[b1r6]

Rent control is bad economics. The simple progression:

1. Local political culture limits natural housing supply growth.

2. Increasing percentages of people can't afford rent due to housing supply not meeting demand.

3. Rent control is enacted for political wins.

4. Property values fall due to decreased utility in ownership.

5. New housing creation falls due to new lack of incentive.

6. End-stage dysfunction; negative feedback loop established.

6A. Lack of inflation-tracking minimum wage exacerbates.

[sampo]

Here is also Paul Krugman in The New York Times 19 years ago:

The analysis of rent control is among the best-understood issues in all of economics, and -- among economists, anyway -- one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ''a ceiling on rents reduces the quality and quantity of housing.'' Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand. Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go -- and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended? Predictable.

...

None of this says that ending rent control is an easy decision. Still, surely it is worth knowing that the pathologies of San Francisco's housing market are right out of the textbook, that they are exactly what supply-and-demand analysis predicts.

But people literally don't want to know. A few months ago, when a San Francisco official proposed a study of the city's housing crisis, there was a firestorm of opposition from tenant-advocacy groups. They argued that even to study the situation was a step on the road to ending rent control -- and they may well have been right, because studying the issue might lead to a recognition of the obvious.

https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent...

[ebog]

It's interesting because the argument these NIMBYs use against studying rent control is the exact same as the one gun rights activists and the NRA used against allowing the CDC to study the effects of gun ownership rates.

These privileged "progressives" need to be put in their place politically.

[jandrese]

This seems to assume that rent controls are the only thing preventing new home construction (because of the uncertainty of being able to sell units without being hit by rent control), but supply can be restricted in many ways. The most common of which is simply running out of room thanks to natural boundaries (rivers, oceans, lakes) and local policies against building high density housing.

So rent control tends to show up in areas where rents are growing significantly faster than inflation already, meaning the rent control is at best a band-aid over the existing problem. And then the problem gets worse and economists blame rent controls.

[mindcandy]

Additionally, people in rent controlled units are strongly incentivized to stay put, keeping the unit off the market. Knowing this, landlords must estimate the future market and price that in to new rates or they risk being even more below market rate after that new renter has been there for a few years. This is a feedback loop between landlords. Therefore, even if median rent paid in the city is reasonable, all available units are priced sky high.

This leads to people being stuck forever wherever they managed to land on their first try. Got a new job offer across town that pays better? Ready to upgrade from your straight outta school studio apt? Too bad. Moving out of your established rent control would cost you so much you’d be moving for an effective loss. Just stay immobile and keep that unit off market for decades.

[asdff]

I see this argument a lot about how bad it is to be stuck and I really can't wrap my head around how its presented. Laid bare its "you've been underpaying so long you won't be able to afford overpaying."

If the landlord suddenly demands double the rent and you don't have rent control, and everywhere else in town demands double the rent, you are homeless. If you have rent control, your landlord cannot double your rent, but it still goes up at a fixed % a year, and you aren't gonna go homeless.

Housing prices have rose faster than wages can keep up, either you offer some limits at how much you can gouge from a tenant or you accept the consequences of low income workers forced to live far from their low wage job (increased vehicle usage due to being far from convenient transit, more congestion on the roads, more pollution in the city), as there's just not enough jobs in these far flung areas.

The great irony is that all of these debates and issues and perilous environmental and economic situations could all be avoided if we simply built dense supply to match demand. This is the U.S., we do nothing better than create heaps of supply to exceed demand. Distal suburbs hastily constructed in wildfire lands aren't the answer; you have to build housing where you've built the jobs. That means building UP so people don't have to travel for hours and hours sideways to find something they can live in with their wages.

[phil248]

"Knowing this, landlords must estimate the future market and price..."

No. Just because a landlord is saddled with low rent units does not mean they can charge more for vacant units. They can only charge what the market will allow. They can't magically find renters willing to pay 50% above market just because they have some units being rented for 50% below market.

[VHRanger]

Correct. The most credible study on the matter (Diamond et Al. 2018) makes it clear rent control over the decades evolves to hurt the disadvantaged the most.

[k__]

What's the alternative?

[b1r6]

To aggressively build housing. But this requires local politics to cordially ignore the calls to keep the status-quo. In many places, it isn't possible. :/

[mises]

I like the approach Houston has taken: no zoning. Many say it won't work, but it does. HOAs pop up in some places if they really don't want commercial.

[sixo]

The implication of that framing is to somehow overcome: "Local political culture limits natural housing supply growth"

via - ignoring NIMBYs or at least reducing their influence, rezoning for density, deregulating to allow smaller/denser/cheaper constructions...

[jseliger]

https://news.ycombinator.com/item?id=16704501

[aglavine]

The alternative is:

Make towns growth into cities. A lot of heartland available. A lot of people wants to own their house. Good Mortgages. Good construction credits. Industries can have tax benefits to be there.

[dredmorbius]

Land value tax.

[legitster]

Zoning enough housing to meet demand.

[lern_too_spel]

Rent subsidies. https://www.harris.senate.gov/news/press-releases/amid-risin...

[sisu2019]

Do nothing and let the market sort it out. It's time to try some actual laissez fair now that intervention has failed, as was predicted by most economists.

Minimal zoning, minimal taxes, minimal codes. Just boil it down to the raw essentials and give a legal guarantee that every building permit application will be processed in 6 weeks and furthermore legally guarantee that for new buildings all of these new rules are immutable or 10 to 20 years.

[zjaffee]

Rent control tacked to region wide inflation levels is still good policy even if it's bad economics. People should have an inherent right to place, if they didn't the immigration and native rights debates around the world would be non-existent.

Rent control also has the positive effect that if renters put in effort to improve the economic value of their community and neighborhood, that they wouldn't be displaced in the process. I'd also point out that rent control doesn't always have to happen as a result of low supply, nor does rent control necessarily reduce housing construction should zoning be relaxed in the process (in the era with the highest levels of rent control in Manhattan, was also the era of the highest amount of construction).

[rsync]

"People should have an inherent right to place ..."

If that is the case, wouldn't we all just choose Aspen (or La Jolla or Zurich, depending on tastes) ?

It's not obvious to me how recognizing an inherent right to live in any place would be operable ...

[lr4444lr]

If people have an "inherent right to place" that extends to the actual address, what's the incentive to private residency land ownership?

[leetcrew]

why of all things should people have the right to live in a dwelling they dont even own for a fixed price in perpetuity? prop 13 is pretty awful but at least it makes slightly more sense than rent control.