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Because price caps cause shortages? Subsidies are just a scheme to funnel taxes to landlords: bad idea. If you want to avoid using price caps, then you gotta fl

Because price caps cause shortages? Subsidies are just a scheme to funnel taxes to landlords: bad idea. If you want to avoid using price caps, then you gotta flood the supply with cheep housing to crater the market instead. I think landowners are going to fight that even harder than landlords fight rent control.

samatman 3y ago
Because there's no such thing as a price cap. This applies to rent controls as much as it does to "gouging" laws. An imposed maximum price which is below the market-clearing rate just means that some of the cost has to be paid in a different way. With apartments this is often information, you have to be in the know to get a chance to rent. Sometimes it's just illegally charging the difference between the rent controlled price and the market price: if you won't pay it, someone else will. Or you get a second mini-landlord, someone rents at the artificially-low rate and subleases the apartment at market rate. For rent "stabilization", which is rent control lite, the cost is paid with friction (people who would move but can't because they're paying below market), scarcity, and (as a consequence of that scarcity) higher prices when the landlord is finally free to charge market rates. But you can't just defeat market pricing by fiat, it just doesn't work.
- Retric 3y ago
  The article makes it clear this isn’t about rent control. The concern is market manipulation via artificially reducing supply and similar tactics not the government picking a price. Collusion is far easier with housing because nobody can flood the market so you don’t need every participant to agree. In Seattle, for example, ProPublica found that 10 property managers oversaw 70% of all multifamily apartments in one neighborhood — and every single one used pricing software sold by RealPage. “Setting prices with an algorithm is no different from doing it over cigars and whiskey in a private club,”
- worik 3y ago
  > But you can't just defeat market pricing by fiat, it just doesn't work. True But there is still a lot city and national governments can do. "Rent control" should not mean simply "cap rents". It means having a richer set of criteria for allocation accommodation units than a market with price, and ability to pay

samatman 3y ago

Because there's no such thing as a price cap. This applies to rent controls as much as it does to "gouging" laws. An imposed maximum price which is below the market-clearing rate just means that some of the cost has to be paid in a different way. With apartments this is often information, you have to be in the know to get a chance to rent. Sometimes it's just illegally charging the difference between the rent controlled price and the market price: if you won't pay it, someone else will. Or you get a second mini-landlord, someone rents at the artificially-low rate and subleases the apartment at market rate. For rent "stabilization", which is rent control lite, the cost is paid with friction (people who would move but can't because they're paying below market), scarcity, and (as a consequence of that scarcity) higher prices when the landlord is finally free to charge market rates. But you can't just defeat market pricing by fiat, it just doesn't work.

Retric 3y ago
The article makes it clear this isn’t about rent control. The concern is market manipulation via artificially reducing supply and similar tactics not the government picking a price. Collusion is far easier with housing because nobody can flood the market so you don’t need every participant to agree. In Seattle, for example, ProPublica found that 10 property managers oversaw 70% of all multifamily apartments in one neighborhood — and every single one used pricing software sold by RealPage. “Setting prices with an algorithm is no different from doing it over cigars and whiskey in a private club,”
worik 3y ago
> But you can't just defeat market pricing by fiat, it just doesn't work. True But there is still a lot city and national governments can do. "Rent control" should not mean simply "cap rents". It means having a richer set of criteria for allocation accommodation units than a market with price, and ability to pay