3 ms·

If price controls on housing exist in SF but not elsewhere, and this causes developers to not build there, then the issue is not that price controls exist in SF

by Carrok 2y ago

If price controls on housing exist in SF but not elsewhere, and this causes developers to not build there, then the issue is not that price controls exist in SF. The issue is that price controls do not exist elsewhere. Set the same price controls across the entire nation, suddenly there is no disincentive to not build in any one area.

Quinner 2y ago
Suddenly there's no incentive to build in all areas.
margalabargala 2y ago
You appear to be making an incorrect assumption that there is some consistent amount of housing which will be built each year, and the question is only how to distribute it among different localities. That's not the case. If you add the same price controls everywhere, then the same near-zero housing gets built everywhere. Construction companies will shut down, they will not continue paying people to build housing at a loss.
- Carrok 2y ago
  You appear to be making an incorrect assumption that price controls must be so onerous that they will result in zero new housing being built.
  - RhodesianHunter 2y ago
    I'm not trying to be snarky, I'm genuinely curious. Have you ever read the economics literature on price controls?
    - Alupis 2y ago
      They have not... and unfortunately this viewpoint is shared by too many these days. Removing the profit-motive from the equation does not magically net increased benefits for everyone. It's usually the opposite in reality... landlords end up doing the absolute bare minimum because sinking a bunch of money into renovating the bathrooms or kitchen will not yield increased rent under these proposed policies. Or people looking to invest in housing/apartments for rental income decide it's ROI is far too low to be worth the hassle and risks... so less housing is built. This line of thinking looks at some minority of people living in slums, and assumes every rental owner is actually a slumlord. So, the solution is obviously to degrade the situation for everyone because some small minority of people have it rough...
      - orwin 2y ago
        I mean, did you read Diamond, McQuade, and Qian? Or newer studies? It should be the minimum to read before talking about rent control effect (with Autor, Palmer, and Pathak) because people tend to cite 'Friedman', who _never_ empirically worked on this subject. I mean, I understand liberals/Libertarians seems to love pure reason, but I hope people on this website are more scientifically minded. Experience is always better than models, no? [edit] anyway, rent-control on market housing do not work, but limited non-market housing do apply downward market pressure, even when done poorly and unplanned (as shown by AP&P study)
  - margalabargala 2y ago
    You appear to be making an incorrect assumption that I said "zero new housing". I did not. I said near-zero. In your comment you explicitly specified that the whole country should adopt the same price controls as SF. SF's price controls are sufficiently onerous that nearly no new housing is built there.
    - Carrok 2y ago
      > In your comment you explicitly specified that the whole country should adopt the same price controls as SF. I absolutely did not say this. I said "Set the same price controls across the entire nation", which means one set of consistent price controls for the country, not the existing set of price controls that SF currently has. Perhaps I should have worded it as "Set a consistent set of price controls across the entire nation".
      - margalabargala 2y ago
        That's fair. The wording of your comment (heavily, honestly) implies setting SF's policies nationwide, but rereading I can see how it can be read the other way. You're correct, "Set a consistent set of price controls across the entire nation" is a much better wording.
Manuel_D 2y ago
Set the price controls across the nation, and developers will redirect their money towards something other than residential real estate. It's frankly disappointing to see this faulty thinking on HN. Price controls fundamentally disrupt the feedback loop between supply and demand. If you limit the profit to be made on building housing, you're disincentivizing it from being built. Imagine a county is in the middle of a famine, and the government in a few provinces set price controls on food. The famine worsens in those provinces. Is the problem helped by setting price controls nationwide?

by Carrok 2y ago

Quinner 2y ago

Suddenly there's no incentive to build in all areas.

margalabargala 2y ago

You appear to be making an incorrect assumption that there is some consistent amount of housing which will be built each year, and the question is only how to distribute it among different localities. That's not the case. If you add the same price controls everywhere, then the same near-zero housing gets built everywhere. Construction companies will shut down, they will not continue paying people to build housing at a loss.

Carrok 2y ago
You appear to be making an incorrect assumption that price controls must be so onerous that they will result in zero new housing being built.
- RhodesianHunter 2y ago
  I'm not trying to be snarky, I'm genuinely curious. Have you ever read the economics literature on price controls?
  - Alupis 2y ago
    They have not... and unfortunately this viewpoint is shared by too many these days. Removing the profit-motive from the equation does not magically net increased benefits for everyone. It's usually the opposite in reality... landlords end up doing the absolute bare minimum because sinking a bunch of money into renovating the bathrooms or kitchen will not yield increased rent under these proposed policies. Or people looking to invest in housing/apartments for rental income decide it's ROI is far too low to be worth the hassle and risks... so less housing is built. This line of thinking looks at some minority of people living in slums, and assumes every rental owner is actually a slumlord. So, the solution is obviously to degrade the situation for everyone because some small minority of people have it rough...
    - orwin 2y ago
      I mean, did you read Diamond, McQuade, and Qian? Or newer studies? It should be the minimum to read before talking about rent control effect (with Autor, Palmer, and Pathak) because people tend to cite 'Friedman', who _never_ empirically worked on this subject. I mean, I understand liberals/Libertarians seems to love pure reason, but I hope people on this website are more scientifically minded. Experience is always better than models, no? [edit] anyway, rent-control on market housing do not work, but limited non-market housing do apply downward market pressure, even when done poorly and unplanned (as shown by AP&P study)
- margalabargala 2y ago
  You appear to be making an incorrect assumption that I said "zero new housing". I did not. I said near-zero. In your comment you explicitly specified that the whole country should adopt the same price controls as SF. SF's price controls are sufficiently onerous that nearly no new housing is built there.
  - Carrok 2y ago
    > In your comment you explicitly specified that the whole country should adopt the same price controls as SF. I absolutely did not say this. I said "Set the same price controls across the entire nation", which means one set of consistent price controls for the country, not the existing set of price controls that SF currently has. Perhaps I should have worded it as "Set a consistent set of price controls across the entire nation".
    - margalabargala 2y ago
      That's fair. The wording of your comment (heavily, honestly) implies setting SF's policies nationwide, but rereading I can see how it can be read the other way. You're correct, "Set a consistent set of price controls across the entire nation" is a much better wording.

Manuel_D 2y ago

Set the price controls across the nation, and developers will redirect their money towards something other than residential real estate. It's frankly disappointing to see this faulty thinking on HN. Price controls fundamentally disrupt the feedback loop between supply and demand. If you limit the profit to be made on building housing, you're disincentivizing it from being built. Imagine a county is in the middle of a famine, and the government in a few provinces set price controls on food. The famine worsens in those provinces. Is the problem helped by setting price controls nationwide?