7 ms·

The Dutch have rent control. Rent control means the end of new supply from the market. You get new supply from and only from Government funding/projects, and

The Dutch have rent control. Rent control means the end of new supply from the market. You get new supply from and only from Government funding/projects, and that works as well as any Government-run service. The supply in Holland is inelastic. It simply does not respond to the market, which is to say, to the level of demand. So you end up with stories like this. It's even worse in Sweden. In Sweden, last I knew, it's actually illegal for a private person to rent from a private landlord, unless the State gives permission. There's a queue to be given permission, you accumulate points over time, and it takes about two decades to be allowed to rent in central Stockholm. Hard to imagine a worse fuck-up, and of course being State, it's political, and it's impossible to get rid of.

Workaccount2 2y ago
People think you can legislate things into existance. Rent to high? Just make high rent illegal and problem solved! Reading it here looks like a joke, but there are huge swaths of people continually prodding legislators to pass laws exactly as knee-jerkishly naive as this.
- legacynl 2y ago
  On the other hand you seem to think that letting the market decide will solve all problems? That's hilariously naive.
  - tqi 2y ago
    It's possible both of you are right...
  - Workaccount2 2y ago
    The legislature has to use the tools the market provides to fix the market. The _only_ solution to high rent is to build more housing.
Tade0 2y ago
The issue is way more complex than that and you can't just blame it on rent control: https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/ https://dutchreview.com/expat/housing/why-is-there-a-housing...
goosedragons 2y ago
And that's why the housing situation is so different in other developed countries without rent control, right? Like look at the U.S, most states don't allow any sort of rent control and (check notes) they're uh, hmm, only short 7.2 million homes? Yup, no rent control sure is the fix. Definitely don't need governments stepping and mandating housing. Where has that worked? Singapore? Is that even a real place? We need more private landlords with the freedom to randomly raise rents by any percentage they want. Surely that's the only way to get enough housing at affordable levels.
- subtextminer 2y ago
  The biggest problem with housing the USA is largely local zoning that artificially limits what can be built. Cities that have minimal zoning such as Houston, Texas have rents that have closely followed inflation only. In Houston there is literally no zoning. While this has some bad side effects in terms of ugliness it is highly affordable. Some progressive US cities, such as Minneapolis and Austin, are now liberalizing zoning to allow much more dense housing to be built in central areas long mass transit.
  - wbl 2y ago
    Houston does have extensive density controls
- sparky_z 2y ago
  There are a lot of different well-meaning policies that can fuck up a housing market by restricting supply. Rent control is just one of them. This is like if you say that privatizing prisons is a bad thing and then somebody else comes along and says "But look at North Korea. They have state-run prisons and the prisoner conditions aren't any better. Clearly, therefore, privatization of prisons doesn't result in any bad outcomes for prisoners." Just a total non-sequitor.
  - exe34 2y ago
    He gave you 5 liberal countries and you literally had to reach for North Korea for your false equivalence?
deleted 2y ago
[deleted]
switch007 2y ago
Rent controls. NIMBYs. Zoning laws. Builder skills shortage. An excuse around every corner. When can we admit something bigger is at play here? The market is being manipulated on a grand scale. Every government seems to only pay lip service to the issue while creating policies to inflate the assets. Now why is that? Landlords have captured our policy makers. Many MPs in the UK are landlords. We're screwed
- Tade0 2y ago
  Hailing from a country where the population peaked in the late 90s, housing developers build what they want, where they want and where prices still increased in lockstep with the rest of the world, I can attest to that. There's no reason an apartment in a 80s commie block in eastern Europe should go for €4k per square metre. You're not getting your money's worth for that.
  - lifestyleguru 2y ago
    I feel this pain. Commieblocks were designed to last around 50-70 years, yes they can stand longer but what kind of architectural monument are they? Germans in the east simply demolish them. Meantime in Poland?! "EUR 4k per square meter muthafucka!". This would be absurdly ridiculous, except it's real and I need housing.
  - iggldiggl 2y ago
    > where the population peaked in the late 90s 1. Peak housing demand doesn't necessarily have to coincide exactly with peak population, because it also depends on average household sizes and living space demand per person. 2. Country-wide population figures don't account for regional population movement.
    - Tade0 2y ago
