Haha. No shit.
Another solution by the government interfering with the free market and having the opposite effect as intended.
Who would have guessed /s
Stanford paper says rent control is driving up cost of housing in San Francisco
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Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#12Rent control is a failed experiment. All it does is force land lords to massively increase rent amounts when someone moves out to account for multi-year market increases.
Basically, if the real market price of an apartment is ~$3,000/mo, but in 5 years it realistically would be $5,000, they will simply list it for $5,000 now, to mitigate the loss.
My mother-in-law is a land lord in Los Angeles (a very fair one at that), and is also about as bleeding heart liberal as you can get. She is a staunch opponent of rent control.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#13Rent control is a failed experiment. All it does is force land lords to massively increase rent amounts when someone moves out to account for multi-year market increases. Basically, if the real market price of an apartment is ~$3,000/mo, but in 5 years it realistically would be $5,000, they will simply list it for $5,000 now, to mitigate the loss. My mother-in-law is a land lord in Los Angeles (a very fair one at tha…
>My mother-in-law is a land lord in Los Angeles ... She is a staunch opponent of rent control.
Is this supposed to be surprising...? Regardless of whether it works for tenants, obviously rent control isn't there for the landlord's benefit.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#14Earlier quoted context omitted.
Rent control removes the incentive to build new apartments. There are second order effects that make it counterproductive. Even the socialist economists agree rent control is terrible.
Everyone who wasn’t gentrified out of their home agrees it’s great. An economist might foolishly brush off everyone being priced out of their neighborhoods as simply “externalities” but San Francisco’s politicians thankfully have a more nuanced view of the situation. And, as ghouse indicates, new housing isn’t subject to rent control so developers make a killing if they get approval.
This addresses active developers who are looking to profit from renters. There are plenty of speculators in the Bay Area who purchase homes without renters or buy them out only to sit on the home and not rent it (since it decreases the value of the home). This isn't a rare thing, there many pre 1978 residences with nobody living in them owned by overseas investors.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#15Rent control solves some problems. Creates other problems. Similar to almost any intervention in free markets. Sometimes the cost of intervention outweigh benefits, sometimes they don't. Rent control allows people (wealthy or poor) to remain where they are without purchasing their residence. Unfortunately, to do accomplish this objective, it increases the price for new arrivals (be they wealthy or poor). In Californi…
It's worth noting that while this is true, it has larger effects than those immediate. High cost of living is detracting from the city's ability to attract valuable workers and businesses. I think there are plenty of cities around the country which are primed to take advantage of SF's loss of competitive advantage in real estate.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#16Rent control solves some problems. Creates other problems. Similar to almost any intervention in free markets. Sometimes the cost of intervention outweigh benefits, sometimes they don't. Rent control allows people (wealthy or poor) to remain where they are without purchasing their residence. Unfortunately, to do accomplish this objective, it increases the price for new arrivals (be they wealthy or poor). In Californi…
> Sometimes the cost of intervention outweigh benefits, sometimes they don't. + Sometimes it works for a short period, as the policy reflected the economy at the time of creation, then becomes irrelevant via technology/market reaction to policy/general progress... but yet stays a policy for decades. The important point is that we rarely ever measures whether it does work or not, and policy tends to have an extremely…
You would also need to define the metrics you are going to be using to measure success at the time you pass the legislation. You would also need some sort of control to measure against, and some way to discourage gaming the metric.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#17Now, I have not read the paper, but I would have thought the free market combined with sky-high wages and demand, combined with a lack of inventory, was the cause. Rent Control surely just prevents local families from being muscled out by the tech employees?
Rent control removes the incentive to build new apartments. There are second order effects that make it counterproductive. Even the socialist economists agree rent control is terrible.
>Rent control removes the incentive to build new apartments.
Not even 1% as much as untaxing land and property does.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#18Rent control is a failed experiment. All it does is force land lords to massively increase rent amounts when someone moves out to account for multi-year market increases. Basically, if the real market price of an apartment is ~$3,000/mo, but in 5 years it realistically would be $5,000, they will simply list it for $5,000 now, to mitigate the loss. My mother-in-law is a land lord in Los Angeles (a very fair one at tha…
My mother-in-law is a land lord in Los Angeles
I'm a tenant in Los Angeles, and a staunch supporter of rent control. Knowing that my rent (which is already high) can only go up so much year-over-year provides some bit of stability as the tech industry devours eastward from Santa Monica.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#19Now, I have not read the paper, but I would have thought the free market combined with sky-high wages and demand, combined with a lack of inventory, was the cause. Rent Control surely just prevents local families from being muscled out by the tech employees?
But rent control manipulates the free market. With rent control, people who might otherwise move, don't. Further, people who might rent a vacant apartment while they're overseas don't. Or people who start a family and move to the suburbs keep their city place as a pied a tier. So supply is suppressed, but demand is not.
>But rent control manipulates the free market. With rent control, people who might otherwise move, don't.
But rent control manipulates the free market. With rent control, people who might otherwise be priced out and forced to move away, aren't.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#20Possibly. But Prop 13 is the real problem.