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>Rent control, as flawed as it may be, aims to solve a real socioeconomic problem: that I was here first. FTFY. It really boils down to that. Is it a hardship?

by scoofy 3y ago

>Rent control, as flawed as it may be, aims to solve a real socioeconomic problem: that I was here first. FTFY. It really boils down to that. Is it a hardship? Sure, but really insidious way that rent controls hurt society is stealing from future generations to benefit folks in the present who already are being given a sweet heart deal. It does so by creating incentives to block any redevelopment. The problem with rent control is that, where it is in effect, it is the primary cause of the exact problem it is trying to solve (but only for incumbents). If we really cared about people's stability, we could simply create a system where maximum rent increases are limited, but the percentage increase goes up every year. E.g. max rent increase year 1: 1%. Year 2: 2%. Year 3: 4%, Year 4: 8%... etc. If the rent ever doesn't double, the percentage increases start over. You get prevention against wild changes in rent, and you've got about a decade before seeing potentially dramatic rent increases, but rents can still get back to market levels given enough time.

emmacharp 3y ago
Maximum rates of increase per year is a type of rent control. It is, where I live, based on inflation, tax increases and investment in the building. And you may have "fixed that for me" by rephrasing what I said but you also did not address what I had brought up before you fixed it up. Do you think people being driven out of their homes and neighbourhoods by rapidly increasing housing costs a problem? If so, we can discuss about the means to mitigate it. If not, I guess we'll have to agree to disagree.
- scoofy 3y ago
  > Maximum rates of increase per year is a type of rent control. It is, where I live, based on inflation, tax increases and investment in the building. Where I live, we would call laws that allow rents to return to market-rate eventually "rent-stabilization," and laws that keep below market rates indefinitely "rent controls." I think in most of the examples we are talking about, especially in the case of Sweden, we are talking about the latter. >Do you think people being driven out of their homes and neighbourhoods by rapidly increasing housing costs a problem? They aren't being driven out of "their homes." They hold a lease to temporarily occupy a residence that is the property of someone else. Nobody likes to frame it this way, but it's what's actually happening. I want to keep people in the cities they want to live in, but not just for this generation. If we want to let people live in cities they want to live in (even people who already live there), we need to just supply the amount of housing to bring the cost down... which is doing exactly the opposite of "protecting" people in their current housing by locking it down in perpetuity. Rent-control makes perfect sense for people who receive it. When viewed through Rawls' veil of ignorance, it is obviously, wildly unjust. If we want to deal with inequality in housing, we need to deal with the monetary inequality, and not create a band-aid, like rent-control, that actively makes the problem worse in the long run. I think the main reason why rent-control is used is that people don't want their city to change, but they don't want it to become more expensive. Rent-control allows people to have their cake, and eat it too. It just comes at the price of creating a type of informal aristocracy.
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  - omnimus 3y ago
    > They hold a lease to temporarily occupy a residence that is the property of someone else. Nobody likes to frame it this way, but it's what's actually happening. > Rent-control allows people to have their cake, and eat it too. It just comes at the price of creating a type of informal aristocracy. So somebody who inherited property which their grandparent bought 40 years ago (for super cheap) and never had to worry about anything because of that is OK. But laws that try to limit speculation and exploitation of people who were not so lucky… that is creating informal aristocracy. Sorry to break it to you but the aristocracies are already in place and rent control is one of ways how societies try to tackle them. I personaly dont think rent control is very effective one but somebody is atleast trying to do something.
    - emmacharp 3y ago
      Well said.
    - scoofy 3y ago
      I'm not here to argue "capitalism good" ... I'm here to argue that indefinite rent-control is not only an ineffective solution at solving the very problem it intends to solve (it makes it worst), but it also morally objectionable from a Rawlsian perspective. As I said before: >If we want to deal with inequality in housing, we need to deal with the monetary inequality So when you say things like: >So somebody who inherited property which their grandparent bought 40 years ago (for super cheap) and never had to worry about anything because of that is OK. I'm confused, because the issue of property ownership and inheritance is it's own issue. Trying to solve the property ownership problem with a make-shift scheme like perpetual rent control, again, makes things worse. This problem is notable, and particularly tricky, because the soviet union (urban russia, afaik), had housing problems very similar to the ones of Stockholm on account of the fact that it was politically unpopular to redevelop city centers to increase housing capacity, and instead you get large undesirable housing blocs on the outer edges of cities, simply because all the incumbents wanted to keep their valuable properties, even though they weren't technically owned. The problem of unaffordable housing is solved by creating and incentivizing oversupply.

