Hacker News Reader

Comment by ds | Hacker News Reader

There is more consensus on Rent Control being harmful than there is on global warming. Its absolutely insane that it would be enacted.

The solutions to expensive housing is complicated, obviously. Its about zoning, cancelling out NIMBYism, incentivizing affordable housing and basically matching supply with demand.

Rent control simply doesn't work. For any person it helps, it will disadvantage 10x more in the process.

I wonder if they are putting in vacancy controls as well. That would have the 1-2 punch of not only reducing rental stock but also significantly lowering property values (and property taxes in the process)

View on HN

What do you mean by vacancy controls leading to reduced rental stock and lowering property values?

If high rent is the issue, vacant units should be pushed to the market instead of artificially limiting supply. Cities and residents would mutually benefit from a vacancy tax like Vancouver or similar, where international speculators are not using the units for anything useful to anyone in the city.

I can easily explain this.

Two buildings are for sale. They are identical in rental income, quality, etc.. and cost the same.

The only difference between the two buildings is that one has enormous restrictions on how you own and operate the building. You as a landlord will have a cap on your potential upside in rent, but NO cap in the downside.

Which building will you buy, all other facts equal? Unless you are insane, it will be the non rent-controlled building. As such, the price of the rent-controlled building will have to be lowered to compete for a sale. Hence lower prices.

What value does the expensive building offer the city if it's exactly the same?

You've actually just convinced me rent control might do a city good by pushing capital investors into more useful pursuits, rather than simply "investing in land" which effectively does nothing of value for people.

I do think it's silly to treat the symptom without fixing the main problem which is zoning law and permit restrictions on building more housing stock. But why not both?

Might as well add the Land Value Tax while we're at it

https://en.wikipedia.org/wiki/Land_value_tax

That might work if you want to live in a tent in the forest, but if you want to live in a city with buildings and infrastructure, then you want investors in invest in land.

Reply on news.ycombinator.com