Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

rhawa.org

Post reply on HN
Print view View original

151–160 of 161 posts

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

#151

Post by stymaar »

WalterBright wrote: post #144
stymaar wrote: post #140

Earlier quoted context omitted.

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.

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

That's just a religious belief of yours. And it's especially off the mark on the “free” part: you can't have a free market for housing, ever, because barriers to entry are always going to be high (and sometimes impossibly high for geometric reasons; there's just so much coastline for instance), and housing is very much not a commodity.

On the flip side, mixed systems in places in most of Europe for several decades after WWII and they were immensely successful. Housing was way more affordable and available back then despite fast growing population and rapidly evolving housing standards that forced owners to constantly invest in their properties to upgrade them.

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

#152

Post by aurareturn »

WalterBright wrote: post #147
aurareturn wrote: post #126

Earlier quoted context omitted.

If it's too expensive to leave, it's too expensive for someone else to move in too.

Peoples' circumstances are all different.

I would never describe someone as "trapped" for paying below market rate in rent.

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

#153

Post by cwnyth »

cwnyth wrote: post #39
jhallenworld wrote: post #25

When Boston ended rent control in the late 90s, all of the sudden the landlords invested in their goldmine buildings and generally improved the city. It sucks for those trying to rent or buy (including me, I paid 60% more for a house in 2002 than what it was worth in 1996), but the city has certainly had a renaissance. IMHO, the problem now is bad zoning. The rich car-centric suburbs are preventing denser housing- to…

This is why you need a two prong approach: city-led redevelopment or redevelopment incentives on top of rent stabilization. Boston is not rapidly growing new housing relative to the number of people who are trying to live there. The median rent price per capita of the Boston metro is much, much higher than NY metro, nearly 4x in fact.[1] Boston should not be as expensive as New York, when the latter has rent stabiliz…

I also happened upon this discussion, which claims the exact opposite of the original claim: Massachusetts, despite not having rent control, is dead last in building new housing.

https://www.reddit.com/r/boston/comments/1tc7fqz/yes_we_are_...

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

#154

Post by vlovich123 »

verteu wrote: post #93
dmurvihill wrote: post #77

Earlier quoted context omitted.

Collecting rent maps exactly to that definition.

It does not, as explained in the section "Are Landlords Rent Seekers?" "Rent seeking" is more about making money by changing the rules instead of providing a service.

No, if you charge rent but aren’t actually investing meaningful capital in the property (most apartment building landlords do not in my experience), then that meets the definition of rent seeking.

From Wikipedia:

> Rent seeking, according to the Georgist, does not include those persons who have invested substantial capital improvements in a piece of land, but rather those who perform their role as mere titleholders.

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

#155

Post by superfrank »

jmyeet wrote: post #111
superfrank wrote: post #83

Earlier quoted context omitted.

> In theory landlords would be looking to petition for eviction but that's usually not what happens. For a small time landlord, a good tenant is worth their weight in gold. It's not worth chasing out a reliable tenant you have a good history with just to try to squeeze a few extra bucks out of the property.

I don't think you appreciate the scale of the discount on market rates. If you've lived somewhere for 30+ years, you might be paying $400/month for something that would now be $8000/month. In NYC, they stopped giving out rent control leases in 1971. What you see advertised now are rent-stabilized (which is what rent-controlled apartments became once vacated). Those are two entirely different things however. But, rent…

I don't think you appreciate how much time, money, and energy a really bad tenant and an eviction can cost.

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

#156

Post by usernametaken29 »

WalterBright wrote: post #149
WalterBright wrote: post #143

Earlier quoted context omitted.

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.

Or you just force people to rent out vacant flats. You have 60 days once a formal letter is received and you have to rent it to someone in that time, or you’ll be fined. That’s one way to force supply of a good that isn’t actually scarce but has artificial scarcity. Worked pretty well in some of the European metropolita and it works in New York now too. We have to stop treating housing like a simple commodity

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

#157

Post by Nursie »

tjwebbnorfolk wrote: post #129
Nursie wrote: post #66

Earlier quoted context omitted.

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 artificia…

> People do all kinds of acrobatics to avoid giving up their rent controlled apartments.

Ah, it appears I read your up-thread comment inside-out. I thought you were saying landlords would sit on the properties empty. Rather the point you were making is that existing tenants won't give them up.

My fault, but you can see how that interpretation is weird I hope.

> Ok so 2/3rds of the way through your case you've already moved the goalposts.

No goalposts have been moved, your assertion was that renters lose out because there won't be many properties for rent, as they will be occupied by 'legacy' tenants.

My assertion doesn't conflict that specifically - if you create market conditions that are less profitable for landlords you therefore have fewer of them using their greater access to debt to outcompete would-be owner-occupiers. As a result the population of renters drops as they become owners. So pressure comes out of the sector. In some markets demand for homes is already so far above production capacity and available land that there is no conceivable impact of removing 'investors' on the production rate of new dwellings.

Perhaps rent-control is a poor mechanism to achieve this. Other mechanisms exist.

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

#158

Post by Schiendelman »

servo_sausage wrote: post #18
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.

You probably won't see new commencement of building projects, but it probably doesn't mean ongoing projects would be scrapped... And these things have a lead time of years

You don't have to build for the market to change - the projection of future rents changes behavior in more efficiently operationalized landlords.

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

#159

Post by AlexeyBelov »

WalterBright wrote: post #148
uoaei wrote: post #113

Earlier quoted context omitted.

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

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

> to repeal that law

You've _just_ been told it's not a law.

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

#160

Post by verteu »

vlovich123 wrote: post #154
verteu wrote: post #93

Earlier quoted context omitted.

It does not, as explained in the section "Are Landlords Rent Seekers?" "Rent seeking" is more about making money by changing the rules instead of providing a service.

No, if you charge rent but aren’t actually investing meaningful capital in the property (most apartment building landlords do not in my experience), then that meets the definition of rent seeking. From Wikipedia: > Rent seeking, according to the Georgist, does not include those persons who have invested substantial capital improvements in a piece of land, but rather those who perform their role as mere titleholders.

> Rent seeking, *according to the Georgist*

Only Georgists believe that. And it's the rent of the "bare land", not including the housing constructed on it.

Post reply on HN