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

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

#91

Post by uoaei »

WalterBright wrote: post #84
uoaei wrote: post #68

Earlier quoted context omitted.

Supply and demand is and always has been a useful first-order approximation. Reality is a lot more complicated. Dear reader, never believe anyone who says a serious societal problem is "just" anything. Especially on the internet when they use merely a pesudonym to assert their authority. Especially when the person behind the pseudonym is a one-time washed-out author desperately clinging to their housing stock in Athe…

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No, it's not a law in the same way as physical laws. Most of the failures in economics of the past 50 years can be mostly directly attributed to a fatal overcommitment to the belief that these attributed relations are incontrivertible.

What really exists, closest to the limit we will call "hard science" or "physics", is the microcosmic focus on individuals interacting in a market. Everything else -- supply and demand as a theory definitely included -- is a statistical extrapolation from micro-scale interactions. Hence the label of "dismal science". It's dismal because every hardline assumption is inevitably contravened by real life physics.

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

#92

Post by aurareturn »

WalterBright wrote: post #86
aurareturn wrote: post #70

Earlier quoted context omitted.

Yep. Rent control benefits the people who are already there, but punishes everyone else. It will increase the price for new comers, lower the quality of buildings due lack of maintenance funding, and decrease new construction. Rental control is NIMBY for renters who are already there.

> Rent control benefits the people who are already there Not always. It can trap the person in the apartment, such as constraining where they can work.

It can't trap the person in the apartment because they can leave at anytime.

"Trap" here means the deal is so good that they don't ever want to leave.

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

#93

Post by verteu »

dmurvihill wrote: post #77
verteu wrote: post #46

Earlier quoted context omitted.

Counterintuitively, collecting rent is not considered "rent-seeking" by the econ definition, eg: https://www.investopedia.com/terms/r/rentseeking.asp

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.

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

#94

Post by Danox »

Nursie wrote: post #56
TurdF3rguson wrote: post #42

Earlier quoted context omitted.

If you don't mind investors being unwilling to do new construction. It's a band-aid on a much bigger problem.

That depends on the market. I’m not familiar with St Paul Minnesota, but here in Perth, Western Australia this is raised as an argument every time someone proposes anything to do with rolling back investor tax breaks. That and “there will be no rentals!” The truth of the situation here is that there is more than enough demand for new housing anyway, directly financed by wannabe homeowners, that ‘investment’ goes 90%…

All of the capitalistic English speaking countries today are suffering, the same problem and it ain’t because of rent control, starter houses/homes are not being built for the most part and no affordable apartments are either it’s come down to you shall rent for the rest of your life, and live in a luxury apartment doubled up with roomies, or enjoy living in a car or van on the road.

That modern day tenement apartment is now known as a luxury apartment with the amenities courtesy of an equity company.

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

#95

Post by devolving-dev »

AlexandrB wrote: post #65
devolving-dev wrote: post #52

People like to look at rent control from a purely economic lens, but the sociopolitical aspect must also be considered. A suboptimal economic outcome might actually be optimal when all factors are considered. Social harmony and a feeling of hope for underprivileged residents are hard to value, but we must admit that they do have value.

That assumes rent controlled units actually benefit mostly the underprivileged. They don't. They create a strong incentive to keep a flat indefinitely. It's not unheard of for a person to continue renting a rent frozen apartment after they buy a house because the rent is so cheap - effectively it's a second home. There's also plenty of corruption. "Knowing a guy" is one of the best ways to get a rent controlled unit…

Even if they don't benefit economically, there's some value in having them feel that they are valued and have a voice at the table. Such policies can provide the popular support needed to implement other more economically optimal policies, and we're seeing this happen for example with the mayor of New York.

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

#96

Post by [deleted] »

mgh95 wrote: post #78
dreambuffer wrote: post #31

Earlier quoted context omitted.

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?

Because then the units fall into disrepair (because they no longer make sense to maintain) leading to less supply leading to lower availability of units leading to higher cost of housing. See what happened in NYC regarding the consolidation of housing units.

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

#97

Post by Danox »

dmurvihill wrote: post #74
TurdF3rguson wrote: post #42

Earlier quoted context omitted.

If you don't mind investors being unwilling to do new construction. It's a band-aid on a much bigger problem.

I don't mind ending the type of construction that's recently been occurring.

Thou shall have luxury apartments which are sprouting up everywhere in America. Where the elevators don’t work, but you do have amenities and you have top and bottom left right stereo, you can hear your neighbors above below and to the left and the right. As a bonus you also get to have extra company to help pay the rent.

Rent control has nothing to do with this bonus accommodation. This is directly out of the sharecropper, subscription own nothing playbook.

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

#99

Post by MAustriaGA »

ryukoposting wrote: post #50
vannevar wrote: post #29

Earlier quoted context omitted.

The plot on page 39 certainly looks like the St Paul market turned somewhere around July of 2020, over a year before the rent control, and the downward trend accelerated over the next couple of years. I'm skeptical of the authors' ability to tease out the contribution of rent control to a process that had already begun well before the alleged causal event.

I lived there at the time. The George Floyd riots were in late May/early June 2020. I went to the protests by the police station in the Powderhorn neighborhood, that's the police station that got burned down. I got the hell out before that, though. Most of the damage was concentrated in Minneapolis, a little south of the river. But what happens in Minneapolis affects St. Paul, and vice versa. St. Paul wasn't unscathe…

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

#100

Post by TurdF3rguson »

Danox wrote: post #94
Nursie wrote: post #56

Earlier quoted context omitted.

That depends on the market. I’m not familiar with St Paul Minnesota, but here in Perth, Western Australia this is raised as an argument every time someone proposes anything to do with rolling back investor tax breaks. That and “there will be no rentals!” The truth of the situation here is that there is more than enough demand for new housing anyway, directly financed by wannabe homeowners, that ‘investment’ goes 90%…

All of the capitalistic English speaking countries today are suffering, the same problem and it ain’t because of rent control, starter houses/homes are not being built for the most part and no affordable apartments are either it’s come down to you shall rent for the rest of your life, and live in a luxury apartment doubled up with roomies, or enjoy living in a car or van on the road. That modern day tenement apartmen…

There's even a new word for it: "rent-seeking", if you're my age you remember the Ropers as a kindly awkward couple. And Mr. Furley as kind of a weirdo but landlords were never associated with corporate greed for me generation. I realize that situation has changed and I feel for these poor kids.

Heck I remember renting a full house in decent (not great) neighborhoods for $300 which was earnable in a single day.

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