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nickles | 3 years ago
Is that the case in Detroit? I’d wager there’s substantially more supply than demand.
> It isn't perfect (massive bubble right now) but seems to work well enough.
If there’s a massive bubble then it seems like that system didn’t control prices.
ricardobeat|3 years ago
The bubble mostly affects new home buyers, which are the ones who need the least protection.
Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost. Everyone living in social housing still has a home, and won't be evicted so that another person can come in to pay 2x the rent. Seems pretty good to me.
I don't know much about Detroit but it seems to demonstrate that the simple supply-demand model does not reflect reality. Prices should have dropped significantly, but instead it followed the same curve as the rest of the USA, with those $500 properties being a localized phenomenon.
nickles|3 years ago
So now you (or more generally the government) get to decide who is more deserving of appropriately priced housing? Why do new home buyers need less protection?
> Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost.
This is precisely the problem with this policy. When price doesn’t feed through to the market, the market can’t adjust. People simultaneously argue that the free market doesn’t work while endorsing policies that prevent the market from working.
> it seems to demonstrate that the simple supply-demand model does not reflect reality
The population dropped from its peak by 1.2mm people. Prices subsequently fell so much that it was possible to buy houses for $500. That’s exactly what the supply/demand model would predict.