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Comment by ahoy | Hacker News Reader

The amount you pay is set by the people who get it.

It's set mostly by supply and demand across the market. The owner and the renter can get together and negotiate a small deviation based on the property's idiosyncracies, but it's the market that's primarily driving it.

The term for an opportunistic escalation in pricing (of a critical commodity) due to a rapid-onset shortage is price gouging.

Like many US markets, local rental prices have ~doubled in the last two years. As in every case of price gouging, sufficient supply would have prevented the opportunism that is presently causing broad harm.

Huzzah for supply and demand, I guess.

The alternative to "price gouging" is imposing some form of price controls. Since housing cannot be created out of thin air, that means some people will get lucky and everyone else will have to do without. I'm not sure that's any less a harm.

The alternative to price gouging is not price controls (that just redirects the pain into shortages instead). It's increasing supply. Housing can actually be built quite quickly - it's the bureaucratic stuff (permits, zoning, etc), which makes it take forever.

Right, pricing is following supply and demand. There's a lack of supply so the prices inevitably go up.

Increase the supply through deregulation or incentives and we won't have this problem.

Not really. Housing resembles nothing like a free market. Supply and demand is driven a lot by political forces (regulation, political favoritism) that effectively limit supply. Large land-owning political entities or blocs have outsized influence on these factors.

Just because supply is constrained by regulations doesn't mean that pricing isn't driven by supply and demand. Those two things aren't mutually exclusive.

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