.org/~luttmer/rentcontrol.pdf https://users.nber.org/~luttmer/rentcontrol.pdf [3] https://econpapers.repec.org/paper/redsed018/918.htm https://econpapers.repec.org/paper/redsed018/918.htm [4] https://econjwatch.org/File+download/238/2009-01-jenkins-reach_concl.pdf?mimetype=pdf https://econjwatch.org/File+download/238/2009-01-jenkins-rea...