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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

#161

Post by arebop »

Y7ZCQtNo39 wrote: post #145
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…

Are there that many people in rent-controlled apartments for this to be a serious enough issue or cause of traffic?

A third of rentable dwellings in San Francisco are rent-controlled, so yes.

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

#162

Post by CryptoPunk »

knodi123 wrote: post #103
DougN7 wrote: post #91

Earlier quoted context omitted.

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.

> UBI - it will surely have huge second-order effects I absolutely agree, and I think these justifiable and yet ill-defined concerns are shared by a lot of UBI opponents. I just hope anyone trying to come to an informed decision remembers to include unrestrained capitalism's second-order effects on the pro/con list.

>>unrestrained capitalism

It sounds scary when put like that but it just means people free to interact, while secure from other social actors in their person and property. By the nature of voluntary configuration, interactions have a tendency toward being mutually beneficial, and there are corrective feedback loops that naturally exist in a voluntary society to reduce those that aren't (e.g. scammy operators increasingly excluded by increasing consumer vigilance and growing reputation markets).

And you can still have governments provisioning economic resources that qualify as public goods, like basic research, public information resources, policing and national defense, in such a setting, so there is no fundamental deficiency in unrestrained capitalism, aka an absolute free market.

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

#163

Post by paulgb »

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.

Better enforcement might help, but even if everyone is acting in good faith you'd still expect to see a higher incidence of condo conversations and Tenancy in Common simply due to Coase.

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

#164

Post by cjalmeida »

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.

Likely because being homeless in USSR was a crime and motive to send one to a Gulag?

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

#165

Post by jclulow »

hardtke wrote: post #105
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…

Another second order effect is the reduced supply of family sized units. Many 3+ bedroom units are occupied by older couples and single people who raised their kids there and no longer need the space but would find it much more expensive to downsize. This drives families out of the city (among other things). Prop. 13 solves this by allowing people older than 55 to transfer their property tax break to a smaller house.

Prop. 13 also creates problems with housing supply for people who haven't yet been able to transition to home ownership. It's difficult to strike a good balance here.

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

#166

Post by cjalmeida »

ddebernardy wrote: post #135
cowsandmilk wrote: post #97

Earlier quoted context omitted.

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 microeconom…

So... in other words, what you're missing is a punitive tax on vacant property, as an incentive to rent asap - at any price.

Keep adding obligations to landlords to the point no one wants to be one. Then, if you can't, for any reason, secure a mortgage your only alternative is homeless. Sounds like a good idea.

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

#167

Post by xster »

Basically it's like a progressive tax system. How the income is sourced doesn't affect the budget expenditure in the end. And instead of varying on your income bracket, it varies on how early you got in the queue, which has nothing to do with fairness.

i.e., if you want to change the budget expenditure (how many people live in SF), shifting how the budget income is sourced wouldn't help.

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

#168

Post by AndyMcConachie »

It really does take an American economist to come up with the idea that price controls drive prices up.

"And that in turn prevents flight from San Francisco itself. “We find that absent rent control essentially all of those incentivized to stay in their apartments would have otherwise moved out of San Francisco,” note the economists. Yikes."

This is like saying that had demand decreased prices would also have decreased. Well duh. The more people you price out of SFO the cheaper it gets. You could also increase supply if the people living there weren't such assholes. I'm so glad I left the Bay area with its fucked up politics and other assorted BS.

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

#169

Post by xster »

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…

Couple the labour immobility with capital extreme mobility and you get the capitalist's wet dream: lower labour costs.

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

#170

Post by noobermin »

jules wrote: post #154
noobermin wrote: post #138

Earlier quoted context omitted.

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 wo…

You're going to have to help me. I don't know what you mean by "bad behavior that would be[...]undesirable to police." It seems very abstract, and because of that, is less than convincing. Please give me an explicit example of that.

For example, how does, "rent-control => neglect the state of housing" That happens already without rent-control.

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