And then they vote against any new construction "to keep the neighborhood's character intact" (remember in the 50's when certain groups of undesirables were excluded from certain neighborhoods?)
> Without rent control, those who are more wealthy can afford the housing, those who are poorer are out of luck.
That creates an incentive to build more.
I prefer that. It's not just about wealth, but also about how much you want to live there. I know people who earn about as much as me and spend > 30% of their net income on rent because they want to live in a trendy area. I don't need to live there, so I was able to choose differently and pay ~12% of my net income.
Also: with wealth, there's at least some correlation with merit. With a lottery, there's none.
Secondly, why is the merit of high income more valuable than waiting in the line for longest time? None of them is a lottery in my opinion.
People invest internationally. This gives a strong bias for money to chase large metropolis because of agglomeration effects. So now "everyone" has to move to the city to work for the investor money. There are people who just want to get their fair share of the money. If you let someone live there that can't find a job that gets him investor money then he basically displaced a productive worker bee and made the entire economy worse off. Social mobility takes a massive hit as a result.
That worker bee could have earned enough to live in a newly constructed apartment. If he actually managed to get a rent controlled apartment then congratulation, you just subsidized one of the richer individuals.
Think about it this way, you want vulnerable people to afford their apartments. Why are you subsidizing every single apartment instead of subsidizing people in need? In fact, the subsidy is greater the more expensive the apartment is. You're subsidizing the rich.
> Secondly, why is the merit of high income more valuable than waiting in the line for longest time?
Because it correlates with useful stuff being done for society. Not perfectly, of course, but somewhat. Waiting doesn't at all. And it's usually not about "waiting", it's often about being part of some group, having the luck of the draw, knowing someone in the office that assigns priorities, or "inheriting" the right to live in some (publicly owned) flat from your parents.
What happens then? Person A lives in a very desirable place, person B does not, and person B has to subsidize A's flat.
With rent control, basically those who were there first get the housing, those who come later are out of luck.
Without rent control, those who are more wealthy can afford the housing, those who are poorer are out of luck.
If that was the only oversimplified way to see the effects of rent control, I'm sincerely not sure of what would sound better (or less worse) to me. I like when a city keeps its soul and doesn't slowly become a theme park for rich people (which is what I see in mine over the decades).