A recent paper by UCLA researchers discusses 2019-20 literature on the relationship between new construction and rents. The article discusses five papers; four of them found that new housing consistently lowers rents in nearby buildings. For example, Kate Pennington wrote a paper on the … [Read more...]
No, this study does NOT support refusal to build housing
A recent headline in the Forbes blog screams: "Additional Housing Won't Make City More Affordable, Says Fed Study." This blog post cites a Federal Reserve Study showing that adding 5 percent more housing in the most desirable urban neighborhoods would lower rents by only 0.5 percent. But if you … [Read more...]
Does Density Raise Housing Prices?
My last post, on urban geographic constraints and housing prices, led to an interesting discussion thread. The most common counter argument was that because dense cities are usually more expensive, density must cause high cost. But if this was true, cities would become cheaper as they became less … [Read more...]
Does Home-sharing Create Negative Externalities?
A decade or two ago, a traveler who wished to stay in a city temporarily had no alternative to a hotel. Even if the owner of a house or condominium wished to rent out a room for a short period of time, the costs of advertising in a newspaper would have at least partially canceled out the … [Read more...]
Are Billionaires To Blame?
One common argument I have read in various places is that the high rent of New York and other large cities is a result of globalization and inequality (English translation: rich foreigners). According to this theory, rich people have created a surge of demand so overwhelming that no amount of … [Read more...]
Rent Control Part 3: Mobility, Regional Growth, Development and Class Conflict
Part One of this series was a refresher on the Microeconomics of Rent Control and touched on how it encourages hoarding Part Two discussed rent controls influence on the black market for apartments, rental property deterioration and housing discrimination. Here in Part Three, we will discuss how … [Read more...]
Rent Control Part 2: Black Market, Deterioration and Discrimination
With New York's new Governor's rent subsidized by his landlord and California debating the best ways to end rent control through Proposition 98, I thought it was a good opportunity to discuss the negative aspects of rent control. This post is the second in a four part series on the rent control. … [Read more...]
Rent Control Part 1: Microeconomics Lesson & Hoarding
This post has been released as the first in a four part series: Rent Control Part One: Microeconomics Lesson and Hoarding Rent Control Part Two: Black Market, Deterioration, and Discrimination Rent Control Part Three: Mobility, Regional Growth, Development, and Class Conflict Rent Control Part … [Read more...]