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

31–40 of 161 posts

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

#31

Post by dreambuffer »

SpicyLemonZest wrote: post #19
dreambuffer wrote: post #9

Earlier 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?

Yes. Since the source paper was written, St. Paul has realized that this is the case and rolled back rent control on new construction to hopefully solve the problem. ( https://minnesotareformer.com/2025/05/08/st-paul-walks-back-... )

So they're losing out on a few dozen new units, but it is made up for by renters across the board having to pay less rent and thus having more money to put into the economy? Seems like a good trade to me?

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

#32

Post by Grombobulous »

doctorpangloss wrote: post #23

i see nobody read the paper. > Similarly, we need to consider any one-time confounding events in control cities. Most notably, Minneapolis would be a natural control for St. Paul. However, in addition to the ballot measure on rent control, Minneapolis’s ballot also included referenda on mayoral power and policing. These confounding events mean that if property values in St. Paul changed relative to Minneapolis, we co…

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 imagine that rent control in many Midwestern metros is effectively pointless. The rent is already being controlled by flat or declining populations, cheap land, and high homeownership rates.

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

#33

Post by joshribakoff »

avs733 wrote: post #10
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.

Except the housing market, especially the rental market, is still significantly driven by small rental property owners and is a significant source of generational wealth transfer. Starting with the assumption that all or even most investors / actors are rational is a continuing pox on both economic scholarship and societal thinking

It doesn’t require all or most investors to act rational. A small percentage of rational actors still moves prices.

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

#34

Post by hnav »

One effect of rent-control that I have observed in San Francisco is that well-off people get into baller apartments with the intention of keeping them forever. Over time the rental rate gets inflated away to almost nothing, the person buys a mansion in suburbia, keeping their rent controlled penthouse as a pied-a-terre. In theory landlords would be looking to petition for eviction but that's usually not what happens.

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

#36

Post by dmurvihill »

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…

Sure, when you kick out all the poor people, the city definitely does look richer.

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

#37

Post by akoboldfrying »

hnav wrote: post #34

One effect of rent-control that I have observed in San Francisco is that well-off people get into baller apartments with the intention of keeping them forever. Over time the rental rate gets inflated away to almost nothing, the person buys a mansion in suburbia, keeping their rent controlled penthouse as a pied-a-terre. In theory landlords would be looking to petition for eviction but that's usually not what happens.

> In theory landlords would be looking to petition for eviction but that's usually not what happens.

Are landlords allowed to increase rents when the tenant changes? If so then yes, I would expect them to do so, so if they don't, there needs to be some other explanation.

If they don't, then obviously they'll prefer to keep their long-term, pays-on-time, probably-not-wrecking-the-place existing tenant.

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

#38

Post by dmurvihill »

Grombobulous wrote: post #32
doctorpangloss wrote: post #23

i see nobody read the paper. > Similarly, we need to consider any one-time confounding events in control cities. Most notably, Minneapolis would be a natural control for St. Paul. However, in addition to the ballot measure on rent control, Minneapolis’s ballot also included referenda on mayoral power and policing. These confounding events mean that if property values in St. Paul changed relative to Minneapolis, we co…

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.

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

#39

Post by cwnyth »

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 stabilization (and even some old apartments still under rent control) and the former does not.

> I don't understand how the owners remain solvent.

I think that tells you everything you need to know about who's renting them out.

[1]: https://constructioncoverage.com/research/cities-with-the-mo...

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

#40

Post by akoboldfrying »

SilverElfin wrote: post #35

Why not just redistribute directly? If the concern is that some existing residents will no longer be able to afford things, give long time residents a subsidy voucher.

Because it goes directly into the pockets of the landlords?

People can argue about whether that's what should happen, and there are nuances on both sides there, but that is undeniably what will happen.

Post reply on HN