emmacharp 3y ago
My question still lingers: since housing prices as they are now disincentivize building because of poor profit opportunities, how can removing rent control spell more profit opportunities for private interests without increasing price? If prices stay somewhat the same without rent control, where is the incentive to build more housing?
- scoofy 3y ago
  >since housing prices as they are now disincentivize building because of poor profit opportunities I'm confused by this. Housing prices are high, exactly because it's effectively impossible to build housing in the most expensive cities. Building housing in these cities is extremely profitable, it's just difficult, if not impossible, to build. 627 days, just for the permit: This data shows the staggering timeline to build homes in S.F.: https://www.sfchronicle.com/sf/article/housing-permits-san-francisco-17652633.php https://www.sfchronicle.com/sf/article/housing-permits-san-f... >The typical applicant currently waits a staggering 627 calendar days before obtaining a full building permit from the city to construct a multifamily housing project, and 861 days before gaining the same approval for a single-family residence, the analysis found. This has little to do with poor profit opportunities insofar as housing is concerned, and everything to do with incumbents (both home-owners and rent-controlled renter) explicitly trying to thwart new construction wherever possible. Home-owners want shortages to protect their property values. Rent-controlled renters want to block development because it might incentivize their landlords to redevelop the property they live in (this is specific to California laws). >how can removing rent control spell more profit opportunities for private interests without increasing price? >If prices stay somewhat the same without rent control, where is the incentive to build more housing? The answer is volume. If I have one unit that rents for $4000/month, but I redevelop to create 3 units that rent at $3000/month, I effectively increase my profits by $5000/month, while lowering local rents by $1000/month. Everybody wins. Now, if someone has rent-control at $1000/month, then I'm not going to argue that their rent isn't going to go up. It will, but it should. Because someone somehow living at a price that is artificially $3000/month cheaper than their neighbors is obviously unjust, I see little reason to preserve this inequality beyond political practicalities. Were these volume discounts don't exist, rent-controls are generally benign, however, as discussed before, they won't be benign for long, because the cause a lack of development, which will create a shortage over time. I obviously think these systems are entrenched, and should be phased out. I don't think that rent controls should be preserved indefinitely, but even if we were to completely change the system tomorrow, I understand that people have built their lives around these inequalities, and should have 5-10 years (minimum) for these inequalities to be eliminated.
  - emmacharp 3y ago
    So yes, prices will go up, displacing people. You don't need to have 2000$ more in rent per month to be driven out of your neighbourhood. 200$ may be enough. And then, if gentrification, immigration, tourism or any other external "shock" brings new, richer or more desperate demand for housing, landlords can raise prices as high as they can go, making housing precarious for lots of people. As per your comment, I'd say zoning laws and NIMBY are bigger fruits hanging lower than rent stabilization.
    - scoofy 3y ago
      If you are willing to maintain laws that perpetuate artificial shortages and therefore high rents, and the decades long wait lists that this type of policy creates, and tens of thousands of lives, if not hundreds of thousands of lives that this will make worse in every city, all to prevent people who have been living at far below market rates, likely for decades, then I would say we have a different moral calculus. I see robust public housing as only sustainable solution for people getting priced out of a neighborhood. >As per your comment, I'd say zoning laws and NIMBY are bigger fruits hanging lower than rent stabilization. Again, I support some form of stabilization, but my entire point is that the NIMBY policies are, in large part, caused by the policy of rent-control itself. I could go into how 'golden handcuffs' cause this, but I feel like I've talked your ear off too much already. You obviously care a lot about this, I only wish I could communicate my complicated position better.
      - emmacharp 3y ago
        In the end, I think we agree more than we disagree. Heheh. I also think that rent control that fix a price without any way to increase it are harmful. I'm definitely not willing to maintain any of these. Not sure about rent control and NIMBY, though. Property owners, be it condos or houses, are pretty much also in thrall of this pernicious mind disease. And yes, I do care a lot about this. Did it show? Heheh. I think we made great strides here and thank you for your time and patience. PS: my ears can take a lot, don't worry!

dalke 3y ago
Repeating myself, you do not know what aristocracy means. In late Middle Ages England, I could be a copyhold tenant to the mesne lord, with the copyhold passed on by inheritance to my heir, following the traditional inheritance scheme of the manor. I do not own the land - the mesne lord does. Yet I have the right to live there, and the right to pass on that right through inheritance. According to you, that makes me - a copyholder - part of the aristocracy?! No. That's an absurd re-definition. You may want the equivalent of new enclosure laws so that complicated traditional land use practices which give a peasant the inheritable right to graze a few sheep in the local commons is replaced by the simple exclusive control of a local lord. That's how lords and capital holders traditionally gain more power and control. That still doesn't mean it's meaningful to say those peasants were part of the aristocracy. You grew up in a culture which prioritizes a certain view of land ownership that dates back the feudal system, then over time the local lords gained strong control over the land and government, followed by the imperial era where land possession and exclusive control brought in untold riches. You and I come from an ex-colony of that imperial system, which respected private land and exclusive ownership only when it involved certain people - for others it could be taken by force. "A man's home is his castle" was only valid for rich white men, and those with implied fealty to rich white men (aka "real Americans"). Sweden never had a feudal system, nor (despite being a kingdom) a strong form of aristocracy. Socialism has a much stronger history here than in the US. Its traditions are therefore different. Don't try to interpret it all through what appears to be an understanding of 19th century English aristocracy. And even if I'm completely wrong, who care? Inheritable land ownership and nepotistic transfer of corporate ownership lead to extreme centralizations of power which cannot be matched by a Swedish rental agreement. The Wallenberg family controls a substantial fraction of the Swedish economy. A first-hand rental contract had limited use of about 80 square meters.