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Stanford paper says rent control is driving up cost of housing in San Francisco

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Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#51

Post by snissn »

tomohawk wrote: post #33
dmix wrote: post #10

Earlier quoted context omitted.

> Sometimes the cost of intervention outweigh benefits, sometimes they don't. + Sometimes it works for a short period, as the policy reflected the economy at the time of creation, then becomes irrelevant via technology/market reaction to policy/general progress... but yet stays a policy for decades. The important point is that we rarely ever measures whether it does work or not, and policy tends to have an extremely…

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.

Has that ever been tried in practice?

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#52

Post by ThrustVectoring »

hangonhn wrote: post #44
ThrustVectoring wrote: post #43

Another second-order effect of rent control is increased traffic. Suppose you have two residents with significantly below-market-rate housing at the same quality level, one in downtown SF and another in Mountain View. The former starts a new job at Google in Mountain View, the latter starts a new job at a trendy start-up in downtown SF. Since they're paying significantly below market rate, they're unable to trade apa…

Is this a well known problem? It has never occured to me that this could happen but it makes a lot of intuitive sense. Do you know if anyone has measures this effect? Very curious how much this contributes to the Bay Area traffic problems.

Second-order effects are difficult to study in general. My comment was driven entirely by fundamental economic modeling: price controls generate harms by forbidding beneficial trades, and people move to reduce their commute. There are other reasons why people move, and I expect to find these situations as well. For instance, people tend to downsize their housing after their children move out, but who would downsize when the smaller apartment is more expensive?

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#53

Post by 794CD01 »

oldsklgdfth wrote: post #34
dmix wrote: post #10

Earlier quoted context omitted.

> Sometimes the cost of intervention outweigh benefits, sometimes they don't. + Sometimes it works for a short period, as the policy reflected the economy at the time of creation, then becomes irrelevant via technology/market reaction to policy/general progress... but yet stays a policy for decades. The important point is that we rarely ever measures whether it does work or not, and policy tends to have an extremely…

Personally I think that 1) is not attainable in a practical sense. It would require resources that are not available and would just add to the ridiculous overhead of running a government. I used to believe in an ideal state as the one you describe. More recently, I think about what a system - i.e economic, political, social - that is stable (in some sense) looks like. For example, liberatarians believe that markets s…

They are, however, suboptimal for defending against conquest by larger societies, which historically has been a more important metric.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#54

Post by Lazare »

Note: Everyone (in the economics world, anyhow) has known that rent control does this for a long time. There's no controversy here; left, right, socialist, Chicago-school, heterodox, mainstream: It's a known thing.

This study is interesting primarily because it tries to put some hard numbers on how much it drives up the cost of housing.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#57

Post by jedberg »

jrs95 wrote: post #36

This is almost irrelevant if they don’t get the supply issues worked out.

Why would I build new supply if I'm going to be stuck renting it out under rent control? If I already own a property, how can I build more if I can't raise rents on my current properties to market rates so I can afford to build new buildings at market rates?

Rent control causes supply issues. Look at the City of Berkeley. Their supply increased massively right after rent control was lifted in 1997.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#58

Post by Spooky23 »

ThrustVectoring wrote: post #43

Another second-order effect of rent control is increased traffic. Suppose you have two residents with significantly below-market-rate housing at the same quality level, one in downtown SF and another in Mountain View. The former starts a new job at Google in Mountain View, the latter starts a new job at a trendy start-up in downtown SF. Since they're paying significantly below market rate, they're unable to trade apa…

That’s a real stretch.

End of the day, short term leases make rents float at the cost of making renters second class citizens who cannot stay in any one place or area.

Rent control is a way to deal with that. It exists because voters care deeply about it.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#59

Post by hindsightbias »

theduro wrote: post #12

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. 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…

I'm all for getting rid of rent control - as long as she gives up Prop 13 too.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#60

Post by kinkrtyavimoodh »

ThrustVectoring wrote: post #43

Another second-order effect of rent control is increased traffic. Suppose you have two residents with significantly below-market-rate housing at the same quality level, one in downtown SF and another in Mountain View. The former starts a new job at Google in Mountain View, the latter starts a new job at a trendy start-up in downtown SF. Since they're paying significantly below market rate, they're unable to trade apa…

There is a lot of stickiness and inelasticity when it comes to housing, especially when other factors such as kids and schools and spouse's commute and all come up.
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