How Rent Control Drives Out Affordable Housing • Hacker News Board

Re: How Rent Control Drives Out Affordable Housing

#121

Post by calambrac » Wed, Dec 31, 2008, 7:30 AM UTC

natrius wrote: post #118

calambrac wrote: post #114

Earlier quoted context omitted.

"You think ALL property owners in NYC are unwilling to sell? You think ALL builders/landlords are unwilling to build investment properties, and are unwilling to sell to those who will?" No, when did I say anything that implied that? "You claim that builders are not greedy enough to create new housing in response to market demand, or that there are other monopolistic factors preventing this. Yet for some reason, they…

"Yeah, people moving into expensive areas and bidding up rent prices generally aren't wealthy, my bad." My impression was that in a housing market without rent control, people are displaced by periodic, incremental yet substantial increases in rent, not a one-time multiplication of rent. If that's the case, then it's not an issue of the poor being displaced by the wealthy. It's people being displaced by others who ar…

You're right, I'm not taking the poorer people who want to move into account. I'm not an anti-market housing zealot. The only thing I'm saying is that the human cost of displacement seems to me to be large enough that we should be willing to sacrifice market rents for people who have been living in an area that's becoming expensive to live in. The people who create the value should have the first shot at enjoying that value, it shouldn't be arbitrarily handed over to the wealthy.

Re: How Rent Control Drives Out Affordable Housing

#122

Post by dk » Wed, Dec 31, 2008, 7:32 AM UTC

calambrac wrote: post #120

dk wrote: post #116

Earlier quoted context omitted.

Based on your other comments, I don't think wild market fluctuations are really the issue here, are they? If they somehow disappeared, would you yield rent control to accommodate broad market trends?

Rent control only exists in places where wild market fluctuations were displacing people.

Is that a "yes"?

Re: How Rent Control Drives Out Affordable Housing

#123

Post by pelle » Wed, Dec 31, 2008, 7:55 AM UTC

pg wrote: post #35

davidw wrote: post #23

Earlier quoted context omitted.

Import tariffs and subsidies are direct market manipulation, and the market doesn't really route around them. Rather, they tend to wreck markets, which is one reason many developing countries continue to press the US and Europe to end farm subsidies - it's wrecking their export markets and hurting their farmers. Governments, when they want to, are perfectly capable of interfering with markets and even destroying them…

Tarrifs are actually a particularly good example of markets routing around government interference. Routing around tariffs is called smuggling, and has been a huge business as long as there have been governments. I wasn't claiming, incidentally, that markets were totally immune to government interference-- just as networks are not immune to damage. Just that markets will always find whatever room you give them.

Tarifs are indeed an excellent example. Another great example is how too much red tape forces businesses underground in the developing world.

The economist Hernando De Soto http://ild.org.pe/en/home has done studies in many different countries proving this and theorizes that this is one of the main reasons poor countries stay poor.

Re: How Rent Control Drives Out Affordable Housing

#124

Post by pelle » Wed, Dec 31, 2008, 7:57 AM UTC

gnaritas wrote: post #86

pelle wrote: post #82

Earlier quoted context omitted.

Health is no different than other services in 99.9% of the cases. We should not optimize the entire system for that 0.1% of cases. The market optimizes everything for the better if it is allowed. For the exceptions, use exception handling also known as charities such as non profit hospitals and health centers who already donate health care to the poor. The increased efficiency and lower cost of a non regulated approa…

> The market optimizes everything for the better if it is allowed. Baloney. This is a belief, not a fact.

It is a fact that any transaction between two people that is not distorted in any way by outside parties will leave both parties better off.

Re: How Rent Control Drives Out Affordable Housing

#125

Post by JeffL » Wed, Dec 31, 2008, 8:02 AM UTC

benl wrote: post #67

gnaritas wrote: post #54

Earlier quoted context omitted.

Health is very different from other services, profit should not be the goal. Business does not attempt to help people, but to maximize profit, which does not necessarily mean increasing availability or lowering prices at all. It might be more profitable to dump the lower income people and jack up the prices on those who can afford it. Unlike other industries, getting service is often a literal life or death issue, yo…

Profit is the world's way of signaling that you are doing something in an efficient, effective, and long-term sustainable way. So, given that health care is one of the most fundamental individual needs, profit most definitely should be the goal. But health care is not the most fundamental need -- that would be food. I find it puzzling that people don't apply the same arguement to this need. Why not say that profit sh…

I wish I could upvote this comment more than once -- I think it is dead on.

Profit is the creation of value. If there's no profit, then there's no value added.

Profit works great for food, shelter, clothes, heat, and most every basic human need.

I think what really messes up the healthcare market is that the more that technology progresses, the more sophisticated and expensive treatments we discover. The cost and effectiveness of treatments are both soaring, yet people whose means are not rising as fast feel entitled to the best health care no matter what. I think as technology advances, things will only get more distorted until we realize that everyone should only get what they pay for (or what their insurance that is correctly priced by the market will cover and pay for.)

Re: How Rent Control Drives Out Affordable Housing

#126

Post by calambrac » Wed, Dec 31, 2008, 8:06 AM UTC

dk wrote: post #122

calambrac wrote: post #120

Earlier quoted context omitted.

Rent control only exists in places where wild market fluctuations were displacing people.

Is that a "yes"?

Why would I yield something that doesn't exist? But, sure, okay, yes, I would be willing to yield rent control in the situation where it wasn't necessary to prevent displacement. I guess I miss your point?

Re: How Rent Control Drives Out Affordable Housing

#127

Post by pelle » Wed, Dec 31, 2008, 8:12 AM UTC

gnaritas wrote: post #88

pelle wrote: post #85

Earlier quoted context omitted.

