7 ms·

> 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

by 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.

deleted 3y ago
[deleted]
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
I see. Thank you for the detailed comment. Let's say I accept your phrasing and naming of the problem & solution. Given that one big consequence of managed housing economics is depressed profits, how can "free market" supply increases lower housing costs? Won't profits suffer then? Reducing incentives to build? As I see it, and said in the original comment, for supply to increase, price cannot decrease. It can only increase for building to be more enticing than with rent stabilization/control. Not sure how this is beneficial to future generations.
- scoofy 3y ago
  People seem to think I'm arguing for "free markets" because I'm arguing against rent controls. I'm not. In fact, quite the opposite. I'm just recognizing that people respond to incentives, and we need the incentives to be aimed at lowering housing costs and not just "protecting" incumbents. The problem of unaffordable housing is solved by creating and incentivizing an artificial oversupply of housing. There are many ways to do this. Vienna, for example, did this with public housing. Econ nerds will argue for a land value tax. Houston, Texas, does it in the worst way possible... by creating an unsustainable sprawling mess that will collapse in exactly the way that Strong Towns predicts. >how can "free market" supply increases lower housing costs? Ultimately, if we eliminate the political/regulatory constraints for the sake of argument, the cost of housing is just the marginal cost of building the next unit of housing. There isn't any way around that, so if you want to live in Manhattan, say where high rises exists, the marginal cost of housing will be more expensive than, say, a tiny house in woods somewhere. If that marginal cost of housing becomes unaffordable, even for the government, then we have a real economic problem that needs to be solved apart from housing. We are dealing with that in California, as simply the cost to actually build something is has become so inflated, that it is unaffordable for the city to even build public housing. How we can get people to create an oversupply of housing in a private market, we could do in various ways. Property taxes is the easiest: land value taxes, or say, high property taxes with a large discount for each resident that lives in the taxable area. Ultimately, in this view, housing should be a cost... not an investment. Because under the rubric I put forward, there is no reason housing should appreciate in price in real terms far beyond the marginal cost of the housing itself. While there are ways to do this practically, the problem is that they tend to be politically unpopular for the reasons I listed earlier... people don't actually like change, or density, and will often vote against it whenever they can. Dealing with this is a political problem... one that requires having difficult conversations with both capitalists and socialists about what we actually want, and whether we want affordable housing, or whether we want a "kind of place" to live in, because we usually can't do both in the most desirable areas to live. It's a tough problem, and it's one I've thought deeply about for decades as I've unfortunately grown up in, and live in since, high-demand areas with increasingly unattainable housing situations, and I've heard all the argument, and think most people are not typically concerned about creating sustainable solution over quick-fixes.
dalke 3y ago
> They hold a lease to temporarily occupy a residence that is the property of someone else. ... it's what's actually happening. That's not what's actually happening. In Sweden, a first-hand rental agreement is effectively for life ... actually, even longer as the tenancy be inherited by your spouse and children. The regional rent tribunal can and do override a landlord's decision to terminate the lease.
- scoofy 3y ago
  Yikes... it seems like you've built aristocracy into the system. I would hate to be someone accidentally not born in Stockholm.
  - dalke 3y ago
    I do not think you are using the term "aristocracy" correctly. If you are talking metaphor, the "lord" in "landlord" is a far clearer sign of aristocracy. Capital can be passed down through multiple generations, as the Wallenberg family well knows - now in their fifth generation of ownership. Up until 2003 the Kingdom of Sweden had an actual aristocracy. Renters like me were never part of it.
    - scoofy 3y ago
      You are arguing semantics, I am arguing equivalence. If you have a piece of property, that is reserved for your exclusive use, at a price that is below market value, in perpetuity, that can often be passed to your children… then I think we are talking about a distinction without a difference. Perpetual and especially heritable property use (regardless of technical ownership), that exists well below market rates, is a form of landed aristocracy, just without the pomp and titles. I would say the very same thing about property owners who have perpetual and heritable property tax exemptions or perks, and I do in the case of California.
      - emmacharp 3y ago
        I'd say the baseline being argued here (being able to keep living where you live) to be considered "aristocracy" is pretty darned low.

