Housing policy arguments remind me of the classic Noam Chomsky observation that vigorous debate is allowed but only within a strict fenced area. The predicament for politicians is that legalizing housing -- a property rights issue if there ever was one -- stirs the wrath of their financial backers. The same people who bail out banks aren't going to suddenly support policy that liberates people from big banks. Still, things can get better in the end because land use regs are a local issue and we all know it's far easier to enable human flourishing locally than nationally. I'm hopeful for a future of abundant housing.
Yes, I think this is perhaps a downside effect of raising the salience of the housing issue not only in the culture but /to/ the national level. In part because federal politicians have few policy tools to work with, and in part because the national political theater is, well, theater, I'm not surprised that a national "coalition" would converge on populism, which demands an enemy. My major concern with any of this is that it might poison the well downstream and fracture local YIMBY coalitions, making it harder to do local-level reform. Already in Texas, we've seen both the governor and some Democratic state reps converge on the "institutional investors bad" line and not any kind of supply-side reform, which doesn't bode well for the next legislative session. So, perhaps national pols should pay less attention to housing, if this is the direction they're heading.
You wrote, "Meanwhile, the loss of institutional investors would lead to fewer options for people struggling with housing affordability, while landlords would do what they always do when the government makes their business models illegal: they become slumlords."
Not always. "Slumlords" still need to cover their costs.
When things get bad enough, property owners walk away (or in a few cases, burn down buildings to make insurance claims)...which is what happened in NYC in the 1970s following the Rent Stabilization Law of 1969.
Of course, there are some landlords that can afford to sit on properties that are losing money. There are currently more than 80,000 vacant rent stabilized apartments in NYC. When the costs associated with tenancy are greater than costs of holding onto vacant apartments, landlords will make the rational decision. Without building a single building, NYC could have 80,000+(!!!) new apartments simply by freeing up the rental market.
In other words, the policies can be so draconian that the landlords can't even afford to *be* slumlords!
In my response to an earlier comment, I added the link to Thesis Driven's article on NYC's rent stabilization fiasco—good reading about a terribly destructive policy. New York's housing shortage is man-made.
I disagree with how damaging these proposals are. I absolutely agree with zoning reform - I’m a YIMBY but private equity absolutely, in multiple cases, ruin perfectly good businesses by chasing outsized profits and there’s nothing terrible about trying to drive them out of this market. Being a slumlord is/should be illegal. Moms and pops often charge more reasonable rental prices as they know and can empathize with their tenants - and ABSOLUTELY NO ONE is really hurt by this - the tenants benefit and the landlords are still reasonably rich. It’s making/keeping this relationship human. And yes rent control on some units slightly distorts the market but A. the distortion is arguably small and B. The benefit is considerable when you consider how traumatic and violent to the lives of the poor multiple evictions are - often causing them to fail to exist poverty and for the kids to be traumatized resulting in less chance of their future economic success so in the end society ends up paying for the lives the evictions ruined. Stability in where one lives is super important to kids and seniors (life changing important!) and also important for everyone else. Humans are not homo economicus and it’s important to remember that.
I disagree and, respectfully, the data does not support your claims. Rent control lowers rent but it also lowers the quality of the housing in which people live; the buildings become "slums" because the landlords cannot afford the cost of upkeep when operating expenses and property taxes continue to rise. It also creates artificial scarcity in the market, as Krugman identified 24 years ago, leading to price increases on market rate rentals—which leads to displacement. If you only look at the people who "benefit" from rent control, you miss all the people who are otherwise affected. People, broadly speaking, are absolutely hurt by these policies, including the landlords. NYC's rent stabilization program offers dramatic lesson: https://www.thesisdriven.com/p/the-sad-tale-of-nycs-rent-stabilized
"hillbilly whisperer J.D. Vance" 😂
I had too much fun writing this one. 😂
Housing policy arguments remind me of the classic Noam Chomsky observation that vigorous debate is allowed but only within a strict fenced area. The predicament for politicians is that legalizing housing -- a property rights issue if there ever was one -- stirs the wrath of their financial backers. The same people who bail out banks aren't going to suddenly support policy that liberates people from big banks. Still, things can get better in the end because land use regs are a local issue and we all know it's far easier to enable human flourishing locally than nationally. I'm hopeful for a future of abundant housing.
Yes, I think this is perhaps a downside effect of raising the salience of the housing issue not only in the culture but /to/ the national level. In part because federal politicians have few policy tools to work with, and in part because the national political theater is, well, theater, I'm not surprised that a national "coalition" would converge on populism, which demands an enemy. My major concern with any of this is that it might poison the well downstream and fracture local YIMBY coalitions, making it harder to do local-level reform. Already in Texas, we've seen both the governor and some Democratic state reps converge on the "institutional investors bad" line and not any kind of supply-side reform, which doesn't bode well for the next legislative session. So, perhaps national pols should pay less attention to housing, if this is the direction they're heading.
You wrote, "Meanwhile, the loss of institutional investors would lead to fewer options for people struggling with housing affordability, while landlords would do what they always do when the government makes their business models illegal: they become slumlords."
Not always. "Slumlords" still need to cover their costs.
When things get bad enough, property owners walk away (or in a few cases, burn down buildings to make insurance claims)...which is what happened in NYC in the 1970s following the Rent Stabilization Law of 1969.
Of course, there are some landlords that can afford to sit on properties that are losing money. There are currently more than 80,000 vacant rent stabilized apartments in NYC. When the costs associated with tenancy are greater than costs of holding onto vacant apartments, landlords will make the rational decision. Without building a single building, NYC could have 80,000+(!!!) new apartments simply by freeing up the rental market.
In other words, the policies can be so draconian that the landlords can't even afford to *be* slumlords!
In my response to an earlier comment, I added the link to Thesis Driven's article on NYC's rent stabilization fiasco—good reading about a terribly destructive policy. New York's housing shortage is man-made.
I'll take a look.
I disagree with how damaging these proposals are. I absolutely agree with zoning reform - I’m a YIMBY but private equity absolutely, in multiple cases, ruin perfectly good businesses by chasing outsized profits and there’s nothing terrible about trying to drive them out of this market. Being a slumlord is/should be illegal. Moms and pops often charge more reasonable rental prices as they know and can empathize with their tenants - and ABSOLUTELY NO ONE is really hurt by this - the tenants benefit and the landlords are still reasonably rich. It’s making/keeping this relationship human. And yes rent control on some units slightly distorts the market but A. the distortion is arguably small and B. The benefit is considerable when you consider how traumatic and violent to the lives of the poor multiple evictions are - often causing them to fail to exist poverty and for the kids to be traumatized resulting in less chance of their future economic success so in the end society ends up paying for the lives the evictions ruined. Stability in where one lives is super important to kids and seniors (life changing important!) and also important for everyone else. Humans are not homo economicus and it’s important to remember that.
I disagree and, respectfully, the data does not support your claims. Rent control lowers rent but it also lowers the quality of the housing in which people live; the buildings become "slums" because the landlords cannot afford the cost of upkeep when operating expenses and property taxes continue to rise. It also creates artificial scarcity in the market, as Krugman identified 24 years ago, leading to price increases on market rate rentals—which leads to displacement. If you only look at the people who "benefit" from rent control, you miss all the people who are otherwise affected. People, broadly speaking, are absolutely hurt by these policies, including the landlords. NYC's rent stabilization program offers dramatic lesson: https://www.thesisdriven.com/p/the-sad-tale-of-nycs-rent-stabilized