I read recently that people in California think that rent control is a better solution to the housing crisis than building more housing by a large margin.
It startles me a little because if there is one thing all economists agree on (even the Richard K. Galbraith and Paul Krguman kind of economists) it is that rent control is a bad policy.
You know where housing is still pretty affordable and you can make a decent living even if you're poor? Houston, which famously doesn't have zoning. Granted, this can cause lots of other problems (many attribute a lot of the flood damage caused by Hurricane Harvey to overbuilding), but it seems very clear that if you want to have affordable housing, you have to build an f-ton of housing, and Houston has done that, while all of these over-regulated housing-crisis cities clearly have not.
No, I wouldn't say it is true. The things is most people on hacker news would agree that it is so because you have read it so many times before. But they can't actually specify what that actually is because that isn't really known. All that economists really agree on is rent control is unsurprisingly a worse way to allocate resources based on money. But that says little to nothing about the political and social costs which makes the economic discussion largely irrelevant. If rent control decreases market efficiency by 5%, but increases political efficiency orders of magnitude because people no longer fear that building more will force them to move, it is a worthy trade off. Similarly to achieve affordable housing without rent control in an already hot market requires the government to implement changes to the direct detriment of landlords and land owners, which usually isn't popular.
Economics isn't a field like others. It is very overtly political. Unless you know exactly what they can and can't prove, and to what degree they can prove it, it might not be relevant. Which isn't something you will actually find most of the time, because it often isn't.
A recent turning point is that the number of adult renters in major U.S. population centers is beginning to exceed the number of homeowners. As they age, they begin to participate more in the political process (despite the voting age being 18) and carry more clout. You end up with two major blocs of political power: (1) city council members vested in the status quo who want to strictly regulate new housing to preserve "neighborhood character" (i.e., property values); and (2) renters demanding rent control.
Strange bedfellows they may seem, but the two kind of go hand in hand in the sense that they've already got a sweet deal and want to protect it.
Houses don't appear immediately and isn't it a good idea to keep people in their homes while the supply grows (building new houses) and the economy stabilizes?
If (x = net present value) < (y = cost to develop) then I don't build.
And more importantly, disincentivizes maintenance and upgrades to older buildings.
Maybe, maybe not. It seems like a foregone conclusion among many people, but isn't backed by evidence or data.
Secondus, the people with the 20 million dollar Malibu mansions are the ones who pay for the politicians' campaigns.
https://news.ycombinator.com/item?id=20527867
If you want a simple answer, carapace's comment stood out to me:
- - -
It's because we're hella young out here. Relative to the East Coast anyway (I mean, London has Roman ruins...) Do an image search for old timey SF and you'll see: the Sunset was sand dunes until about last Tuesday, etc. Dudes used to pan for gold out by Lake Merced.
Also, this was the weirdo town. Bohemia on the Bay. Serious folk didn't really come here to be serious and sane. The old line was, "All the crazy people move to California, and all the crazy people in California move to San Francisco." To which residents add, "And all the people too crazy for San Francisco move to Berkeley."
So yeah, you've got a young town full of nuts and flakes that no one really paid much attention to until the last ~50 years or so, whadda ya expect, eh?
- - -
Before Web 2.0, only the weird Ivy League graduates would consider moving out to the Bay Area. Now the secret's out and everyone wants to move here.
Wait until you hear what Rome has!
I'd like to see less efforts to demonize NIMBYism and more efforts to eliminate the factors that make NIMBYism necessary.
This is the definition of NIMBYism.
Unearned income is obviously a net economic drag. I'm not saying there shouldn't be any, I want to retire some day too. In fact in German the word for retiree is "rentner." The problem comes when there is a permanent rentier class that simply extracts rents from the working economy. They are parasites. Most of the valid criticisms of capitalism are actually just criticisms of excessive rent-seeking. And that can exist under any economic system.