Category rent control

It is well known that rent control is not particularly effective in controlling rents; cities like New York and San Francisco have rent control and yet are quite expensive. Supporters of rent control, however, often argue that rent control is valuable for a different reason: it makes housing more stable, by making it more difficult for a tenant to be evicted for nonpayment of rent. But it seems to me that there’s an assumption hidden behind this idea: that the neediest people are the ones who are ordinarily most stable, and thus do not suffer from rising housing costs as long as they are protected by rent control or similar measures. For example, law professor Richard Schragger complains that pro-housing zoning reform will “redound to the benefits of investors and developers and not to those residents with limited resources who seek to afford to remain in place.” (emphasis added) In the next sentence, he adds that “those in the market for housing- including middle-class families, recent college graduates, and young families– are often priced out of high-cost urban markets. But reforms should be careful not to equate their interests with those of the working class and especially minority poor…” (emphasis added)* In other words, the “working class” and “minority poor” and people “in the market for housing” are somehow two separate groups. This assumption might be persuasive if poor people moved less often than other people. But neither common sense nor data support this idea. If you are poor, you might be less likely to have steady employment, which means that your income is likely to be unstable. Thus, you are more likely than other Americans to be evicted or to move voluntarily even if rents are stable. Even if you rely on government transfer payments, you are at risk […]

One of the most-common beliefs many leftists in America hold is that the staggering increase in apartment rents is not a result of not building enough supply but rather a combination of greedy landlords, corporations buying out rental properties, and landlords intentionally keeping units vacant to drive up prices. Take for example this recent post by my former San Francisco supervisor, the socialist Dean Preston. He claims that San Francisco could become affordable within a year, and proposes a set of regulations to be imposed on the rental market.  How to you allocate housing? But these regulations have one fatal flaw. San Francisco is a very attractive city. Even if the economy is worse than it used to be, the culture, geographical location and climate make it a place where thousands of people would love to live, and are currently blocked only by the high rental prices. If you artificially lower these prices (through legislation), you end up with way more demand that the supply can handle. Even if you think this is morally the right thing to do, you have to address the mismatch between the demand and supply you’re creating.  In other words: how will you allocate housing in the absence of the market mechanism?  When confronted with this question, American leftists usually do not have an answer, or provide some muddy explanation that still focuses on existing residents, as if their living situation was never changing: they never got married, divorced, their kids never grow up, they never leave for a reason other than being priced out etc., and as if there were no new potential residents who would like to move to San Francisco for whatever reason.  History provides a warning In the absence of their answer, we can look at history. In the Eastern Bloc […]