5 ms·

My question still lingers: since housing prices as they are now disincentivize building because of poor profit opportunities, how can removing rent control spel

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!

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!