      1. Prices started going up when prospective homebuyers were already a particularly small generation who also had fewer children - they adjusted family size to their living space demand as it's not like they could suddenly afford more spacious housing. 2. The trend for the past 20+ years has been to move out of cities, with the urbanization rate actually decreasing over that period, as urban real estate was never really affordable. Yet, prices, especially in cities, went up.
stefanfisk 2y ago
I don’t know what you’re referring with regards to Sweden. While we have rent control there’s plenty of private landlords. Each city will usually have an official queue for rentals. But private landlords are not obligated to use it. Larger private landlords often hade their own queue. Smaller ones do whatever they feel like.
- DanielHB 2y ago
  He is not totally wrong, it's just private landlords are usually companies, not individuals. If individuals are renting an apartment, it's almost always limited to two 2 years and needs paperwork with the housing association including a reason for renting instead of selling Banks also don't give loans to buy property if the stated reason is to rent
- dagw 2y ago
  plenty of private landlords Not compared to countries with an actual free rental market. Having lived in both Norway and Sweden, the difference is stark. Moving to Oslo it took me a couple of phone calls and less than 10 days before I literally had the keys to a rental apartment in the part of Oslo I wanted to live in. Moving to Sweden it took months and I ended up with an 'illegal' second hand contract in a shitty part of Stockholm.
constantcrying 2y ago
Absolutely true. Rent control is the government trying to "fix" a problem they set up to be unfixable. To be honest I think it is by design, if nobody is willing to buy or build housing the government, by default, gets control over it, so they can do what it what they want. Of course everyone on this website will hate you for suggesting that price fixing has any effect on supply.
- legacynl 2y ago
  It's not that rent controls dont have any effect, it's just that the effect is not very significant. Rent controls have existed long before the current housing crisis, it's not the cause.
  - signatoremo 2y ago
    Rent control limits supply. It may not be a problem in the past when there was less demand. It is a problem now.
    - legacynl 2y ago
      so basically you're agreeing that other factors can play as big/bigger role in supply of housing units?
legacynl 2y ago
> Rent control means the end of new supply from the market. Can you explain why you think this? The way I see it, rent control just means that property developers will have to wait a little bit longer before their investments start paying off. They're still making massive amounts of profits, it's just a little bit less. The benefit of rent controls means that overall people will have more money to spend, which benefits the overall economy. In my opinion it makes perfect sense.
- j7ake 2y ago
  You can imagine that a rent control set such that it will lose money for every property owner. In this case, there will be zero property owners who will offer their place for rent, leading to zero places available to rent.
  - legacynl 2y ago
    yes indeed if rent controls would limit rent to 10 dollars a month then all landlords will be quickly out of business. but that is obviously not how it works
- dagw 2y ago
  If you're a property developer building an apartment building you have two choices, either sell the apartments or rent out the apartments. In an ideal free market economy the rental and sales prices for these apartments will be such that the profit from either will be the same and the supply of either type of apartment will be driven by the demand of that market. However if you cap rental prices and don't cap sales prices, then it will never be more profitable to rent out an apartment compared to selling the same apartment, so property developers will only build apartments to sell rather than to rent. If you want new rental apartments and rent control you have to use some kind of additional carrot and/or stick to compel property developers to pick the less profitable option.
  - legacynl 2y ago
    I understand that from a purely economic/free market perspective rent controls are a bad thing. But for an 'ideal free market' to exist there are some requirements that in the real world don't apply. In an ideal free market consumers are fully informed, logical and able to say no to a bad price. In the real world, especially when it comes to necessities, consumers often don't meet these requirements. People need housing, they cant sit around waiting for the market to adjust. If you live in an area with children you can't just pack up and leave when a cheaper option becomes available or the landlord decides to increase the price. In the real world there is a big imbalance in the power between consumers and suppliers when it comes to housing. Paradoxicaly rent controls are a tactic used to empower consumers in an effort to balance the scales, exactly so the real world might approach that 'ideal free market'
tmnvix 2y ago
> It simply does not respond to the market, which is to say, to the level of demand. > So you end up with stories like this. You seem very sure that rent control is the cause of the lack of available housing. Can you be so sure when the same type of shortage exists in so many other places without rent control? I could just as easily argue that short term rentals are to blame.

