Re:Rent Control Creates Higher Rents in SF
by wpietri on Monday March 16, 2015 @08:07PM
(#9215424)
There's no particular reason to think rent control is causing a shortage in SF. New construction is not under rent control, so it does not harm incentives to create new housing. And given the prices even rent-controlled buildings are selling for, it's clear that people are lining up to be landlords in SF.
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Don't forget that new construction in SF totally stopped for a few years after Lehman, and rents actually fell a little.
If rent control were actually causing a shortage, we'd expect that rents would have continued to rise during that time. Instead, the far more likely conclusion, given the data, is that rents are being driven mostly by increases in demand.
It is difficult for the armchair libertarian economists of HN to accept that, while rent control probably puts some upward pressure on rents (in theory, anyway), that effect is likely totally swamped by the demand-side imbalance.
Re:Rent Control Creates Higher Rents in SF
by nemothekid on Tuesday March 17, 2015 @12:01AM
(#9216206)
I'm not sure how strong that is - after Lehman the housing market collapsed, wouldn't it follow that 2008 crash had a greater effect on lowering rents as well?
Re:Rent Control Creates Higher Rents in SF
by nirvdrum on Tuesday March 17, 2015 @12:42AM
(#9216324)
I don't live in SF so I can't speak to that, but in the Boston area it caused rents to go up. No one wants to buy a house when home prices are falling month-over-month. A lot of people looked around and decided they didn't want to get locked in and risk being underwater. A lot no longer qualified for standard mortgages. Many people simply lost their jobs, so home ownership was out of the question. Plus the glut of foreclosures. But people still need a place to live, so the demand for rental units shot up even as home prices and mortgage rates were falling.