The redistribution of housing wealth caused by rent control (2023) [pdf]

Post by jjav » Sun, Jun 14, 2026, 6:47 AM UTC

tverbeure wrote: post #7

heylook wrote: post #6

Earlier quoted context omitted.

> But I doubt the impacts of rent control would appear in the market this quickly, it'd take years for the market signals to be measurable. Hard disagree. Rational investors have no problem whatsoever projecting the impact to future cash flows and adjusting the amount they're willing to pay now. That's like saying the stock market wouldn't respond quickly to changes in next year's tax law.

I think you're wildly overestimating the rationality of investors.

Post by danaris » Sun, Jun 14, 2026, 6:58 AM UTC

uoaei wrote: post #91

WalterBright wrote: post #84

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[flagged]

No, it's not a law in the same way as physical laws. Most of the failures in economics of the past 50 years can be mostly directly attributed to a fatal overcommitment to the belief that these attributed relations are incontrivertible. What really exists, closest to the limit we will call "hard science" or "physics", is the microcosmic focus on individuals interacting in a market. Everything else -- supply and demand…

Post by jjav » Sun, Jun 14, 2026, 7:02 AM UTC

aurareturn wrote: post #92

WalterBright wrote: post #86

Earlier quoted context omitted.

> Rent control benefits the people who are already there Not always. It can trap the person in the apartment, such as constraining where they can work.

It can't trap the person in the apartment because they can leave at anytime. "Trap" here means the deal is so good that they don't ever want to leave.

Post by Nursie » Sun, Jun 14, 2026, 7:05 AM UTC

Plasmoid wrote: post #88

Nursie wrote: post #66

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Why would they sit on them? Surely they are more likely to sell if they can never be leased profitably? This would put that capital to better use. Your assumption there is also that the class of ‘renters’ is homogenous and wants to rent. In some cities there is a significant class of people who are forced into continuing with renting because of supply constraints on homes for sale, which are exacerbated by landlords…

What happens is that economics shift from a renewable model to an extractive model. Farms are renewable so farmers maintain them over centuries. Mines are extractive so they get pumped and dumped. What landlords do in these situations is try to extract as much money as possible before the enterprise collapses, either literally or figuratively. New housing doesn't come online quickly so both quality and quantity fall.

Post by AnthonyMouse » Sun, Jun 14, 2026, 7:06 AM UTC

linkregister wrote: post #102

AnthonyMouse wrote: post #47

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> Rational investors have no problem whatsoever projecting the impact to future cash flows and adjusting the amount they're willing to pay now. That's not accounting for the time value of money. Suppose you have a rental unit and before rent control you were planning to rent it out. That now has far less attractive returns and it suddenly makes more sense to sell it as a condo to an occupant rather than keeping it to…

This argument presupposes multiple levels of assumption. By the point where the assertion is made that construction costs would drop, the prediction's error bars equal the entire range. There's no reason to believe that construction companies would accept jobs at prices below the cost of materials and labor. Construction companies frequently let workers go rather than accept large negative cash flows.