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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

#31

Post by rayiner »

ghouse wrote: post #5

Rent 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…

> Creates other problems. Similar to almost any intervention in free markets. Sometimes the cost of intervention outweigh benefits, sometimes they don't.

Unless the intervention is addressed to a market failure (and rent control is not), the cost of intervention almost by definition outweighs the benefits. I.e. the value gained by cheaper rents for early residents is more than offset by higher rents for everyone + dead weight loss from distortion of economic incentives.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#32

Post by refurb »

This is what new rent control regulations in Toronto are doing...

More than 1,000 planned purpose-built rental units have instead been converted to condominiums in the Greater Toronto Area since Premier Kathleen Wynne's government expanded rent control[1]

It's making the housing crisis worse, not better. For those who already have low rent locked in, it's the ultimate "fk you, I got mine."

[1]https://www.theglobeandmail.com/news/national/report-finds-1...

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#33

Post by tomohawk »

dmix wrote: post #10
ghouse wrote: post #5

Rent 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…

Heinlen in "The Moon is a Harsh Mistress" introduces the idea of a legislature with 2 chambers. One for creating laws and the other for getting rid of them. The threshold for creating them being higher.

The way it is now, everything is geared towards "doing" things, and credit is received for "accomplishments". Its usually much harder to undo things. It would be refreshing to have specialists in undoing things.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#34

Post by oldsklgdfth »

dmix wrote: post #10
ghouse wrote: post #5

Rent 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…

Personally I think that 1) is not attainable in a practical sense. It would require resources that are not available and would just add to the ridiculous overhead of running a government.

I used to believe in an ideal state as the one you describe. More recently, I think about what a system - i.e economic, political, social - that is stable (in some sense) looks like. For example, liberatarians believe that markets sort things out on their own. I usually conclude that small societies are optimal for quality of living.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#37

Post by classwarsteve »

theduro wrote: post #12

Rent 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…

>All it does is force land lords to massively increase rent amounts

Ah yes, the landlords are forced to massively raise rents, unlike the tenants, who are allowed to choose whatever price they want.

Simple reliance on a profit model for housing is never going to adequately meet housing needs.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#38

Post by nicholas73 »

theduro wrote: post #12

Rent 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…

Landlords will rent at whatever they can a tenant to pay for, not some number in their mental ledger.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#39

Post by 8ytecoder »

Another point which is usually not well-discussed, the houses/apts in SF are really bad in terms of quality, amenities and features. With new housing, this is starting to change a little bit. But, overall, rent control results in really bad maintenance. Landlords do the absolute bare minimum to not get sued/fined. For the rent people in SF pay, the value they derive is almost a joke.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#40

Post by ardit33 »

paulgb wrote: post #21
bendmorris wrote: post #13

Earlier quoted context omitted.

>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.

Having read up on some of the building purchases in my own neighborhood (East Village of NYC), it seems that rent control is bad for honest landlords and good for the slimey ones who are willing to "encourage" people to leave. And thanks to Coase's theorem the building sales are usually in that direction.

agreed, lived in apt in the East Village, and while my apt. was really nice, the common areas were in shambles and it looked like the managing company didn't care about its exterior either.

The reason was that almost half of the apt. in the building were rent controlled (grandfathered in).

I think a mix of limited rent control (i.e. 5 years, max) plus building more apt for people that can't afford it, is a better combo on keeping a stability and folks being able to afford and live closer to work.

The only way to build more affordable apartments, is to allow for building more market rate apartments as well. Right now this current older (baby boomer) generation is screwing hard the upcoming one.

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