"We have seen corporate landlords—who own a larger share of the rental market than ever before—use inflation as an excuse to hike rents and reap excess profits beyond what should be considered fair and reasonable."
My understanding is that rent control backfired pretty spectacularly in the long term.
The better plan here would be to stop companies from buying residential properties, to incentivized the conversion of commercial properties into apartments, to penalize banks and individuals who are sitting on unused residential properties.
Oh, and wipe out all student loan debt so that younger generations have a prayer of buying a house someday.
There’s also an underlying layer to this problem with a specific type of home owner: the foreign investor. These individuals use American properties to hide their wealth from their home countries. Tax evasion, high ROI, and increased scarcity in every purchase. Homes often go months and years without occupancy, sometimes with minimal furnishings so as not to appear vacant.
I’m not saying foreigners shouldn’t buy homes in America. However, if they do buy a home they should be required to occupy each individual property for a minimum of 6-9 months every year. Otherwise, a heavy tax that exceeds the property’s/ies annual appreciation to encourage occupancy or selling would be ideal.
Georgia had this problem decades ago and fixed it by lowering adverse possession requirements down to 13 months of occupation. It’s back to over a decade now but I liked that approach.
My understanding is that rent control backfired pretty spectacularly in the long term.
Yeah, the basic problem with rent control is that it creates the opposite long-term incentive from what you want.
Rentable housing is like any other good – it costs more when the supply is constrained relative to demand, costs less when supply is abundant relative to demand.
If rent is high, what you want is to see more housing built.
What rent control does is to cut the return on rents, which makes it less desirable to buy property to rent, which makes it less desirable to build property, which constrains the supply of housing, which exacerbates the original problem of not having as much housing as one would want in the market.
I would not advocate for it myself, but if someone is a big fan of subsidizing housing the poor, what they realistically want is to subsidize housing for the poor out of taxes or something. They don’t want to disincentivize purchase of housing for rent, which is what rent control does.
If you subsidize housing you create increased demand for housing, ultimately leading to rent going up for all.
So, as I said, I’m not an advocate of subsidizing housing out of taxes. I’m just saying that people who are arguing for rent control are arguing for a policy that tends to exacerbate the problem in the long run.
Subsidizing housing doesn’t normally run into that, because it’s normally possible to build more housing.
It is true that that’s not always the case, and one very real way in which that can not be the case is where there have been restrictions placed on constructing more housing. If housing prices are high, the first thing I would look at is “why can’t developers build more housing, and are there regulatory restrictions preventing them from doing so”. It is quite common to place height restrictions on new constructions, which prevents developers from building property to meet that demand, which drives up housing prices (and rents). In London, there are restrictions placed that disallow building upwards such that a building would be in line-of-sight between several landmarks. That restricts construction in London and makes housing prices artificially rise. Getting planning permission may also be a bottleneck. I agree with you that that sort of thing is the thing that I would tend to look at first as well: removing restrictions on housing construction is the preferable way to solve a housing problem.
I remember an article from Edward Glaeser some time back talking about how much restrictions on construction – he particularly objected to the expanding number of protected older, short buildings – have led to cost of housing going up.
How Skyscrapers Can Save the City
Besides making cities more affordable and architecturally interesting, tall buildings are greener than sprawl, and they foster social capital and creativity. Yet some urban planners and preservationists seem to have a misplaced fear of heights that yields damaging restrictions on how tall a building can be. From New York to Paris to Mumbai, there’s a powerful case for building up, not out.
Where’s all this housing being built as a result of sky-high rents? If they are being built, they’re being snatched up immediately by “investor” parasites.
What are you referring to? I don’t see all this new housing being built. I only know about three active sites in my city. I also know that our local zoning board has been rejecting applications because of neighborhood character.
I would run to serve but it’s an appointed position. Which yeah not great.
Part of the problem with rent control is that it doesn’t subsidize the building of new housing. The times in which housing prices dropped in the USA were typically when a government either opened up land to development, subsidized the building of housing, or built the housing themselves.
I’m not really worried about commercial landlords. Most of them are okay. A few are great, a few are slumlords.
What I’d really like to see is more and denser housing being built, period. And investment in infrastructure like public transit so that places are more accessible, more livable.
