Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

sf.curbed.com

Post reply on HN
Print view View original

151–160 of 326 posts

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

#151

Post by classwarsteve »

AnimalMuppet wrote: post #136
classwarsteve wrote: post #37

Earlier quoted context omitted.

>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.

> Simple reliance on a profit model for housing is never going to adequately meet housing needs. Can you give something to justify that statement, something more than just a bare assertion? To me, it looks like reliance on something other than the profit motive (that is, rent control) is what's causing the problems here.

A start would be the pervasiveness of homelessness throughout the history of the United States as contrasted with its abolition in the USSR and its dramatic return with post-soviet privatization.

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

#152

Post by mjevans »

kemiller wrote: post #133
michaelchisari wrote: post #18

Earlier quoted context omitted.

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.

Would you rather have rent control, or just lower rents overall? For the sake of argument. Because that's the thesis: rent control is partially responsible for the out of control rents.

I would rather see rents controlled in an area by requiring that sufficient housing is built.

Address the issue with more supply.

(At a livable standard of living, including proper sound isolation and fresh air, and even a space for vehicle storage* because people need to leave the city some time... *: Having an in city goods and services transport layer in weather controlled environments that leads to peripheral IO structures such as mega parking garages is fine.)

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

#153

Post by nerfhammer »

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…

The term for this is called "labor mobility".

Instead of increasing commute times, more typically it involves simply not taking jobs that are further away.

Restricting labor mobility is really bad for obvious reasons: people not being able to move where the jobs are means jobs not being filled even as unemployment increases. There is overwhelming evidence that labor mobility has gotten drastically worse in recent decades, and local NIMBYism is one of the major causes: http://neighborhoodeffects.mercatus.org/2017/01/26/why-the-l...

Compare this to China, which has had tens of millions of people flock to brand new megacities for the new job opportunities there.

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

#154

Post by jules »

noobermin wrote: post #138
paulgb wrote: post #21

Earlier quoted context omitted.

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.

Wouldn't the fix be to stop the slimey ones from "encouraging" people to leave in the first place? It sounds like blaming the game rather than striking out against those who abuse it.

It's not a question of blame, it's a question of the results of a particular policy. Rent control creates an incentive for landlords to bully their tenants. You can create another government agency to police this, but in reality that is extremely difficult because you can do a lot of bad things legally, and trying to police that will have negative unintended consequences in itself. It also causes bad behavior that would be impossible or incredibly undesirable to police, such as simply neglecting the state of the housing and shared spaces. We've already learned decades ago that rent controlled housing rapidly deteriorates.

Perhaps another example: the drug war. Making marihuana illegal creates criminal activity other than just selling it. You could say "okay, so just police that", but that's not so easy in the real world, and we've seen the negative consequences of attempting it.

A lot of problems would be solved if politicians thought less about the intentions of their policies and more about the incentives those policies create. Too many policies make bad behavior rational. Even worse is that once you do that it's not just that good people start behaving badly, but also that bad actors out compete the good ones. A good policy aligns self interest with the common interest.

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

#155

Post by [deleted] »

nerfhammer wrote: post #153
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…

The term for this is called "labor mobility". Instead of increasing commute times, more typically it involves simply not taking jobs that are further away. Restricting labor mobility is really bad for obvious reasons: people not being able to move where the jobs are means jobs not being filled even as unemployment increases. There is overwhelming evidence that labor mobility has gotten drastically worse in recent dec…

[deleted]

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

#156

Post by seanmcdirmid »

nerfhammer wrote: post #153
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…

The term for this is called "labor mobility". Instead of increasing commute times, more typically it involves simply not taking jobs that are further away. Restricting labor mobility is really bad for obvious reasons: people not being able to move where the jobs are means jobs not being filled even as unemployment increases. There is overwhelming evidence that labor mobility has gotten drastically worse in recent dec…

China is a bad example with its hukou system in place. Sure you can migrate to the city for a better job but you have to leave your kids behind (no public school without hukou). Labor mobility but at great costs.

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

#157

Post by mywittyname »

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…

The population has grown such that urban areas have far less acreage per person than they use to, so there's more competition for housing in that neighborhood.

Plus, income distributes follow a pareto distribution: in DC a 60th percentile family earns between ~35% more money than an 50th percentile family does, and a 70th percentile family earns ~35% more than a 60th family does, etc.

Those two factors are behind the explosion in housing prices around the nation. The same number of people can afford to pay substantially more for housing than they could previously. When you were growing up, your parents were competing with median income families for housing. But today, you're competing with ~70th percentile families for the same housing (per your income assessment).

The solution is to tear down low-density suburbs and replace them with high density residencies. But there's no incentive to do this because people are more than willing to just spend more time commuting so they can have a yard to mow on the weekends.

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

#158

Post by icelancer »

noobermin wrote: post #123
icelancer wrote: post #114

Earlier quoted context omitted.

>>landlords trying to get tenants of rent controlled units to leave in order to get market rates. That seems like the issue. This is a simple incentive. To expect landlords not to act in this manner is to ignore Economics 101. If you design policies and laws in such a manner that rational actors will... act rationally... and this is bad, then the problem is how you designed the laws, not the rational actors - no matt…

Let's teach our daughters not to wear short skirts, because that increases the chances they'll be raped. Sounds like a similar argument. With less hyperbole, you can use this argument regarding externalities involved in capitalism from the exploitation of workers to pollution of rivers. The way you change incentives is you add regulation. Regardless, this thread is floating away from my point. No one is addressing th…

It's not the same argument in the least; it's just shock value nonsense you're pedaling in hopes of coming up with relevancy.

>>which is really discouraging and fits with the trend of discourse on HN for the last year or so.

Yeah, the guy who is posting terrible rape analogies is the guy I trust to judge what is or isn't discouraging with regards to the value of discourse on this website.

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

#159

Post by icelancer »

linkregister wrote: post #121
icelancer wrote: post #109

Earlier quoted context omitted.

No, not exactly. In the scenario above, the landlord obviously has to keep the property vacant for some time at $5000/month, much longer than at $3000/month. But because it is a near-certainty the real price would go to $5000/month in 5 years - but he is unable to increase rent to that if he rents out today at $3000/month due to rent control (and this is critical) - he would rather keep it vacant until someone comes…

I was going to refute your (uncited) comment, but it appears that San Francisco's vacancy rate has increased from 4.9% to 8.3% over ten years, affirming your position. http://www.bayareacensus.ca.gov/counties/SanFranciscoCounty....

There's really no citation available so to speak for my comment, unless you want citations in Economics texts. It's fairly rational activity by landlords (or anyone who has controlled supply of any good/service) to take. The vacancy rates aren't surprising to me but there are other effects that cause that number to rise/fall, not just rent control (though the arrow is in the expected direction based on policy).

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

#160

Post by jules »

classwarsteve wrote: post #151
AnimalMuppet wrote: post #136

Earlier quoted context omitted.

> Simple reliance on a profit model for housing is never going to adequately meet housing needs. Can you give something to justify that statement, something more than just a bare assertion? To me, it looks like reliance on something other than the profit motive (that is, rent control) is what's causing the problems here.

A start would be the pervasiveness of homelessness throughout the history of the United States as contrasted with its abolition in the USSR and its dramatic return with post-soviet privatization.

Why don't you start a communist commune? You can do that in a capitalist system. You can't set up a capitalist commune in a communist system because they'll put you in the gulag.
Post reply on HN