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How Rent Control Drives Out Affordable Housing

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Re: How Rent Control Drives Out Affordable Housing

#71

Post by coryrc »

yummyfajitas wrote: post #47
calambrac wrote: post #34

Earlier quoted context omitted.

Rent stabilization in NYC isn't mandatory for new construction, so new buildup being condos is not a response to rent control (unless it's a response to the threat of future rent control). Also, you'll need to explain how "sky high rents + abandoned buildings" corresponds to "Why renovate when you can't charge rents commensurately?" - if landlords can't charge rents commensurately, where are the sky high rents coming…

"Rent stabilization in NYC isn't mandatory for new construction," In NYC, future crazy regulations are always a worry. Most new construction IS rent controlled. My previous apartment (built to be condos, but the owner was unable to sell) was. To evade various ridiculous NYC taxes (which make a lot of new construction unviable), you need to submit to rent control. "if landlords can't charge rents commensurately, where…

> The main attraction to living in Harlem is the 1-6 trains.

One thing I've thought about is who is paying for the new light rail in Seattle and who will be receiving the benefits of it. It won't be in my current area until 2030, but I'll be paying taxes for it for 21 years. People who move her then get it for free, and since we could say they've been living cheaper elsewhere by not paying for this light rail, they can now bid more for the same area, driving up prices. So the laws should force newcomers to pay up their share of past costs. Otherwise, there is a disincentive to improve our area.

In summary, maybe the current residents shouldn't get rent control, but you new residents should pay plenty on top of rent.

Re: How Rent Control Drives Out Affordable Housing

#72

Post by mmmurf »

logjam wrote: post #25
mmmurf wrote: post #6

Earlier quoted context omitted.

Examples of how Cato has been discredited?

Oh my. Two minutes of web search: http://www.accuracy.org/article.php?articleId=51 http://www.cato-unbound.org/2008/11/12/matthew-yglesias/poli... http://davidbrin.blogspot.com/2006/05/cato-hypocrisy.html http://www.socsec.org/publications.asp?pubid=325 http://www.sierraclub.org/sierra/200207/thinktank.asp http://www.acsh.org/publications/pubID.498/pub_detail.asp http://www.no-smoke.org/pdf/catoinstitute.pdf http://w…

Do you think people should be allowed to smoke? Should they be allowed to eat Doritos? Should they be allowed to skydive?

Re: How Rent Control Drives Out Affordable Housing

#73

Post by JabavuAdams »

loumf wrote: post #17
mdasen wrote: post #7

As someone in Boston, I can tell you that rent control was terrible here. The rent controlled units went to people with high incomes and political power (including mayors and those sitting on the Supreme Judicial Court). Most rent controlled units were simply taken off the market in one way or another. If you're getting well below market rent, you tend to look for other ways to use the property and some just allowed…

Aside from anecdotes, do you have access to any data that substantiates the claim that "The rent controlled units went to people with high incomes and political power" -- can you put a figure on it (50%, 60%, higher?). My grandparents lived in rent controlled apartments in NYC that they could not have afforded to stay in -- moved there in the 30's in neighborhoods that filled with gang violence -- but gentrified arou…

> My grandparents lived in rent controlled apartments in NYC that they could not have afforded to stay in [...]

This is how rent-control can create shortages.

Under rent-control, older people who would otherwise downsize have no incentive to do so. Younger people who might still be able to live with their parents instead rent separate apartments.

The fundamental problem is there's not enough housing for everyone to get as much of it as they want. So, there's a need to economize.

The additional problem is that your residence is not a commodity to you. Being forced, by the market, to move out of your place is very traumatic, even if it could be better used by someone else.

Re: How Rent Control Drives Out Affordable Housing

#74

Post by michaelneale »

mdasen wrote: post #7

As someone in Boston, I can tell you that rent control was terrible here. The rent controlled units went to people with high incomes and political power (including mayors and those sitting on the Supreme Judicial Court). Most rent controlled units were simply taken off the market in one way or another. If you're getting well below market rent, you tend to look for other ways to use the property and some just allowed…

I have never lived anywhere to see rent control in action, but its an interesting demonstration of economics when you fix one variable.

Also - how to doctors have political or economic power? (do you mean they earn enough to bribe?)

Re: How Rent Control Drives Out Affordable Housing

#75

Post by mmmurf »

davidw wrote: post #53
pelle wrote: post #51

Earlier quoted context omitted.

Health care is no different than any other service. If you are able to increase the availability as well as lower the price it helps everyone. Including the poor.

There's always going to be a cutoff point, though, where people are unprofitable. Introducing some market oriented reforms might improve things, but you simply can't get around the fact that in a purely profit-oriented system, some people are not worth the money it would cost to save their lives or reduce their suffering. There are plenty of products where the market drives prices down, but doesn't make them free or…

True. I don't think anyone would object to helping the 1% of people who are actually in that category. The problem is that interest groups hijack the programs in order to win handouts for those who don't really need the programs.

Re: How Rent Control Drives Out Affordable Housing

#77

Post by eyeraw »

jmtulloss wrote: post #59
logjam wrote: post #25

Earlier quoted context omitted.

