Comments on: Rent Control? Sounds Like Socialism to Me…

By: Joshua

Joshua — Sat, 10 May 2008 23:37:38 +0000

Skyscrapers go up, efficiency goes up.
In a city, people walk/take the bus/ride the train, shipping is centralized (reducing gas use and truck production), and living space is minimized.

Arguably, the market (without zoning restrictions on building height and positioning) would improve living conditions and the environment.

The highways were a public works project – would trains necessarily have failed as commuter transit if the government hadn't subsidized them?

By: Patrick

Patrick — Thu, 08 May 2008 21:31:22 +0000

I learned most of what I know about the efficiency with which government manages supply and demand when I had to use newspapers in place of toilet paper. In a city where the average education level equals or exceeds that of Ezra's beloved bay area, a city which is in close proximity to some of the largest forests on earth.

By: PLW

PLW — Thu, 08 May 2008 21:18:46 +0000

If you cap supply, you get high prices. If you cap prices, you get small supply. If you cap both, and can actually enforce those caps, you get excess demand, poor quality, and housing allocated according to some mechanism other than the market. Some likely possibilities:
1. Knowing someone
2. Bribing someone
3. Random Chance
4. Tenure
5. ?

Unlikely possibilities:
1. Moral worth
2. "need"

By: Ezra

Ezra — Thu, 08 May 2008 17:45:13 +0000

So the solution is to increase the density of ugly highrises? I tend to agree with cities that want to limit the height of buildings. And, using San Francisco as an example, even when developers make those highrises, they don't want to offer affordable (which in SF should really be in ironic quotation marks..) units. They have to be forced by law to mandate a certain paltry percentage of the total units as affordable. I don't think allowing the developers to do what they want is a good answer? All the invisible hand does is help developers get rich, and screw poor people. Come to think of it, that's really Capitalism in a nutshell.

By: Chris

Chris — Thu, 08 May 2008 13:48:53 +0000

Spend any amount of time talking to people in NYC and you'll rapidly realize that the people benefiting from rent control there are generally not the working poor. I'm not familiar with SF, but I don't expect it's that different.

By: PLW

PLW — Thu, 08 May 2008 03:25:50 +0000

If you are really interested in learning the dynamics of urban planning, housing prices, and rent control you should check out some of the work done by Ed Glaeser: http://www.economics.harvard.edu/faculty/glaeser/papers_glaeser

He specifically looks at Cambridge and San Francisco and NYC and argues that the central reason for high rents (and housing prices) is the strict zoning.

Look around Cambridge and count the number of residential buildings over 10 stories. It won't take long. I promise that the lack isn't from the lack of people wanting to build them, but rather that it's impossible to get a permit, because they would destroy the "character" of the community. And so we have a pretty common phenomenon, excessive government intervention in the market (this time a quantity cap on housing supply) causes a problem (high prices) and the proposed solution is (Surprise!) more regulation, this time a price cap.

By: Ezra

Ezra — Thu, 08 May 2008 02:21:09 +0000

Look, I don't think rent control is perfect, I mean the rich can get just as much benefit from it as the poor. I just don't know what other option there is to allow working class and poor (increasingly becoming synonymous these days..) to live in places like the Bay Area. The subsidy idea floated in the article? I don't think the subsidy would ever keep pace with the increase in rents. I mean check out the data on what has happened in Cambridge since they got rid of rent control.

By: tgb

tgb — Thu, 08 May 2008 00:02:07 +0000

Just the facts, without prejudice. I lived in a rent-controlled studio apartment in San Francisco's Noe Valley neighborhood for 18 years. In that time, thanks to rent control, my rent went from $250 to $425. Good for me, bad for the landlord. I'm sure when I moved to Phoenix the landlord tripled the rent for the next tenant. OTOH, I had no repairs or service in the 18 years I was there.

You be the judge.

By: PLW

PLW — Wed, 07 May 2008 23:34:25 +0000

Are we putting together a list of terrible economic policies supported by Ezra? What's next, Tariffs?

By: Ezra

Ezra — Wed, 07 May 2008 23:27:27 +0000

Don't get me started on California's referendum policy. It's insane. Anybody that can get several thousand signatures can get something on the ballot. It often leads to voter confusion (for instance, this year, prop 99 was created to directly combat prop 98, and will supercede it if it gets more votes. Oy!)

By: Patrick

Patrick — Wed, 07 May 2008 23:24:18 +0000

Actually Ezra, I'd merely suggest that landlords be permitted to put less upkeep into their rent-controlled properties, which is what they already do. I would observe that complaints about substandard housing by rent-controlled tenants and their advocates are rather silly, but I've heard sillier things, and will hear siller things in the future.

Why you people take the referendum process as far as you do, now that's a silly thing I'd like to see justified.