In almost all cases profit helps us all. A free exchange benefits all parties. You have something I want, I have something you want. When this situation gets distorted through monopoly or other forms of regulations it is generally speaking bad for everyone. Greed is good. My greed is good for you and your greed is good for me. This is the most fundamental philosophy of entrepreneurship albeit said using a word most p…

The world isn't that simple and by the way, monopoly is a natural outcome in a free market system exactly because it doesn't always work. It breaks down, that's why we regulate it. The only place the free market actually works is in libertarians imaginations because they think Atlas Shrugged somehow reflects reality.

You do live in a strange world very distant from the one that most of us readers of Hacker News lives in.

Name me one real monopoly that isn't enforced through "social engineering". A free market may have ocasional dominant market leaders like IBM and MS in their time and Google today. None of them are or were monopolies as better technologies and startups will always (lets repeat that word ALWAYS) come around as long as they are allowed.

True monopolies like the telecoms monopolies in many countries are not outcomes of free markets, but rather more or less corrupt deals between governments and a little group of businesses. Most often the monopoly is argued as a way to protect the consumer.

The free market works wonderfully in many different places in the world and in many different aspects of our daily life. Banking, telecoms and health care are not examples of this as they are heavily regulated. Most of us readers of hacker news are doing what we are doing because of the wonders of the free market.

If not we would be marching fists held up high to Washington demanding the creation of the National Department of Internet Services, to give us lifelong employment. Yet we aren't doing that. The free market works great even though our chosen field has been hit by many different bubbles and failures. The market has picked right up with no real government interference (except for financial and gaming fields) and will continue to improve.

Spare me the old marxist marching chants (I should know what they sound like as I used to be one).

Re: How Rent Control Drives Out Affordable Housing

#128

Post by jacobolus » Wed, Dec 31, 2008, 8:37 AM UTC

pelle wrote: post #119

jacobolus wrote: post #107

Earlier quoted context omitted.

> For an extreme example, see Cuba, where social engineering routed the market, with results that are disastrous in many ways. Disastrous for whom? Compared to what? Cubans have a high literacy rate, high life expectancy, low numbers of extreme poor, etc. Indeed, the country has done much better than similar Caribbean/Latin American states which followed different political paths over the past few decades. The govern…

Low numbers of extreme poor? You have followed a bit too much propaganda and not enough reality it seems. The only country that is worse off in the entire region is Haiti. Probably more than 90% of the population is in extreme poverty. Worse than this Cubans was actually better off than most Europeans before Castro. They may have more doctors per capita now a days, but there is no food and no medicine.

> The only country that is worse off in the entire region is Haiti. Probably more than 90% of the population is in extreme poverty.

This is completely false. Haiti is indeed much much worse off than the rest of the region, but Cubans have higher purchasing-power parity than Jamaicans, Guatemalans, Nicaraguans, Hondurans, Salvadorans, and perhaps a few others, and the country is generally much more equal most Latin American countries, so the bottom couple of quintiles in Cuba do better than their counterparts in Costa Rica, Panama, etc. (or I believe than poor Mexicans, for that matter)

It's still overall a poor country, and has many social, economic, and political problems—attributable to many factors, including ineffective leadership, widespread corruption, the US trade embargo, etc.—but the claim that all of Cuba's problems are the fault of the turn away from markets is so oversimplified as to just be wrong.

> Cubans was actually better off than most Europeans before Castro

This is bullshit. In the 50s, Cubans did a bit better than Southern and Eastern Europeans, but were significantly behind Western Europe.

Most Cubans were were not very well off in the first half of the century, and incomes (and equality particularly) rose substantially between 1960 and 1989. Then after the fall of the Soviet Union, there was a precipitous economic decline in Cuba between 1989 and about 1993 or 1994, which took 12 years to fully recover from. Present-day Cubans have higher real incomes than they ever did in the past, however.

Listen, I don't really want to have a protracted he-said-she-said about the state of the Cuban economy or the precise definition of "extreme" poverty. My point was merely that davidw's off-hand remarks about the topic were trivializing and unproductive.

Re: How Rent Control Drives Out Affordable Housing

#129

Post by dk » Wed, Dec 31, 2008, 8:40 AM UTC

calambrac wrote: post #126

dk wrote: post #122

Earlier quoted context omitted.

Is that a "yes"?

Why would I yield something that doesn't exist? But, sure, okay, yes, I would be willing to yield rent control in the situation where it wasn't necessary to prevent displacement. I guess I miss your point?

I asked if you would yield price controls, which certainly do exist, and I was curious whether wild market fluctuations were pivotal to your position. I'm assuming this is why you haven't addressed the essence of my point.

Re: How Rent Control Drives Out Affordable Housing

#130

Post by calambrac » Wed, Dec 31, 2008, 9:02 AM UTC

dk wrote: post #129

calambrac wrote: post #126

Earlier quoted context omitted.

Why would I yield something that doesn't exist? But, sure, okay, yes, I would be willing to yield rent control in the situation where it wasn't necessary to prevent displacement. I guess I miss your point?

I asked if you would yield price controls, which certainly do exist, and I was curious whether wild market fluctuations were pivotal to your position. I'm assuming this is why you haven't addressed the essence of my point.

I haven't addressed the essence of your point because I don't know what it is.

Rent control only really exists in large cities that have experienced wild market fluctuations (in the form of surging rent prices) that displaced renters.

If there weren't surging rents displacing people, why would there be rent control? In that case, I would yield them... but in that case, they wouldn't have existed in the first place. So I still miss your point.