Oh my. Two minutes of web search: http://www.accuracy.org/article.php?articleId=51 http://www.cato-unbound.org/2008/11/12/matthew-yglesias/poli... http://davidbrin.blogspot.com/2006/05/cato-hypocrisy.html http://www.socsec.org/publications.asp?pubid=325 http://www.sierraclub.org/sierra/200207/thinktank.asp http://www.acsh.org/publications/pubID.498/pub_detail.asp http://www.no-smoke.org/pdf/catoinstitute.pdf http://w…

Their defense of the tobacco industry has always been centered around the rights of the individual. Just because Phillip Morris pays a few dollars to keep the institute running does not mean Cato's arguments are unfounded. All think tanks have financial backing from some faction or another, and (surprise!) it's usually the people who agree with the think tank's point of view. Just because a think tank accepts money d…

"Just because Phillip Morris pays a few dollars to keep the institute running does not mean Cato's arguments are unfounded."

lol

"As an individual, it's up to you to research both sides and decide on which makes the more compelling case."

Yup. If you don't give equal time to paid shills you're not being Fair and Balanced.

Re: How Rent Control Drives Out Affordable Housing

#78

Post by eyeraw »

mmmurf wrote: post #57
logjam wrote: post #25

Earlier quoted context omitted.

Oh my. Two minutes of web search: http://www.accuracy.org/article.php?articleId=51 http://www.cato-unbound.org/2008/11/12/matthew-yglesias/poli... http://davidbrin.blogspot.com/2006/05/cato-hypocrisy.html http://www.socsec.org/publications.asp?pubid=325 http://www.sierraclub.org/sierra/200207/thinktank.asp http://www.acsh.org/publications/pubID.498/pub_detail.asp http://www.no-smoke.org/pdf/catoinstitute.pdf http://w…

How does opposing the automotive bailout and the financial bailout constitute being a shill for big business? I'd say it's quite the opposite!

The right is inherently anti-union (hence not supporting automakers in this case) and pro-corporate. And all of Cato's positions about "personal responsibility" vs. government regulation (of tobacco, or oil, or whomever else pays them) is obviously a tactic to influence public opinion against regulation under the guise of being pro-individual. It's total bullshit. They're about as libertarian as my left nut.

Re: How Rent Control Drives Out Affordable Housing

#79

Post by jason »

calambrac wrote: post #46
jason wrote: post #32

I have a vagrant living in my NYC apt building that pays $75 a month in rent and eats out of the garbage. He has no electricity or running water. When he opens the door to his apt in the summer the rest of the building gags. There are two other units that pay $75 dollars; a nice old couple and a loony chain smoker with bad BO.

At a 7.5% annual increase from 1971, they would have originally been paying just over $5/month (that's about $25.34 in today's dollars). I'm not an expert in NYC rent prices in the early 70's, but that seems absurdly low. Maybe it's that cheap for some other reason?

The rent amount is gossip from the super. The other stuff is first hand, and probably adds a little "control" to my rent as well, but believe me not that much.

Re: How Rent Control Drives Out Affordable Housing

#80

Post by mmmurf »

calambrac wrote: post #61
mmmurf wrote: post #56

Earlier quoted context omitted.

Immigration: I don't think you really disagree with Cato. Arguing that immigration restrictions should be eliminated does not necessarily entail that one believes the restrictions should be lifted all at once. Rent Control: Rent control causes higher prices for everyone except those who happen to have a rent-controlled apartment, because it discourages improvement of existing properties and discourages building new p…

Just addressing the on-topic portion of your comment (not that the rest wouldn't be worth commenting on, just not enough time or energy) - I really don't understand your criticism of rent control. "It causes higher prices for everyone not under rent-control." Yes, but that's almost the whole point of rent control - people aren't being displaced by the folks bidding up the price of all the other apartments to absurd l…

The point is that rent control (over time) drives up the price of rental dwellings, a phenomenon which greatly harms the poor. Here's why:

In many cities, new buildings are exempt from rent control if they are "luxury" buildings. So the supply of luxury housing increases. Meanwhile, the incentive to build non-luxury buildings is greatly diminished b/c those buildings fall under mandatory rent control. Also, there is a bigger incentive to turn buildings into condos, etc., to avoid having to deal with rent control. Not sure where you heard that new properties are exempt in most cases. This may be due to the fact that most are luxury buildings.

So there is a finite amount of rent-controlled housing, and since it's such a great deal, the landlords have little incentive to improve the fixtures, furnishings, etc. They will rent the place without improvements, so there is no reason to spend the money on them. Thus the places deteriorate over time and begin to become more and more slumlike.

Rent control also encourages over-consumption of housing space. My 3br apt example above explains one example.

Without rent control, supply and demand can function properly. Maybe this means that cheaper housing is located a bit further from the highest rent area of a city. More likely, if there is demand for cheaper housing, someone will figure out a way to build it. The huge number of condemned buildings in major cities is evidence of the resources that have been completely wasted b/c nobody had the incentive to improve the places enough to make them liveable!

If you rent, it's not a permanent home. This has many advantages -- if you get laid off you can easily move with a month's notice. You don't have to worry about long term upkeep, you don't have to worry about hiring a realtor or trying to recoup your investment if the market dips. The other side of the coin is that sometimes prices change to reflect other realities. An increasing price probably means that the area is thriving and (surprise) the space is actually worth more. Once you get into declaring that things should be priced by public officials rather than based on the market price (what they are actually worth to someone else who's willing to pay for them) you are stepping onto a very slippery slope.

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