If you want to use rent control as a means to ensure individuals of various levels of wealth intermingle… then there is a conversation to be had. But it completely fails to make housing more affordable overall.
Everything else is just nonsensical hand-waving people use in an attempt to justify why various schemes they favor are not working yet again.
So yes 2400 units is a start, but we need dozens more like it before we start to even come close to solving the shortage.
But not 50,000 new residents. Adding jobs doesn't necessarily mean more people, just more employed people.
Instead what happened is that new residents came to the city for high paying jobs and bid up the prices for local apartments. Basically a cruel game of musical chairs where low-income households were forced from their homes and into cheaper neighborhoods in the surrounding cities. (Those poor neighborhoods actually did grow in population faster than housing: people were forced to pack into overcrowded living conditions)
If you're curious about the numbers, over the last 40 years Cambridge added about one housing unit for every four new jobs
Rents go up, because price ceiling is removed. Idea is that in the future supply increases and you don't have to wear a suit when looking for a flat
They don't have to. We've had price ceilings in the US in many places for over 60+ years without ever experiencing a shortage. (In my hometown, for example, education is price-capped, electricity is price-capped, water + sewer are price-capped, natural gas is price-capped. No shortages since the 1950s).
You just have to require reasonable regulations on the industry, and strictly enforce those regulations. Heavy Regulations + Price Ceilings is the magic combo for success, more or less.
Whereas the politicians won't care that a large percentage of would-be new residents for their city can't get in and have to commute. In fact, it's a perverse incentive: the locals love the lower rent, and there is no one to vote out the politicians that like rent controls.
Agreed, but this is true of housing as well. Housing "has to" work, or you end up with a huge commuting and homeless population (and the state of being homeless is effectively a crime in the US).
> In fact, it's a perverse incentive: the locals love the lower rent, and there is no one to vote out the politicians that like rent controls.
It's not perverse, it's a good incentive. Locals love lower rent from rent control, so the commuters who don't have it should be incentivized to also vote for rent control, and it's a great idea that should continue to spread. In a ideal world, every rental unit in the nation would be under a strict rent control (just like how power/water/sewer/natgas often is).
Not to mention, designing metro areas to require long commutes basically amounts to climate arson
Housing is completely different for many reasons, primarily:
1. Housing isn't provided by a single entity, it's a market that a majority of people will participate in. All of the things you listed are one-to-many, not many-to-many.
2. Difference in quality for different price points. You either have electricity or you don't. You either have natural gas or you don't. This is obviously not the case with housing where there are limitless price points and differences in quality. Unless you're suggesting that the government build all homes, this won't work.
3. You want the effects of the market to drive development and settlement. Manipulating the prices of NG has little consequence outside of providing a steady supply to the users. Manipulating the prices of housing won't allow development to fulfill market demands in price point, location, etc...
Housing and land require further analysis due to inelastic supply of land, and huge restrictions on construction, both for political and safety reasons.
The biggest determinant of supply of housing is not the ability to charge more for it, but all the other challenges around building.
So it's not a "price control" as much as it is a control on rentierism, on existing rentiers taking unearned profits without working.
Here is an idea: Measure average rent per sqft. Put a 20% tax on rent above the average and use it to subsidize low income households. That way you tax wealthy tenants and subsidize poor tenants.
What there is is a lack of accommodation where people want to live.
Ultimately people need to be persuaded or given a good reason to live elsewhere.
And that is in addition to having the right supply curve in the first place. The potential shortage of supply created by a price ceiling may very well be irrelevant when supply decreases from other factors.
Yes, but "doesn't work" is a bit of a loaded term. Economists agree that rent control is not the most profitable way to price housing, but since the whole point of rent control is to prevent aggressive profit-seeking in housing, economists "agreeing it doesn't work" is intentionally the goal.
Rent controls job is not to make more housing (it has no control over that). Rent control's job is not to make housing cheaper (it has no control over that). Rent controls only job is to provide housing security for existing renters, and the vast majority of the time, it's successful at doing that.
If you also want cheaper housing overall, your supposed to pair rent control with a matching set of changes for non-rent-protected residents (like say, pair it with new construction of additional public-owned public-operated housing).
At a cost to everyone else.
It doesn't. There is no cost to anyone else, unless you believe all purchases of all products automatically hurt someone else (since every purchase you make technically reduces overall supply by the amount you purchased)
I don't think it's crazy to say that rent control helps those in it and hurts those that aren't in it. That's not the tenant's fault, but we can't pretend that rent control doesn't have an effect on the supply of rentable apartments.
Hard disagree, it's crazy to claim that rent control hurts affordability. Rent control does not "hurt" anyone not in it. The lack of humane regulation on housing is hurting those people, and rent control is just getting slandered in the cross fire. What most people interpret as "rent control causing" is in reality "the lack of enough rent control causing".
It's like looking at a car crash, and saying "see, seat belts didn't protect the non-wearers, those seat belts just selfishly protected only their own wearer, and even created more empty space for the non-belted to get extra physical damage. Seat belts hurt all those not belted, the policy itself of offering seatbelts 'causes' damage to others."
A better analogy would be a city bus. If I take 10% of the seats and allow people to reserve them for personal use indefinitely, that makes the rest of the bus more crowded. The act of renting those seats out limits the supply of other seats, making the rest of the bus more crowded. It doesn't "cause" damage to the riders in the 90% of the bus, but pretending this policy hasn't made things more crowded would make no sense.
But it doesn't. Rent control never takes away any supply. Even if rent control were fully abolished, that same person would still need the same amount of housing (presumably even in the same unit). From a "supply" perspective, it's literally a 1 to 1 -- no change in unit counts, up or down, in any way.
