by patothon on 12/28/19, 4:06 AM with 35 comments
by wahern on 12/28/19, 5:19 AM
The researchers suggest transfer payments instead of rent control, minimizing negative effects on supply. But Americans, and I'd bet most people around the world, dislike transfer payments. Nobody wants to be "on the dole", and in any event signing up for those payments comes with its own form of social cost and insecurity. Rent control is a silent tax that is relatively optimal from a political-economic perspective (not just an economic one).
The same dynamics are at play with free trade. Academics said dislocation costs of free trade could be ameliorated with transfer payments. But those payments never came, and voters would never accept them as a substitute for lost jobs. And for similar reasons--people don't want to feel forced to move, they want to feel like their pursuing better opportunities. But when a factory shuts down or a landlord effectively evicts you, it's not a choice. And even if it only happens to a small fraction of people, many more feel insecure even if they have no rational reason to feel insecure.
The question isn't whether rent control is good or bad, it's whether and to what extent it's possible to extract in exchange zoning and development concessions that promote supply increases. Unfortunately, the outlook doesn't seem so good. The only other alternative is Federal pressure, which doesn't seem too likely, either, unless it comes in the form of a Supreme Court decision that constrains zoning practices.
by mamon on 12/28/19, 10:00 AM
Rent control disincentivizes renovation of existing apartments and building new ones. It also encourages people to stay in apartments that are too big for them, because rent control typically locks price for existing, long term tenants on lower level than paid by new tenants. All this makes housing crisis worse.
by adventureartist on 12/28/19, 9:19 AM
by spyckie2 on 12/28/19, 7:00 AM
In this case, the ideal is stable, affordable rent prices. The proposed solution is rent control.
Rent control, from a policy standpoint, does not create affordable rent prices by itself. It needs to be paired with a lot of other policies - supply control, great city planning, landlord incentive adjustments via taxes, fines / punishments, enforcement of it, etc.
So, people espousing rent control as the solution are inaccurate semantically. Rent control is part of the solution, but what's more important is how rent control is paired with other policies.
Rent control is not an independent solution, but (as most policies are) its complementary and needs to fit with the rest of the policy package. For instance, if you had a policy to force housing to double every year (and somehow it actually happened), rent control is not needed because supply would reduce pricing naturally. And in a supply blocked economy, the issue is that demand is high - rent control would do nothing to reduce demand.
If you're going to create a policy that creates stable, affordable rent prices, you'll need to look holistically at the each sub-part of the issue. Saying that we need stable, affordable rent prices is natural - it's a human need, a moralistic ideal, and also great for many people. But it doesn't add much to the conversation, and it makes it difficult to have dialogue with actual proposed solutions over the loud, muddled public debate.
by 8bitsrule on 12/28/19, 9:33 AM
A prospective landlord might have been required to live in their building for a minimum of a year first. That dampener would slowed down the fission reaction. But oh no, regulation is bad. Trickle-down is good.
We've already experienced the result ... tens of thousands of homeless. Who -should- pay?
by WheelsAtLarge on 12/28/19, 5:37 PM
by mishkinf on 12/28/19, 6:25 AM
by CryptoPunk on 12/28/19, 5:27 AM
But I see the ignorance of the left-wing base as just as dangerous. The idea that there's a capitalist conspiracy to trick the populace into believing that free markets are better for public welfare, and that price controls like minimum wage and rent control harm the public, is extremely widely accepted.
Left-wing misconceptions about economics are even more consequential than right-wing populist ideas about vaccines. They have the critical mass of support needed to turn into policy in the most economically important housing markets in the US.