What your response misses is the time component of vacancy.

If I have rent control, I will list at a higher price and let the property sit vacant for longer to find a tenant because the law says that I am limited in the ability to later adapt the rent to the market.

Without rent control, there is much less incentive to leave a property vacant, looking for a tenant willing to pay a higher price point.

Most microeconomics courses teach that markets don't have one price for a good, and one of the lessons will be in strategies, such as coupons, that owners of goods use to sell into the market at multiple prices. There isn't a single number that a landlord can rent a unit out for in a given market.

Except that in SF, a landlord can get a tenant for nearly any price, because demand really is that high, and supply really is that low. On the occasion that a rent controlled apartment goes back into the market in SF, it's snapped up within a week, even if the listing price is set above market rate. A savvy renter (which you have to be, if you want to get a place in SF) will know that they're paying a higher price for a much more stable rent year over year.

That's actually a really good point. One could argue that value of rent control is priced into the rent.

I've know plenty of people who winced at the rent they paid, but told themselves that in 5 years it'll be worth it as the rent will be below market.

>in SF, it's snapped up within a week, even if the listing price is set above market rate

That makes it the market rate for the apt though. You'd be above market rate if it didn't get rented out in a normal timeframe.

No it's not; that's a pretty circular definition. Determining the market rate involves comparisons with similar units in the same neighborhood.

So... in other words, what you're missing is a punitive tax on vacant property, as an incentive to rent asap - at any price.

Keep adding obligations to landlords to the point no one wants to be one. Then, if you can't, for any reason, secure a mortgage your only alternative is homeless. Sounds like a good idea.

Real estate, by multiple measures, is the most profitable industry in the US private sector. It is heavily taxed and regulated because it is a money-printing machine. We are not in danger of there being no landlords.

[1] https://ftalphaville.ft.com/2016/03/29/2157698/ranking-ameri...

Exactly! If the landlord can get a tenant to pay $5000 per month, then the market rate for that particular unit is $5000 per month.

No, not exactly. In the scenario above, the landlord obviously has to keep the property vacant for some time at $5000/month, much longer than at $3000/month. But because it is a near-certainty the real price would go to $5000/month in 5 years - but he is unable to increase rent to that if he rents out today at $3000/month due to rent control (and this is critical) - he would rather keep it vacant until someone comes along and pays the higher amount.

If not for rent control, he would charge $3000/month now at market-clearing rates, get a tenant in there in 30 days, and increase rent by the standard market price every 12 months. But due to rent control undercutting profits, he can't do this, so he keeps it open at a higher price.

I was going to refute your (uncited) comment, but it appears that San Francisco's vacancy rate has increased from 4.9% to 8.3% over ten years, affirming your position.

http://www.bayareacensus.ca.gov/counties/SanFranciscoCounty....

There's really no citation available so to speak for my comment, unless you want citations in Economics texts. It's fairly rational activity by landlords (or anyone who has controlled supply of any good/service) to take. The vacancy rates aren't surprising to me but there are other effects that cause that number to rise/fall, not just rent control (though the arrow is in the expected direction based on policy).

It's unclear from those stats the reason for the vacancies, though. I've read about a lot of foreign investment that is buying up properties and then intentionally leaving them vacant, or are using them as vacation homes or vacation rentals.

>and increase rent by the standard market price every 12 month

That's not what he would do. Tenants tend to value a property more as time goes on. Beyond increasing market rates.

Without rent control, your rent will increase faster than the average market increase would indicate unless you move very often. Rent control may not be the optimal way to combat this, but it is something many societies recognize as a problem.

In a place with higher supply and less demand, I'd absolutely agree with you, but in SF, that property will get snapped up within a week regardless of whether it's listed at $3k or $5k.