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

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

#141

Post by WalterBright »

rickydroll wrote: post #137
WalterBright wrote: post #76

Earlier quoted context omitted.

> Sadly, the billionaires would be untouched. Why would you conclude that? Billionaires have their money invested in the same things as your 401k, etc.

When you have billions, you have so much margin for loss that it would not materially affect your life; if you lose 80% of your wealth, you can still survive and continue rebuilding it. Whereas if you've got 1 mil in your 401k and you lose 80% of that, well, you're f-ed for retirement.

Nobody is making you invest in the market.

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

#142

Post by WalterBright »

ProllyInfamous wrote: post #122
WalterBright wrote: post #72

Earlier quoted context omitted.

> "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).

Rank does give one priority, but reciprocal favors still play a large role.

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

#143

Post by WalterBright »

usernametaken29 wrote: post #82
WalterBright wrote: post #63

Earlier quoted context omitted.

The key to understanding the effects of rent control is understanding the Law of Supply and Demand. Artificially holding down rents will result in housing shortages. The lower the rent controlled price, the worse the shortage. If the rent goes too low, the building owner will stop doing maintenance. Eventually, the building gets abandoned.

Then again we have high rates of abandoned or unused housing as investment properties that sit idle even with uncapped markets… might as well cap the market if the effect is the same but people pay less rent

If you look closer, it's still Supply & Demand ruling.

Housing is unused when the revenue from rents is less than the cost of taking care of the renter. Renting out a place can have high costs, like having a bad renter.

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

#144

Post by WalterBright »

stymaar wrote: post #140
WalterBright wrote: post #108

Earlier quoted context omitted.

> The shortage of affordable housing has nothing to do with rent control Oh, it absolutely does. The abandonment of rent properties in NYC is ample evidence.

The point of the comment you're responding to is that shortage of affordable housing is ubiquitous, and you can't blame rent control on that in most places (which don't have rent control in the first place). I don't think rent control is the most efficient solution to the problem, but believing it's a greater problem than the status quo is delusional. The status quo suck, and it mostly sucks because over the past 30…

Nobody has ever found a better way to manage housing than the free market.

In the past 30 years, the government has never been more involved in zoning and regulation of housing.

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

#145

Post by WalterBright »

danaris wrote: post #103
uoaei wrote: post #91

Earlier quoted context omitted.

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…

No, no, see, of course it's a law! Now, I'll explain it to you: First, assume a spherical economy in a frictionless vacuum... (/s)

Yah, I'm old and I've heard that joke my entire life.

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

#146

Post by ianm218 »

rickydroll wrote: post #136
ianm218 wrote: post #87

Earlier quoted context omitted.

I think your model is off. If single family homes got rezoned to allow large complexes near trains, those plots of land would be worth more and it would likely be worth it for the people living there to eventually sell to developers. This doesn't require the city or state buying anyone out. In the greater boston area NIMBY's are incredibly effective and will pull out every stop. I.e. instead of designating normal are…

Thank you. I hadn't even thought about the prices of property. To get an idea of what property costs would be in an area I'm familiar with, I looked on Zillow at properties around a couple of train stations in Weston. Looking at one of the train stations in a lower-priced section of Weston, properties within walking distance of the stop go for roughly $2 million per acre, according to Zillow. Given what happened to t…

The point is just to increase housing supply not create “affordable housing”. Right now there is massively more demand than supply, so any incremental unit is still very expensive. We’ve strangled housing supply for so long that it seems like the only way is for the state to come in and do rent control.

We start allowing supply again and the less desireable places on the commuter rail i.e: Brockton/ bridgewater/ Randolph get truly affordable over time, “top” destinations like Weston housing price growth stalls out at least.

I’ve never seen an area more adverse to economics 101 than Boston.

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

#147

Post by WalterBright »

aurareturn wrote: post #126
WalterBright wrote: post #104

Earlier quoted context omitted.

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.

Peoples' circumstances are all different.

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

#148

Post by WalterBright »

uoaei wrote: post #113
WalterBright wrote: post #106

Earlier quoted context omitted.

The supply and demand curves are different for every person and every business. That makes it complicated - but not wrong.

That's what makes it a model, not a law.

Governments are perpetually trying to repeal that law. All attempts have failed.

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

#149

Post by WalterBright »

WalterBright wrote: post #143
usernametaken29 wrote: post #82

Earlier quoted context omitted.

Then again we have high rates of abandoned or unused housing as investment properties that sit idle even with uncapped markets… might as well cap the market if the effect is the same but people pay less rent

If you look closer, it's still Supply & Demand ruling. Housing is unused when the revenue from rents is less than the cost of taking care of the renter. Renting out a place can have high costs, like having a bad renter.

BTW, rentals can also remain unrented because if the landlord rents it at the current rental rate, rent control laws may force him to maintain that low rent for the long term.

Hence, it is less risky to just leave it vacant.

Rent control has all kinds of self-defeating consequences.

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

#150

Post by danaris »

WalterBright wrote: post #145
danaris wrote: post #103

Earlier quoted context omitted.

No, no, see, of course it's a law! Now, I'll explain it to you: First, assume a spherical economy in a frictionless vacuum... (/s)

Yah, I'm old and I've heard that joke my entire life.

And yet, you still think that Econ 101 is as far as those courses go...perhaps it's true that you can't teach an old dog new tricks.
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