3 ms·

Rent controlled apartments are effectively removed from the supply of housing in the market. Thus, anyone who isn't lucky enough to get a rent controlled apartm

Rent controlled apartments are effectively removed from the supply of housing in the market. Thus, anyone who isn't lucky enough to get a rent controlled apartment (which are most people) faces a market with decreased supply and thus higher prices. It's one of the economically proven ironies of rent control -- higher prices for everyone else.

dragonwriter 12y ago
It's not an irony, because subsidizing based on certain qualifying factors at the general expense is the point of rent control.
- tptacek 12y ago
  Your comment missed the irony, which is that rent control is an effort to mitigate the impact of scarcity for tenants that increases scarcity and reduces market outcomes for tenants.
  - dragonwriter 12y ago
    Rent control is a deliberate tradeoff between price stability for existing tenants and supply (and therefore market clearing price for new leases.) So the supply effect isn't an irony, it's part of the chosen tradeoff.
    - tptacek 12y ago
      Can you find a source that acknowledges that rent control is a deliberate attempt to trade additional scarcity for price stability for incumbent residents? I can't find one. I'm a little concerned that this is an instance of retconning.
      - wpietri 12y ago
        San Francisco's rent control, at least, doesn't apply to building built after rent control was passed. [1] I believe that's a deliberate attempt to solve for the scarcity concern. [1] http://www.sfrb.org/index.aspx?page=1036 http://www.sfrb.org/index.aspx?page=1036
darknerd 12y ago
In a free market yes, but not in a speculation market that does not respond market demands (combined with macroeconomic mechanisms and manipulations from the Federal Government). Going beyond simplistic supply/demand, high speculation markets have constrained economic growth, and many governments, such as HK or South Korea, have taken measures control it as well. It's not that the cost in the area rise, but also startup cost for new enterprises becomes to high, making it difficult for startups and new innovations they create.

dragonwriter 12y ago

It's not an irony, because subsidizing based on certain qualifying factors at the general expense is the point of rent control.

tptacek 12y ago
Your comment missed the irony, which is that rent control is an effort to mitigate the impact of scarcity for tenants that increases scarcity and reduces market outcomes for tenants.
- dragonwriter 12y ago
  Rent control is a deliberate tradeoff between price stability for existing tenants and supply (and therefore market clearing price for new leases.) So the supply effect isn't an irony, it's part of the chosen tradeoff.
  - tptacek 12y ago
    Can you find a source that acknowledges that rent control is a deliberate attempt to trade additional scarcity for price stability for incumbent residents? I can't find one. I'm a little concerned that this is an instance of retconning.
    - wpietri 12y ago
      San Francisco's rent control, at least, doesn't apply to building built after rent control was passed. [1] I believe that's a deliberate attempt to solve for the scarcity concern. [1] http://www.sfrb.org/index.aspx?page=1036 http://www.sfrb.org/index.aspx?page=1036

darknerd 12y ago

In a free market yes, but not in a speculation market that does not respond market demands (combined with macroeconomic mechanisms and manipulations from the Federal Government). Going beyond simplistic supply/demand, high speculation markets have constrained economic growth, and many governments, such as HK or South Korea, have taken measures control it as well. It's not that the cost in the area rise, but also startup cost for new enterprises becomes to high, making it difficult for startups and new innovations they create.