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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

#91

Post by DougN7 »

ThrustVectoring wrote: post #43

Another second-order effect of rent control is increased traffic. Suppose you have two residents with significantly below-market-rate housing at the same quality level, one in downtown SF and another in Mountain View. The former starts a new job at Google in Mountain View, the latter starts a new job at a trendy start-up in downtown SF. Since they're paying significantly below market rate, they're unable to trade apa…

That's a really great insight. The fact that such good intentions often lead to bigger problems is what concerns me about UBI - it will surely have huge second-order effects. I'm not sure what they will be, but rent control in a city is tiny compared to the effect a universal change like UBI would introduce.

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

#92

Post by civilian »

Spooky23 wrote: post #58
ThrustVectoring wrote: post #43

Another second-order effect of rent control is increased traffic. Suppose you have two residents with significantly below-market-rate housing at the same quality level, one in downtown SF and another in Mountain View. The former starts a new job at Google in Mountain View, the latter starts a new job at a trendy start-up in downtown SF. Since they're paying significantly below market rate, they're unable to trade apa…

That’s a real stretch. End of the day, short term leases make rents float at the cost of making renters second class citizens who cannot stay in any one place or area. Rent control is a way to deal with that. It exists because voters care deeply about it.

But rent control only benefits the renters already in place. It hurts new renters to the area, by driving up costs.

You've got to address a moral judgement you've implicitly made: What makes the current renters of a city more deserving than the future renters who might move to the city?

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

#93

Post by noobermin »

hindsightbias wrote: post #62
noobermin wrote: post #47

Did anyone read the excerpts in the article and not come to the conclusion that rent control caused this? It sounds to me to like greedy landlords being greedy. It feels like the title and the thesis of the news piece is either incorrect or at least misleading.

If only landlords could be greedy with all their units, prices would average lower.

Your comment doesn't really address my point. The argument the article presents has less to do with free market fundamentalism than it does with landlords trying to get tenants of rent controlled units to leave in order to get market rates. That seems like the issue. Blaming rent control sounds a lot to me like blaming the victim for the crime.

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

#94

Post by [deleted] »

Spooky23 wrote: post #58
ThrustVectoring wrote: post #43

Another second-order effect of rent control is increased traffic. Suppose you have two residents with significantly below-market-rate housing at the same quality level, one in downtown SF and another in Mountain View. The former starts a new job at Google in Mountain View, the latter starts a new job at a trendy start-up in downtown SF. Since they're paying significantly below market rate, they're unable to trade apa…

That’s a real stretch. End of the day, short term leases make rents float at the cost of making renters second class citizens who cannot stay in any one place or area. Rent control is a way to deal with that. It exists because voters care deeply about it.

[deleted]

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

#95

Post by tmalsburg2 »

ThrustVectoring wrote: post #43

Another second-order effect of rent control is increased traffic. Suppose you have two residents with significantly below-market-rate housing at the same quality level, one in downtown SF and another in Mountain View. The former starts a new job at Google in Mountain View, the latter starts a new job at a trendy start-up in downtown SF. Since they're paying significantly below market rate, they're unable to trade apa…

Interesting. But it would be good to have some data showing whether this effect on traffic is real and, if yes, what magnitude it has. However, even if the data supports the idea, the conclusion that rent control in general is bad is not really supported because rent control could be implemented in different ways that do not hinder mobility. Germany recently introduced a new rent control law the goal of which is precisely that.

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

#96

Post by antisthenes »

rayiner wrote: post #65
Gibbon1 wrote: post #27

Earlier quoted context omitted.

I've been paying attention to what economists say fairly rigorously for the last ten years and they have some huge blind spots. One of them is they completely and utterly ignore the importance of income and social stability. Which is they see any expenditures needed to provide those as a unacceptable drag on society.

> they ignore the importance of income and social stability They don't ignore it, they're just not ignorant about the costs of income and social stability. For example: I grew up in a relatively modest house (3BR, 1,100 square feet) about 40 minutes outside of D.C. Growing up, there were quite a few young families in our neighborhood. Average household income was probably about $70k/year in today's money--relatively…

> Instead of playing the housing bubble game, my wife and I commute in 60+ minutes each way. Partly because it enables us to raise our kids in a neighborhood with young families. But also just out of spite.

Who exactly is being spited here when you waste 10% of your life sitting in a car 'commuting' ?

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

#97

Post by cowsandmilk »

nicholas73 wrote: post #38
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.

What your response misses is the time component of vacancy.

If I have rent control, I will list at a higher price and let the property sit vacant for longer to find a tenant because the law says that I am limited in the ability to later adapt the rent to the market.

Without rent control, there is much less incentive to leave a property vacant, looking for a tenant willing to pay a higher price point.

Most microeconomics courses teach that markets don't have one price for a good, and one of the lessons will be in strategies, such as coupons, that owners of goods use to sell into the market at multiple prices. There isn't a single number that a landlord can rent a unit out for in a given market.

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

#98

Post by waqf »

civilian wrote: post #92
Spooky23 wrote: post #58

Earlier quoted context omitted.

That’s a real stretch. End of the day, short term leases make rents float at the cost of making renters second class citizens who cannot stay in any one place or area. Rent control is a way to deal with that. It exists because voters care deeply about it.

But rent control only benefits the renters already in place. It hurts new renters to the area, by driving up costs. You've got to address a moral judgement you've implicitly made: What makes the current renters of a city more deserving than the future renters who might move to the city?

To be fair, GP did address that point: the current renters of a city have votes [in local government], and the future renters do not.

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

#99

Post by civilian »

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…

Yes! Another thing you could do is including the reasoning for a law, and have the review address that.

Like-- let's take on Oregon's statute banning self-pumping. Most of the reasons are safety related: https://www.oregonlaws.org/ors/480.315

It'd be cool to have a system where a private citizen would be allowed to file a lawsuit if they thought the justifications didn't have evidence. So the case would look at the justifications, and if the state couldn't prove that self-pumping wasn't more dangerous, the case would immediately remove the law.

One justification for banning self-pumping gas is that it's a jobs program. Except that that reason was never included in the original policy. So under my "challenge the law" framework, that couldn't be used as a defense, unless the Oregon legislature actually amended it.

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