Can you please stop posting low-substance comments like this on HN? This comment was jarring to read, as it's effectively an editorialized summary of the article, posted with little apparent thought, and doing nothing to cultivate curious conversation. This is exactly the kind of commenting we're hoping to avoid here. Looking over your comment history, most of your comments are like this. It's a hallmark of a low-thought pattern of commenting that many of the comments don't even wrap to a second line or end with a period.
Surely they are more likely to sell if they can never be leased profitably? This would put that capital to better use.
Your assumption there is also that the class of ‘renters’ is homogenous and wants to rent. In some cities there is a significant class of people who are forced into continuing with renting because of supply constraints on homes for sale, which are exacerbated by landlords with superior access to leverage buying up stock and pushing up prices. In this situation the landlords actually create their own market.
A comparative shortage of rental properties and of landlords could be very desirable, as it implies more owner-occupiers.
It also implies more capital flowing out of real-estate and into productive industry, which one would assume is also desirable for a thriving economy.
You don't need to ask this question when you can readily observe a century of economic data on rent control. People do all kinds of acrobatics to avoid giving up their rent controlled apartments.
Why wouldn't they? They are locked in at a price that was frozen in time and can't increase. And there is a thriving black market for re-leased rent-controlled apartments. (black markets always occur when supply is artificially restricted).
You're posing a hypothetical that only happens in an alternate universe where the foundational ideas of economics and human behavior don't apply.
> A comparative shortage of rental properties and of landlords *could be very desirable*, as it implies more owner-occupiers.
Ok so 2/3rds of the way through your case you've already moved the goalposts. Here's a reality check for you: a dwelling is a dwelling, whether it is rented or owned. Rent control always and everywhere produces a shortage of dwellings. This hurts everyone.
Lower rent cannot be legislated any more than waterfront mansions for everyone can be legislated. It would be wonderful, if true. But it is not.
What happens is that economics shift from a renewable model to an extractive model.
Farms are renewable so farmers maintain them over centuries. Mines are extractive so they get pumped and dumped.
What landlords do in these situations is try to extract as much money as possible before the enterprise collapses, either literally or figuratively. New housing doesn't come online quickly so both quality and quantity fall.
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.
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% into existing stock, not new builds, and that investment properties actually create rental demand as investors crowd out would-be owner-occupiers from both existing houses and new-build opportunities.
In Melbourne, where measures to reduce the attractiveness of investment have already happened, the price of housing has levelled off comparative to other capitals in Aus, and rental availability has actually gone up.
The underlying problem is of course supply, but there appears to be a limit to how fast the building industry can actually build more stock, so with huge demand and limited supply, we don’t need to encourage as much speculation or landlordism in the market to get more built. All it does is add heat and pump prices.
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.
Can you please stop posting low-substance comments like this on HN? This comment was jarring to read, as it's effectively an editorialized summary of the article, posted with little apparent thought, and doing nothing to cultivate curious conversation. This is exactly the kind of commenting we're hoping to avoid here. Looking over your comment history, most of your comments are like this. It's a hallmark of a low-thought pattern of commenting that many of the comments don't even wrap to a second line or end with a period.
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
The current cohort of renters wins. All future renters lose, because the rent-controlled apartments are never re-leased. People sit on them forever.
Price ceiling is the surest way in economics to create a shortage.
Why would they sit on them?
Surely they are more likely to sell if they can never be leased profitably? This would put that capital to better use.
Your assumption there is also that the class of ‘renters’ is homogenous and wants to rent. In some cities there is a significant class of people who are forced into continuing with renting because of supply constraints on homes for sale, which are exacerbated by landlords with superior access to leverage buying up stock and pushing up prices. In this situation the landlords actually create their own market.
A comparative shortage of rental properties and of landlords could be very desirable, as it implies more owner-occupiers.
It also implies more capital flowing out of real-estate and into productive industry, which one would assume is also desirable for a thriving economy.
You don't need to ask this question when you can readily observe a century of economic data on rent control. People do all kinds of acrobatics to avoid giving up their rent controlled apartments.
Why wouldn't they? They are locked in at a price that was frozen in time and can't increase. And there is a thriving black market for re-leased rent-controlled apartments. (black markets always occur when supply is artificially restricted).
You're posing a hypothetical that only happens in an alternate universe where the foundational ideas of economics and human behavior don't apply.
> A comparative shortage of rental properties and of landlords *could be very desirable*, as it implies more owner-occupiers.
Ok so 2/3rds of the way through your case you've already moved the goalposts. Here's a reality check for you: a dwelling is a dwelling, whether it is rented or owned. Rent control always and everywhere produces a shortage of dwellings. This hurts everyone.
Lower rent cannot be legislated any more than waterfront mansions for everyone can be legislated. It would be wonderful, if true. But it is not.
What happens is that economics shift from a renewable model to an extractive model.
Farms are renewable so farmers maintain them over centuries. Mines are extractive so they get pumped and dumped.
What landlords do in these situations is try to extract as much money as possible before the enterprise collapses, either literally or figuratively. New housing doesn't come online quickly so both quality and quantity fall.
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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.
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% into existing stock, not new builds, and that investment properties actually create rental demand as investors crowd out would-be owner-occupiers from both existing houses and new-build opportunities.
In Melbourne, where measures to reduce the attractiveness of investment have already happened, the price of housing has levelled off comparative to other capitals in Aus, and rental availability has actually gone up.
The underlying problem is of course supply, but there appears to be a limit to how fast the building industry can actually build more stock, so with huge demand and limited supply, we don’t need to encourage as much speculation or landlordism in the market to get more built. All it does is add heat and pump prices.
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.
1 reply →