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Comment by tptacek | Hacker News Reader

A better way for him to have put it would have been: "Just like the Indiana state legislature can't by statute declare pi to be 3.14, San Francisco cannot repeal the law of supply and demand".

Rent control or not, the law of supply and demand still applies; it just expresses itself in more dysfunctional and unproductive ways.

That's the problem with rent control. Reasonable people can disagree about whether the public policy goal of getting people affordable housing trumps the rights of property owners. But they can't disagree about how many digits are in pi, or about whether rent control works. It doesn't work. It harms everyone in the market except for a lucky subset of tenants.

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"Rent control or not, the law of supply and demand still applies... or about whether rent control works. It doesn't work."

Without rent control, I'm pretty sure that a LOT more people would be pushed out of San Francisco. It seems to me that places like San Francisco, New York, and a few other places are not typical of what other areas experience. I know it's fashionable amongst the libertarian set to blame problems on regulation, but there is much more going on here than simple rent control.

Yes, there is a lot more going on:

http://techcrunch.com/2014/04/14/sf-housing/

Rent control isn't the answer, though. More housing is.

The general response from economists seems to be that rent control suppresses growth in the supply of housing that could otherwise address the cost of housing.

Zoning suppresses growth in the supply of housing. Of course, that doesn't mean that zoning is bad by definition. Instead of artificially keeping building height low, you could mandate new buildings have at least so many stories.

San Francisco's problem seems to be that they can't possibly build enough housing to meet market demands without revising zoning restrictions in ways that would make current home owners angry.

Zoning also suppresses growth in the supply of housing, but so does rent control. People don't build apartment buildings out of altruism.

You are right and I wasn't thinking things through.

Still, I submit that fears of extending rent control to new construction add to the problems caused by zoning.

I agree with you. But what does that mean? Why is it inherently a bad thing? It could have a dramatic effect upon other areas like Oakland (revitalization) Or maybe it spreads further and wider than the Bay Area or even CA. If those folks are driven out it would change the character of San Francisco. Suddenly it'll be just wealthy people side by side with wealthy people and lose it's appeal. That in turn might take the heat out of the market and recreate more affordable neighborhoods that draw back in future people at lower income levels.

> Without rent control, I'm pretty sure that a LOT more people would be pushed out of San Francisco.

Are you saying you think fewer people would live in SF without rent control?

This is an interesting topic. Eviction inflicts a disproportionate harm to those least-equipped to bear it. While rent-control inflicts a purely proportional harm to those best-equipped to bear it. But rent-control also inflicts a difficult-to-characterize harm in the form of stagnant rental construction.

I would be totally cool with a city deciding to make the first tradeoff as a public policy goal, if the construction stagnation (across all rates) could be mitigated. Have there been any successful experiments in that area (I'm only familiar with the craziness of NYC's implementation)?

In San Francisco (the subject of the post), houses built after 1979 are not covered by rent control[1]. This "new construction exemption" was designed to avoid stagnation in rental construction.

[1]: http://www.sftu.org/rentcontrol.html

Regardless of whether rent control works or not, my point was that it's not pointless to legislate around things like this. 'Laws of nature' get legislated around all the time. Look at violent crime and the natural law of 'might makes right' as one example. Cigarettes here in Australia are another example of legislation changing supply and demand.

As an aside, pi is a fixed constant, whereas 'rent control' is an incredibly complex concept that relies on many other complex concepts - for example, what does 'rent control' mean in a communist country? For a nomadic tribe? It relies on certain concepts around property ownership and capitalism. Which is fine to say it doesn't work as it is in SF, I'm just pointing out that there's a lot more flex in the concept than in the constant 'pi' :)

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