San Francisco Landlords may lose everything [video]

In general competitive pressure makes things better. If you can choose between two things that are similar but one costs less, you can save money. If they cost the same but one is better, you can choose the better one. The easier it is for you to switch, the less the provider can get away with before you do.

Governments have weak competitive pressure. You have to uproot your whole life and move to another jurisdiction. When you vote, you're making a choice about every issue under the sun at once and it's impossible to change your vote on only one issue by itself. You can also easily end up "represented" by the candidate you voted against. As a result they're extremely inefficient by default and should only be used when the alternative is catastrophic.

This is doubly true in markets that could be competitive, because the incumbents have the incentive to use the government to reduce competition so they make more money. The obviously relevant example is zoning rules that restrict housing supply. It's critical to not allow that to happen, or to undo it when it already has.

Trying to cancel it out with even more regulations is just another opportunity for incumbents to sneak in some new way of screwing you. When you screw up a market this badly, people get desperate and angry and start proposing all kinds of aggressive "solutions" because they fail to understand the cause of the problem but want something done about it. The most ridiculous of these are generally filtered out, but the ones that make it through are the ones that don't work or make it worse because those are the ones the incumbents fight the least.

You have to fight the cause of the problem, which is a government captured by land owners imposing rules that make housing more expensive. The solution is to remove those rules.

> There are widely published opinions that state this just makes landlords richer and housing rarer to further deregulate.

One of the main reasons "deregulation" has a bad name is that its purpose is to increase competition and lower prices, which is exactly the thing the incumbents don't want, so instead they propose a "compromise" that prevents exactly the thing you're trying to get.

For example, suppose you have two rules. One says that new housing construction is utterly prohibited, the other says that all rental properties must have working plumbing.

In a competitive market the second rule is inefficient because all it really does is prohibit anyone from offering a storage unit with no plumbing. There would be enough apartments with running water that nobody would have any reason to consider one that didn't.

But in a market where increasing the housing supply is inhibited, there are more tenants than rental units and that allows abusive slumlords to find tenants willing to live under such conditions.

Much "deregulation" is the corruption in which you only remove the second rule and not the first, which of course makes things worse, because the first one is the one that matters and the second one is just an inefficient attempt to mitigate the damage.

Increase the housing supply until rents go down. Accept no substitutes.

It isn't anything special. Lots of big companies now accept WFH 3 days a week. The other 2 days they arrange company shuttles for those people so it is much easier now.

Your example of $100/month is ridiculous hyperbole. More like $4000 in SF and $2000 in San Jose. If I have to choose between an extra 4h a week driving but saving $500 per week, then I will do it.

And have you thought about what else I would invest into?

This attitude is so incredibly economical illiterate that it’s shocking we have HN commentators that don’t understand.

Who I am selling to? at what price? Do you support state confiscation of private capital?

Are factories that produce cereal next?

It’s an embarrassment to western education that educated people have such poor understanding of basic economics.

Software can't defeat supply and demand unless you have a monopoly.

Suppose the amount rents have to hit before it's profitable to build a new building is $1000/month and right now rents are at $990/month. A cartel representing 70% of the landlords in the city collude to raise rents to $2500/month.

If they're allowed to, builders will keep building new housing until rents are back below $1000, because until that point they can keep making money by doing it. Even if they have to increase the housing stock in the city by the entire 70% and leave the cartel with a bunch of empty buildings.

But if they're not allowed to build, prices go up. And some entity with a profit cap can't do anything about it because they have no path to supplying enough housing to lower the market price.

Plenty of people do, but zoning rules make it expensive.

Suppose you want to build a 20 story condo. The most efficient thing to do is to find an empty plot of land or a single family home and build it there, but that's prohibited by zoning. 20 story buildings aren't allowed there.

Now what you have to do is find an existing 10 story condo and knock that down, because it's in a place zoned for tall buildings. But that costs a lot more, and you also have to remove all the people who are already living there instead of just buying one house from someone who is already moving. It's so much more expensive than the first thing that it's not profitable, so it doesn't happen without a subsidy. Not only that, even if it does happen, you've now paid to build a 20 story building and only added 10 stories worth of housing.