Workaccount2 2y ago

People think you can legislate things into existance. Rent to high? Just make high rent illegal and problem solved! Reading it here looks like a joke, but there are huge swaths of people continually prodding legislators to pass laws exactly as knee-jerkishly naive as this.

legacynl 2y ago
On the other hand you seem to think that letting the market decide will solve all problems? That's hilariously naive.
- tqi 2y ago
  It's possible both of you are right...
- Workaccount2 2y ago
  The legislature has to use the tools the market provides to fix the market. The _only_ solution to high rent is to build more housing.

Tade0 2y ago

The issue is way more complex than that and you can't just blame it on rent control: https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/ https://dutchreview.com/expat/housing/why-is-there-a-housing...

goosedragons 2y ago

And that's why the housing situation is so different in other developed countries without rent control, right? Like look at the U.S, most states don't allow any sort of rent control and (check notes) they're uh, hmm, only short 7.2 million homes? Yup, no rent control sure is the fix. Definitely don't need governments stepping and mandating housing. Where has that worked? Singapore? Is that even a real place? We need more private landlords with the freedom to randomly raise rents by any percentage they want. Surely that's the only way to get enough housing at affordable levels.

subtextminer 2y ago
The biggest problem with housing the USA is largely local zoning that artificially limits what can be built. Cities that have minimal zoning such as Houston, Texas have rents that have closely followed inflation only. In Houston there is literally no zoning. While this has some bad side effects in terms of ugliness it is highly affordable. Some progressive US cities, such as Minneapolis and Austin, are now liberalizing zoning to allow much more dense housing to be built in central areas long mass transit.
- wbl 2y ago
  Houston does have extensive density controls
sparky_z 2y ago
There are a lot of different well-meaning policies that can fuck up a housing market by restricting supply. Rent control is just one of them. This is like if you say that privatizing prisons is a bad thing and then somebody else comes along and says "But look at North Korea. They have state-run prisons and the prisoner conditions aren't any better. Clearly, therefore, privatization of prisons doesn't result in any bad outcomes for prisoners." Just a total non-sequitor.
- exe34 2y ago
  He gave you 5 liberal countries and you literally had to reach for North Korea for your false equivalence?

deleted 2y ago

[deleted]

switch007 2y ago

Rent controls. NIMBYs. Zoning laws. Builder skills shortage. An excuse around every corner. When can we admit something bigger is at play here? The market is being manipulated on a grand scale. Every government seems to only pay lip service to the issue while creating policies to inflate the assets. Now why is that? Landlords have captured our policy makers. Many MPs in the UK are landlords. We're screwed

Tade0 2y ago
Hailing from a country where the population peaked in the late 90s, housing developers build what they want, where they want and where prices still increased in lockstep with the rest of the world, I can attest to that. There's no reason an apartment in a 80s commie block in eastern Europe should go for €4k per square metre. You're not getting your money's worth for that.
- lifestyleguru 2y ago
  I feel this pain. Commieblocks were designed to last around 50-70 years, yes they can stand longer but what kind of architectural monument are they? Germans in the east simply demolish them. Meantime in Poland?! "EUR 4k per square meter muthafucka!". This would be absurdly ridiculous, except it's real and I need housing.
- iggldiggl 2y ago
  > where the population peaked in the late 90s 1. Peak housing demand doesn't necessarily have to coincide exactly with peak population, because it also depends on average household sizes and living space demand per person. 2. Country-wide population figures don't account for regional population movement.
  - Tade0 2y ago
    1. Prices started going up when prospective homebuyers were already a particularly small generation who also had fewer children - they adjusted family size to their living space demand as it's not like they could suddenly afford more spacious housing. 2. The trend for the past 20+ years has been to move out of cities, with the urbanization rate actually decreasing over that period, as urban real estate was never really affordable. Yet, prices, especially in cities, went up.

stefanfisk 2y ago

I don’t know what you’re referring with regards to Sweden. While we have rent control there’s plenty of private landlords. Each city will usually have an official queue for rentals. But private landlords are not obligated to use it. Larger private landlords often hade their own queue. Smaller ones do whatever they feel like.