My understanding is that rent control backfired pretty spectacularly in the long term.
The better plan here would be to stop companies from buying residential properties, to incentivized the conversion of commercial properties into apartments, to penalize banks and individuals who are sitting on unused residential properties.
Oh, and wipe out all student loan debt so that younger generations have a prayer of buying a house someday.
There’s also an underlying layer to this problem with a specific type of home owner: the foreign investor. These individuals use American properties to hide their wealth from their home countries. Tax evasion, high ROI, and increased scarcity in every purchase. Homes often go months and years without occupancy, sometimes with minimal furnishings so as not to appear vacant.
I’m not saying foreigners shouldn’t buy homes in America. However, if they do buy a home they should be required to occupy each individual property for a minimum of 6-9 months every year. Otherwise, a heavy tax that exceeds the property’s/ies annual appreciation to encourage occupancy or selling would be ideal.
Georgia had this problem decades ago and fixed it by lowering adverse possession requirements down to 13 months of occupation. It’s back to over a decade now but I liked that approach.
Which sounds nice, but how do we prove they are or are not actually living there?
Utility usage? Pull up the last 6 months of, like, water use (since you need to have water so it’s a solid metric).
Yeah, the basic problem with rent control is that it creates the opposite long-term incentive from what you want.
Rentable housing is like any other good – it costs more when the supply is constrained relative to demand, costs less when supply is abundant relative to demand.
If rent is high, what you want is to see more housing built.
What rent control does is to cut the return on rents, which makes it less desirable to buy property to rent, which makes it less desirable to build property, which constrains the supply of housing, which exacerbates the original problem of not having as much housing as one would want in the market.
I would not advocate for it myself, but if someone is a big fan of subsidizing housing the poor, what they realistically want is to subsidize housing for the poor out of taxes or something. They don’t want to disincentivize purchase of housing for rent, which is what rent control does.
If you subsidize housing you create increased demand for housing, ultimately leading to rent going up for all.
Zoning reform is the solution. Cities are no place for single-family exclusionary zoning and height limits on housing
So, as I said, I’m not an advocate of subsidizing housing out of taxes. I’m just saying that people who are arguing for rent control are arguing for a policy that tends to exacerbate the problem in the long run.
Subsidizing housing doesn’t normally run into that, because it’s normally possible to build more housing.
It is true that that’s not always the case, and one very real way in which that can not be the case is where there have been restrictions placed on constructing more housing. If housing prices are high, the first thing I would look at is “why can’t developers build more housing, and are there regulatory restrictions preventing them from doing so”. It is quite common to place height restrictions on new constructions, which prevents developers from building property to meet that demand, which drives up housing prices (and rents). In London, there are restrictions placed that disallow building upwards such that a building would be in line-of-sight between several landmarks. That restricts construction in London and makes housing prices artificially rise. Getting planning permission may also be a bottleneck. I agree with you that that sort of thing is the thing that I would tend to look at first as well: removing restrictions on housing construction is the preferable way to solve a housing problem.
I remember an article from Edward Glaeser some time back talking about how much restrictions on construction – he particularly objected to the expanding number of protected older, short buildings – have led to cost of housing going up.
It looks like it’s paywalled, so here:
https://archive.is/jRQIm
Ah if you meant subsidizing housing construction I’m 100% with you
Where’s all this housing being built as a result of sky-high rents? If they are being built, they’re being snatched up immediately by “investor” parasites.
New construction is happening. Just not as fast as we need it. And the cost of materials isn’t helping.
What are you referring to? I don’t see all this new housing being built. I only know about three active sites in my city. I also know that our local zoning board has been rejecting applications because of neighborhood character.
I would run to serve but it’s an appointed position. Which yeah not great.
Sounds like you already know what one of the biggest issues is.
It’s so bad in California that the state legislature has been passing laws directly addressing city zoning boards that won’t approve housing.
Part of the problem with rent control is that it doesn’t subsidize the building of new housing. The times in which housing prices dropped in the USA were typically when a government either opened up land to development, subsidized the building of housing, or built the housing themselves.
I’m not really worried about commercial landlords. Most of them are okay. A few are great, a few are slumlords.
What I’d really like to see is more and denser housing being built, period. And investment in infrastructure like public transit so that places are more accessible, more livable.
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