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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 requirem

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'

dagw 2y ago
The core problem is that if you implement rent control, without a bunch of other policies, all you achieve is to remove potential rental apartments from the market. Either they'll never get built or rental apartments will be sold off and removed from the rental pool once rents drop below a certain relative level compared to the potential sales price for the same apartment (or apartment building). Rent control is fine, if the government at same time steps up and implements policies to make sure that rentable apartments at the rent controlled price are actually available on the market. Rent control makes no difference to me if the end result is that it is completely impossible for me to rent an apartment at any price. I've lived in places with and without strict rent control, and the biggest difference was that in the place without rent control I could easily find several places to rent in the parts of the city I wanted to live in.

dagw 2y ago

The core problem is that if you implement rent control, without a bunch of other policies, all you achieve is to remove potential rental apartments from the market. Either they'll never get built or rental apartments will be sold off and removed from the rental pool once rents drop below a certain relative level compared to the potential sales price for the same apartment (or apartment building). Rent control is fine, if the government at same time steps up and implements policies to make sure that rentable apartments at the rent controlled price are actually available on the market. Rent control makes no difference to me if the end result is that it is completely impossible for me to rent an apartment at any price. I've lived in places with and without strict rent control, and the biggest difference was that in the place without rent control I could easily find several places to rent in the parts of the city I wanted to live in.