3 ms·

> Do you want to invest tens of millions of dollars into building an apartment with zero expectations of making a return? No, but this doesn't change the fact

> Do you want to invest tens of millions of dollars into building an apartment with zero expectations of making a return? No, but this doesn't change the fact that housing is a basic good like gasoline and insurance. Controls in those industries don't prevent companies from investing. Profit regulation doesn't mean no profit. > price controls on housing lead to few developers willing to build there Because there are alternate places without those controls. If housing were treated like the essential good that it is, there wouldn't be any ROI havens, and developers would adapt (or die if they can't accept reducing the typical ROI, which averages around 15%) > rising demand which has not been satisfied by new housing construction There's plenty of demand, just not for the houses that are being built. (That's not to say there aren't specific cities where there is no supply). Based on most affordability standards, many can't afford the typical rent or mortgage. If those prices can't come down, or income can't go up, then new types of much cheaper housing must be built.

Manuel_D 2y ago
Gasoline isn't subject to price controls, though! They were in the past, and the results were disastrous. This is what price-controls on gasoline look like: https://www.federalreservehistory.org/-/media/images/essays/oil-shock-of-1978-79/oil_shock_1978_79_1_720x450.jpg https://www.federalreservehistory.org/-/media/images/essays/... The way that the government influences gas prices is that they stockpile or release oil from the US strategic reserves. They don't regulate prices. They influence supply in order to influence prices. The analogy would be building public housing. I'm not sure what you mean by treating housing like an "essential good". Most essential goods aren't subject to price controls. There aren't price controls on food, for example. Most countries that set price controls on food experience famines (or the price controls are widely ignored and the black market becomes the normal market).
- bdcravens 2y ago
  You can be prosecuted for price gouging of essential goods.
  - Manuel_D 2y ago
    "price gouging" is not the same as price-fixing. Price gouging refers to raising prices in response to natural disasters: https://www.cato.org/blog/anti-price-gouging-laws-entrench-shortages https://www.cato.org/blog/anti-price-gouging-laws-entrench-s... > Texas’s APGL kicks in when a disaster is declared by the governor or the country’s president. Under the law, merchants are not allowed to sell or lease fuel, food, medicine, lodging, building materials, construction tools, or other necessities at “exorbitant” or “excessive” prices, with those caught facing civil penalties of up to $10,000 per violation, rising to $250,000 if elderly consumers are affected. There's very specific, and very short-term windows in which prices cannot be raise excessively. It's not even remotely comparable to price controls on rents.
    - orwin 2y ago
      It's called 'dynamic price control' and is present in most cities in my country. My landlord cannot rise the rent at weird levels, which is based on the selling cost of the unit. Basically if her unit appreciate 5% yoy, she won't be able to rise the rent higher than 5% yoy.
      - Manuel_D 2y ago
        So it's exactly the same thing as SF rent control, albeit with a higher allowable year-over-year increase. There's nothing "dynamic" about it, it's just textbook rent control.
        vundercind 2y ago
        Reads to me like the rate’s dynamic because it’s indexed to something else (potential sale price) that floats freely, rather than being a fixed value.

Manuel_D 2y ago

Gasoline isn't subject to price controls, though! They were in the past, and the results were disastrous. This is what price-controls on gasoline look like: https://www.federalreservehistory.org/-/media/images/essays/oil-shock-of-1978-79/oil_shock_1978_79_1_720x450.jpg https://www.federalreservehistory.org/-/media/images/essays/... The way that the government influences gas prices is that they stockpile or release oil from the US strategic reserves. They don't regulate prices. They influence supply in order to influence prices. The analogy would be building public housing. I'm not sure what you mean by treating housing like an "essential good". Most essential goods aren't subject to price controls. There aren't price controls on food, for example. Most countries that set price controls on food experience famines (or the price controls are widely ignored and the black market becomes the normal market).

bdcravens 2y ago
You can be prosecuted for price gouging of essential goods.
- Manuel_D 2y ago
  "price gouging" is not the same as price-fixing. Price gouging refers to raising prices in response to natural disasters: https://www.cato.org/blog/anti-price-gouging-laws-entrench-shortages https://www.cato.org/blog/anti-price-gouging-laws-entrench-s... > Texas’s APGL kicks in when a disaster is declared by the governor or the country’s president. Under the law, merchants are not allowed to sell or lease fuel, food, medicine, lodging, building materials, construction tools, or other necessities at “exorbitant” or “excessive” prices, with those caught facing civil penalties of up to $10,000 per violation, rising to $250,000 if elderly consumers are affected. There's very specific, and very short-term windows in which prices cannot be raise excessively. It's not even remotely comparable to price controls on rents.
  - orwin 2y ago
    It's called 'dynamic price control' and is present in most cities in my country. My landlord cannot rise the rent at weird levels, which is based on the selling cost of the unit. Basically if her unit appreciate 5% yoy, she won't be able to rise the rent higher than 5% yoy.
    - Manuel_D 2y ago
      So it's exactly the same thing as SF rent control, albeit with a higher allowable year-over-year increase. There's nothing "dynamic" about it, it's just textbook rent control.
      - vundercind 2y ago
        Reads to me like the rate’s dynamic because it’s indexed to something else (potential sale price) that floats freely, rather than being a fixed value.