Rent control has no influence over "supply" (unless you are secretly hoping to force a lot of humans into homelessness or something). Rent control only determines how much a person is forced to pay to keep their own housing (housing already built, and that they already occupy) consistent.
> Your seatbelt analogy implies that anybody, at any time, can obtain rent control.
Correct, and that's absolutely true. Generally speaking, legislators could pass a law today to give everybody and anybody rent control (at either the municipal / county / state or federal level). It's literally just a pen stroke away.
There was a time when seatbelts weren't law, and it was harder to obtain them. We recognized how unequal of a situation that would make things, and thus mandated through regulations via law that all cars have them. (Just as right now, it's really unequal for some people to have rent control, but others don't).
Generally, every argument against Rent Control, is really an argument about how it sucks that they don't get rent control themselves. The problem is not rent control, the problem is a lack of enough rent control. If rent control was universal (applied to 100% of rental units) then most of the perceived problems with it would vanish overnight.
> If I take 10% of the seats and allow people to reserve them for personal use indefinitely
That's not an better analogy, it's a unfair one. Rent control does not give people the ability to reserve lots of housing units indefinitely, and rent control doesn't actually distribute or redistribute anything. It lets households pay for one (1) unit at real-world rates (which is exactly the same amount of housing they'd still need and use without any rent control, except that household would suddenly have to give a bunch of extra money away for literally no reason).
Why would I build a new apartment building if it was going to be rent-controlled? Why would I rent my units if they were going to be rent controlled? There's evidence that the availability of rentable spaces decreases in the presence of rent control. These policies have had an effect on supply.
If I can't afford a down payment, and I also can't get rent control (because of the length of the waitlist), it's much more difficult for me to find an apartment to rent even though the number of buildings is still the same.
>that same person would still need the same amount of housing (presumably even in the same unit).
Rent control can actually cause people to stay in a larger or smaller apartment than they actually need. If I have to give up rent control to move, why would I do that? I'm incentivized to stay in an apartment regardless of whether or not it's the right size. I could have needed that two bedroom flat when I was raising a family, but now that my family has left I don't need the space. However, rent control means that it's actually comparatively cheaper for me to stay in a large space.
>The problem is not rent control, the problem is a lack of enough rent control. If rent control was universal (applied to 100% of rental units) then most of the perceived problems with it would vanish overnight.
Price controls reduce the incentive to produce rentable units. It's the reason that price controls tend to result in shortages; why would I produce a price-controlled unit if I can't make a profit on it? Why would I continue renting a unit if there's a chance it gets rent controlled? Most studies I've seen have indicated that when rent control is implemented, the number of rentable units decreases.
I suppose the argument could be made that renting is itself a bad thing, and that converting all rentable apartments to units that can be purchased is a good thing. I could see that argument.
> Rent control does not give people the ability to reserve lots of housing units indefinitely, and rent control doesn't actually distribute or redistribute anything.
In practice, rent control functions much like my analogy. If I'm in a rent-controlled apartment, I'm unlikely to leave. Why would I, especially when my rent won't change significantly if I stay? I can't get a better deal elsewhere. It also means that the landlord is unlikely to want to rent that apartment again when I leave, because they're uninterested in getting rent-controlled.
But that is the problem: it makes housing so much more expensive. It definitely has a control over that.
I don't think that that's what economists are talking about when they say rent controls "don't work". I think the consensus is more specifically that it is not an effective way to increase the total supply of affordable housing. For example, see this survey [0] of notable economists where 2% agreed that:
>Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them.
Reading through the economists' comments, the consensus seems to be: 1) helps incumbent renters by reducing pricing for them, 2) reduces total supply, 3) hurts non-rent-protected residents (mediated by 2).
Possibly the answer is still "doesn't matter, achieved 1)", but I don't think it's fair to characterize it as a magical policy lever that only hurts profiteering landlords.
An easy example is take something simple like 'give food to the hungry who can not afford it'. Sounds nice. Easy to do. Does not really seem to hurt anything. But that can have a inflationary effect on food prices if done too much and too rapidly. Thus creating more 'hungry' people who can not buy food, as maybe their wages are not keeping up. Then causing more money to be injected in to 'fix the issue' again causing inflation. Creating a cycle that can only be broken by hurting a lot of people. That is just one side effect. There are several others. Rent control is similar.
The trick is how do you 'fix' things without creating bad cycles? It is not as easy or handwavy as many make it.
For example, the Greek government cut welfare benefits only for the government to lose the next election and the new government to reinstate welfare. This is the "cut the wasteful spending" type of austerity, meaning it's the least bad form of austerity. If you were to cut healthcare, infrastructure or core industries you could easily end up worse off than without austerity. Guess what the Greeks did? They sold their most important assets (ports and ships) to China.
Really, the problem with debt is that the person holding onto the money that the debt created decided they want to wait it out and spend their money later. In essence, the problem is that the interest rate on the debt is too high. If that person were to spend all his money, the debt would be gone assuming effective taxation.
Meanwhile the IMF will tell literally every country in trouble to do austerity to qualify for support.
It's useful to know something doesn't work like a proponent would hope, but I don't think it's all that helpful if everything else the economists propose as an alternative, including the status quo, doesn't work either.
If the economists can't find a solution, perhaps it has to fall back to moral imperatives and which values to prioritise. Specifically, which is more important, letting people who have lived somewhere much of their lives stay there, or forcing them out into unfamiliar places with no connections so that new, wealthier people can take their place.
The answer is to build more to outpace demand but that's very difficult for so many reasons including zoning, factions opposed to growth, difficulty scaling supporting infrastructure and services, etc and we're left discussing bandaids to be applied on top of the crusty remains of hundreds of old bandaids covering up the festering wound, so to speak
A deep dive into rent control by a left leaning economist. Start from 21 min mark.