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Comment by colbyh | Hacker News Reader

Very well put. Personally, I'm a big fan of rent control as a general concept but I think what people are missing is that rent control isn't actually a solution for this specific problem.

Home prices aren't being driven up by developer greed or predatory landlords, they are stabilized at a rate acceptable to the market. In this case, since the availability is limited you are allowing a small percentage of the total population (those with outsized buying power) to define what is acceptable.

Rent control (alone) just pushes the problem down the road. Build more and everyone will be happy...eventually.

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> a big fan of rent control as a general concept

Government price controls have a 4000 year history of miserable failure. See "Forty Centuries of Wage and Price Controls."

The province of Ontario has rent controls and I never heard of it as an issue in the ~7 years I was renting there. I guess it helps that most towns don't have market rents growing way faster than inflation.

Rent control in Toronto is a godsend. Housing prices may be out of control but rent is still reasonable.

New buildings are exempt from rent controls. Rents on a unit also reset to market rate when a new tenant moves in. And Toronto is also the only place in Ontario you really hear about soaring housing costs. So rent controls are a fairly limited phenomenon here.

That's because Toronto has no problem allowing lots and lots of new skyscraper condos to increase supply.

> Build more and everyone will be happy...eventually.

Except this still will not help due to the economic forces driving urbanization. Silicon Valley is a self-fulfilling prophecy and creating more supply will only help to drive more demand.

Every new person newly moving into a heavily urbanized area will drive 0.5 more persons wanting to go there due to new network and auxiliary jobs created (groceries, haircutter, ...). As more than 70% of our jobs are by now defined by interactions with other people, urban centers of excellence are doomed to grow.

This is why building new housing is only ever a short-term solution as well. The only long-term solution to urbanization and gentrification is making these areas less attractive by offering less jobs in a major area.

"and creating more supply will only help to drive more demand."

This is empirically false:

https://dwtd9qkskt5ds.cloudfront.net/blog/wp-content/uploads...

http://blogs-images.forbes.com/trulia/files/2014/02/TruliaPr...

Your charts don't prove him wrong. Your charts prove that prices are higher where houses are getting built, prices are low and where prices are high, houses aren't getting get built. Neither addresses changes in demand. (Price is not indicative of demand without considering supply.)

I'm going to go way out on a limb here and say that there aren't a literally infinite number of people that want to live in San Francisco. Case in point, me. I hate San Francisco and avoid going there whenever possible.

QED.

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