This seems obvious, no?
Stanford paper says rent control is driving up cost of housing in San Francisco
271–280 of 326 posts
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#272Rent control is a failed experiment. All it does is force land lords to massively increase rent amounts when someone moves out to account for multi-year market increases. Basically, if the real market price of an apartment is ~$3,000/mo, but in 5 years it realistically would be $5,000, they will simply list it for $5,000 now, to mitigate the loss. My mother-in-law is a land lord in Los Angeles (a very fair one at tha…
"Rent control is a failed experiment. All it does is force land lords to massively increase rent amounts when someone moves out to account for multi-year market increases." Forces them? As if they wouldn't raise rents as much as they felt they could get away with anyway. Or as if without rent control landlords would keep rents low, merely out of the goodness of their hearts.
In commercial real estate there are two types of contracts.
I agree to rent this place for a year.
I agree to rent this place for a year, and I'm paying for the option to re-rent it at the same rate for the next 5 years.
You can imagine that in commercial real estate one of these contracts is more expensive per month than the other. Especially in markets with rising rents.
Basically rent control bans the first type of contract, and requires the second. And therefore increases rental rates.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#273Earlier quoted context omitted.
What your response misses is the time component of vacancy. If I have rent control, I will list at a higher price and let the property sit vacant for longer to find a tenant because the law says that I am limited in the ability to later adapt the rent to the market. Without rent control, there is much less incentive to leave a property vacant, looking for a tenant willing to pay a higher price point. Most microeconom…
So... in other words, what you're missing is a punitive tax on vacant property, as an incentive to rent asap - at any price.
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Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#274Earlier quoted context omitted.
IMO, there should be automatic sunset provision in every law passed in this country, like the one existed for the Patriotic Act, and reviewed, renewed or expired every 5 or 10 years.
Great, now there's a legislative breakdown on the week that that the murder law had to be re-passed, and it's legal until Congress resumes...
Why would fundamental laws such as violence or theft need expiry or review?
Much like the constitution there should be a baseline and non-aggression seems like an obvious first law.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#275Earlier quoted context omitted.
One second-order effect of true UBI would be to inflate the cost of goods to the level of UBI, thus rendering UBI pointless.
The price of basic necessities is limited by the cost of production, not some fundamental scarcity. We could produce as much food, clothing etc. as anyone could want without increasing the cost. (In fact, the cost should decrease slightly due to economies of scale.)
price = f(cost) is incorrect
cost = f(price) is correct
This is basic economics. (Seriously, this is in the easy stuff like Hazlitt.)
For an example, see joe's response.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#276Earlier quoted context omitted.
Maybe we need something deeper than that, you have 3/4 of your country that are almost a wasteland and you insist on cram all the people in 4 or 5 cities. Maybe we need to start to incentive moving people to other more empty places...
It's not really a wasteland, though. My wife moved here from New York to Kansas City, and her old friends act like there are cows walking down the street or something. If you're willing to live with diversity of political affiliation (it's a pretty even mix of Democrat and Republican around here, and I've heard people on HN say they'd be absolutely unwilling to live somewhere like that), you can get a 2200 square foo…
I recently looked at jobs in the Bay Area. I currently live in Southern California, so it's not cheap where I live. To have a sub 20 minute commute (current commute: 7 minutes) to any of the jobs I was looking at would have added about $40k per year in costs. I probably could have been able to get an offer at $40k more per year, but it would be moving the whole family to break even financially.
If I could talk my wife into living somewhere with winters, then we'd probably move to Cincinnati, since we have friends there. At my current pay we could probably retire there when the kids are in HS.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#277Earlier quoted context omitted.
>Rent control removes the incentive to build new apartments. Not even 1% as much as untaxing land and property does.
Actually the opposite, by taxing land in high demand urban cores it would incentivize more efficient use of the land - i.e. building up to support more occupants or higher value economic activity. [1] Deregulating the zoning restrictions would allow more buildings to be built. [2] Here is a startling fact: in 2014 there were 142,417 housing starts in the city of Tokyo (population 13.3m, no empty land), more than the…
Not just Prop 13; I discussed with a contractor the possibility of building a new home here about a decade ago; estimate for cost of obtaining permits: $250k. The lot is still empty.
[edit]
Also due to house vs. lot-size restrictions the house would have been limited to just over 2000 square feet. This is regardless of the number of stories (i.e. a 2-storey house would need to have about a 1000 square foot footprint, but a ranch could have about 2000 square foot footprint).
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#278Earlier quoted context omitted.
Heinlen in "The Moon is a Harsh Mistress" introduces the idea of a legislature with 2 chambers. One for creating laws and the other for getting rid of them. The threshold for creating them being higher. The way it is now, everything is geared towards "doing" things, and credit is received for "accomplishments". Its usually much harder to undo things. It would be refreshing to have specialists in undoing things.
IMO, there should be automatic sunset provision in every law passed in this country, like the one existed for the Patriotic Act, and reviewed, renewed or expired every 5 or 10 years.
Think about how much pork and other dubious unrelated provisions get attached to bills now. Now imagine what would happen if politicians got a regular opportunity to hold the continuing existence of every single law currently on the books hostage, no matter how important, as a tactic for getting their way on other things they wanted.
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#279Earlier quoted context omitted.
IMO, there should be automatic sunset provision in every law passed in this country, like the one existed for the Patriotic Act, and reviewed, renewed or expired every 5 or 10 years.
Texas has a form of this. Every state agency (with a handful of exceptions) will automatically be abolished every 5-10 years absent explicit action by the legislature.
Yes, and this resulted in a fairly unpleasant fiasco a few months ago in which the governor of Texas had to call an emergency session in order to renew the Texas Medical Board's existence because a senator had held it hostage in order to try and force through a bill banning trans women from using women's restrooms.
(A lot of the national press incorrectly portrayed this as the Texas governor calling an emergency session to ban trans women from women's restrooms. While that was debated as part of the emergency session, it wasn't the goal and the governor made allowing it or anything else to be debated conditional on passing the critical Texas Medical Board renewal - forcing the supporters of the bathroom bill to pass that first and give up their leverage in order to get a bathroom bill vote they would inevitably lose. The national media reporting on this was terrible.)
Re: Stanford paper says rent control is driving up cost of housing in San Francisco
#280Earlier quoted context omitted.
The price of basic necessities is limited by the cost of production, not some fundamental scarcity. We could produce as much food, clothing etc. as anyone could want without increasing the cost. (In fact, the cost should decrease slightly due to economies of scale.)
price = f(cost) is incorrect cost = f(price) is correct This is basic economics. (Seriously, this is in the easy stuff like Hazlitt.) For an example, see joe's response.
Just to check that I'm understanding you correctly, you're saying that the cost of producing a product is a function of its sell price?