by scoofy 3y ago

deleted 3y ago

[deleted]

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

I see. Thank you for the detailed comment. Let's say I accept your phrasing and naming of the problem & solution. Given that one big consequence of managed housing economics is depressed profits, how can "free market" supply increases lower housing costs? Won't profits suffer then? Reducing incentives to build? As I see it, and said in the original comment, for supply to increase, price cannot decrease. It can only increase for building to be more enticing than with rent stabilization/control. Not sure how this is beneficial to future generations.

scoofy 3y ago
People seem to think I'm arguing for "free markets" because I'm arguing against rent controls. I'm not. In fact, quite the opposite. I'm just recognizing that people respond to incentives, and we need the incentives to be aimed at lowering housing costs and not just "protecting" incumbents. The problem of unaffordable housing is solved by creating and incentivizing an artificial oversupply of housing. There are many ways to do this. Vienna, for example, did this with public housing. Econ nerds will argue for a land value tax. Houston, Texas, does it in the worst way possible... by creating an unsustainable sprawling mess that will collapse in exactly the way that Strong Towns predicts. >how can "free market" supply increases lower housing costs? Ultimately, if we eliminate the political/regulatory constraints for the sake of argument, the cost of housing is just the marginal cost of building the next unit of housing. There isn't any way around that, so if you want to live in Manhattan, say where high rises exists, the marginal cost of housing will be more expensive than, say, a tiny house in woods somewhere. If that marginal cost of housing becomes unaffordable, even for the government, then we have a real economic problem that needs to be solved apart from housing. We are dealing with that in California, as simply the cost to actually build something is has become so inflated, that it is unaffordable for the city to even build public housing. How we can get people to create an oversupply of housing in a private market, we could do in various ways. Property taxes is the easiest: land value taxes, or say, high property taxes with a large discount for each resident that lives in the taxable area. Ultimately, in this view, housing should be a cost... not an investment. Because under the rubric I put forward, there is no reason housing should appreciate in price in real terms far beyond the marginal cost of the housing itself. While there are ways to do this practically, the problem is that they tend to be politically unpopular for the reasons I listed earlier... people don't actually like change, or density, and will often vote against it whenever they can. Dealing with this is a political problem... one that requires having difficult conversations with both capitalists and socialists about what we actually want, and whether we want affordable housing, or whether we want a "kind of place" to live in, because we usually can't do both in the most desirable areas to live. It's a tough problem, and it's one I've thought deeply about for decades as I've unfortunately grown up in, and live in since, high-demand areas with increasingly unattainable housing situations, and I've heard all the argument, and think most people are not typically concerned about creating sustainable solution over quick-fixes.

dalke 3y ago

> They hold a lease to temporarily occupy a residence that is the property of someone else. ... it's what's actually happening. That's not what's actually happening. In Sweden, a first-hand rental agreement is effectively for life ... actually, even longer as the tenancy be inherited by your spouse and children. The regional rent tribunal can and do override a landlord's decision to terminate the lease.

scoofy 3y ago
Yikes... it seems like you've built aristocracy into the system. I would hate to be someone accidentally not born in Stockholm.
- dalke 3y ago
  I do not think you are using the term "aristocracy" correctly. If you are talking metaphor, the "lord" in "landlord" is a far clearer sign of aristocracy. Capital can be passed down through multiple generations, as the Wallenberg family well knows - now in their fifth generation of ownership. Up until 2003 the Kingdom of Sweden had an actual aristocracy. Renters like me were never part of it.
  - scoofy 3y ago
    You are arguing semantics, I am arguing equivalence. If you have a piece of property, that is reserved for your exclusive use, at a price that is below market value, in perpetuity, that can often be passed to your children… then I think we are talking about a distinction without a difference. Perpetual and especially heritable property use (regardless of technical ownership), that exists well below market rates, is a form of landed aristocracy, just without the pomp and titles. I would say the very same thing about property owners who have perpetual and heritable property tax exemptions or perks, and I do in the case of California.
    - emmacharp 3y ago
      I'd say the baseline being argued here (being able to keep living where you live) to be considered "aristocracy" is pretty darned low.