well it's not a free market anyway, and supply has been severely constrained for decades, so I'm okay with not screwing renters
Wouldn't it make more sense to remove the supply constraint?
The redistribution of housing wealth caused by rent control (2023) [pdf]
121–130 of 161 posts
Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#122Earlier quoted context omitted.
That assumes rent controlled units actually benefit mostly the underprivileged. They don't. They create a strong incentive to keep a flat indefinitely. It's not unheard of for a person to continue renting a rent frozen apartment after they buy a house because the rent is so cheap - effectively it's a second home. There's also plenty of corruption. "Knowing a guy" is one of the best ways to get a rent controlled unit…
> "Knowing a guy" is one of the best ways to get a rent controlled unit since the wait time can be years. That's how military housing works. There's an underground "economy" of favors.
Are these "favors" rank-blind (i.e. does its hushhush-nature more-equalize the men, just trying to secure places to live)? Obviously officers and enlisted have different housing, but might an E-6 kiss an E-5's ass only on account of wanting his soon-to-be-vacated housing?
My background is non-military (with one each, officer & enlisted, brother).
Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#123Earlier quoted context omitted.
How do you quantify "incentive"? Is a landlord really looking at 5% lower property value and deciding it's not worth investing? Is this even true in aggregate?
It is a major paradigm in economics that if you change this by X% it will change something else by Y% and to estimate that ratio. It may be that people don’t really think that way: economic growth seems to be continuous and exponential in character whereas economic dislocations are discontinuous in character. I think of how I was absolutely shocked when a Big Mac meal was $10 during the pandemic (I think it cost abou…
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Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#124> This paper studies the effects of rent control on the housing wealth of renters, landlords, and homeowners. Over the nine months following the passage of rent control in St. Paul, Minnesota in 2021, average property values fell by 4.4% to 5.8%. This seems like too short-term a study. The argument against artificially holding prices down is that people won't produce as much as they would otherwise and people won't b…
easy work around for that btw: don't control new construction (unless it replaced controlled old construction. no demolishing and rebuilding just to avoid control)
Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#125Earlier quoted context omitted.
I lived there at the time. The George Floyd riots were in late May/early June 2020. I went to the protests by the police station in the Powderhorn neighborhood, that's the police station that got burned down. I got the hell out before that, though. Most of the damage was concentrated in Minneapolis, a little south of the river. But what happens in Minneapolis affects St. Paul, and vice versa. St. Paul wasn't unscathe…
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Neither was Anne Frank but we remember her. We remember victims of atrocities.
Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#126Earlier quoted context omitted.
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.
Trap is when it is too expensive to leave, so they put up with a lower quality of life, such as not being near their jobs.
If it's too expensive to leave, it's too expensive for someone else to move in too.
Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#127Reading the comments here is an exercise of patience. Why are we so uncreative of solutions to high rent?
Let's just do away with regular renting. Either provide the full service of a serviced apartment, or provide a rent-to-own scheme. In both cases, landlords have incentives to improve the condition of units for better price. In the former case, no equity is built, but you get a much better service, and in the latter case, renters can build equity. And if renters decided to back out halfway, they can sell the paid up equity back to the landlord, some other renter, or to banks who have the capacity to manage the numerous transactions that will happen.
Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#128Earlier quoted context omitted.
This makes me wonder if these cities are a good study subject in the first place. Is this a metro area with serious rental price pressure where rent stabilization is greatly altering the market conditions, or is housing so available to begin with that it’s more of a feel-good legislation that doesn’t shift prices around? It looks like from a quick search that over half of people in this metro area own their own home.…
I mean, it's no SF, but Minneapolis definitely has an affordability problem. Every major city does.
I disagree with your last sentence conceptually. It took me about 20 seconds to find a good condition 3 bedroom home in Cleveland, OH in a well-kept neighborhood for $150k.
https://www.zillow.com/homedetails/4122-W-145th-St-Cleveland...
A lot of the Midwest just doesn’t have housing pressure. Maybe Minneapolis does, maybe Columbus does, but a lot of the other cities do not.
Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#129Earlier quoted context omitted.
The current cohort of renters wins. All future renters lose, because the rent-controlled apartments are never re-leased. People sit on them forever. Price ceiling is the surest way in economics to create a shortage.
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…
You don't need to ask this question when you can readily observe a century of economic data on rent control. People do all kinds of acrobatics to avoid giving up their rent controlled apartments.
Why wouldn't they? They are locked in at a price that was frozen in time and can't increase. And there is a thriving black market for re-leased rent-controlled apartments. (black markets always occur when supply is artificially restricted).
You're posing a hypothetical that only happens in an alternate universe where the foundational ideas of economics and human behavior don't apply.
> A comparative shortage of rental properties and of landlords *could be very desirable*, as it implies more owner-occupiers.
Ok so 2/3rds of the way through your case you've already moved the goalposts. Here's a reality check for you: a dwelling is a dwelling, whether it is rented or owned. Rent control always and everywhere produces a shortage of dwellings. This hurts everyone.
Lower rent cannot be legislated any more than waterfront mansions for everyone can be legislated. It would be wonderful, if true. But it is not.
Re: The redistribution of housing wealth caused by rent control (2023) [pdf]
#130what is the impact on housing cost as a percentage of income? the whole point of rent control is making it cheaper to live in the city and prevent people from going homeless. working class wealth going down is a negative side effect but its impossible to avoid when most of the countrys net worth is tied up in real estate, and its probably still worth it.