DanielHB 2y ago
He is not totally wrong, it's just private landlords are usually companies, not individuals. If individuals are renting an apartment, it's almost always limited to two 2 years and needs paperwork with the housing association including a reason for renting instead of selling Banks also don't give loans to buy property if the stated reason is to rent
dagw 2y ago
plenty of private landlords Not compared to countries with an actual free rental market. Having lived in both Norway and Sweden, the difference is stark. Moving to Oslo it took me a couple of phone calls and less than 10 days before I literally had the keys to a rental apartment in the part of Oslo I wanted to live in. Moving to Sweden it took months and I ended up with an 'illegal' second hand contract in a shitty part of Stockholm.

constantcrying 2y ago

Absolutely true. Rent control is the government trying to "fix" a problem they set up to be unfixable. To be honest I think it is by design, if nobody is willing to buy or build housing the government, by default, gets control over it, so they can do what it what they want. Of course everyone on this website will hate you for suggesting that price fixing has any effect on supply.

legacynl 2y ago
It's not that rent controls dont have any effect, it's just that the effect is not very significant. Rent controls have existed long before the current housing crisis, it's not the cause.
- signatoremo 2y ago
  Rent control limits supply. It may not be a problem in the past when there was less demand. It is a problem now.
  - legacynl 2y ago
    so basically you're agreeing that other factors can play as big/bigger role in supply of housing units?

legacynl 2y ago

> Rent control means the end of new supply from the market. Can you explain why you think this? The way I see it, rent control just means that property developers will have to wait a little bit longer before their investments start paying off. They're still making massive amounts of profits, it's just a little bit less. The benefit of rent controls means that overall people will have more money to spend, which benefits the overall economy. In my opinion it makes perfect sense.

j7ake 2y ago
You can imagine that a rent control set such that it will lose money for every property owner. In this case, there will be zero property owners who will offer their place for rent, leading to zero places available to rent.
- legacynl 2y ago
  yes indeed if rent controls would limit rent to 10 dollars a month then all landlords will be quickly out of business. but that is obviously not how it works
dagw 2y ago
If you're a property developer building an apartment building you have two choices, either sell the apartments or rent out the apartments. In an ideal free market economy the rental and sales prices for these apartments will be such that the profit from either will be the same and the supply of either type of apartment will be driven by the demand of that market. However if you cap rental prices and don't cap sales prices, then it will never be more profitable to rent out an apartment compared to selling the same apartment, so property developers will only build apartments to sell rather than to rent. If you want new rental apartments and rent control you have to use some kind of additional carrot and/or stick to compel property developers to pick the less profitable option.
- legacynl 2y ago
  I understand that from a purely economic/free market perspective rent controls are a bad thing. But for an 'ideal free market' to exist there are some requirements that in the real world don't apply. In an ideal free market consumers are fully informed, logical and able to say no to a bad price. In the real world, especially when it comes to necessities, consumers often don't meet these requirements. People need housing, they cant sit around waiting for the market to adjust. If you live in an area with children you can't just pack up and leave when a cheaper option becomes available or the landlord decides to increase the price. In the real world there is a big imbalance in the power between consumers and suppliers when it comes to housing. Paradoxicaly rent controls are a tactic used to empower consumers in an effort to balance the scales, exactly so the real world might approach that 'ideal free market'

tmnvix 2y ago

> It simply does not respond to the market, which is to say, to the level of demand. > So you end up with stories like this. You seem very sure that rent control is the cause of the lack of available housing. Can you be so sure when the same type of shortage exists in so many other places without rent control? I could just as easily argue that short term rentals are to blame.