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0 pointsbko6y ago0 comments

It is uninformed. Note that in a survey of economists ~80% of economists disagreed with the statement below and only 2% agreed:

> Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them. [0]

The negative effects of price controls, especially when it comes to rents is the most unifying issue in economics. Rent control isn't a new idea, but there is agreement that it's a bad idea. It's not the landlords who say this, its the people who study this stuff. Paul Krugman wrote about this in 2000 [1].

Putting in arbitrary controls on prices to fight cost increases is about as effective as putting arbitrary controls on thermometers to fight global warming.

[0] http://www.igmchicago.org/surveys/rent-control

[1] https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent...

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3 comments · 1 top-level

chmod7756y ago· 2 in thread

Your quote is completely irrelevant to this discussion, because increasing "amount and quality of broadly affordable rental housing" is not the goal of this law as described by your GP.

The law is supposed to give families enough time to adjust or move away and find affordable housing elsewhere, without becoming bankrupt in the meantime.

A completely different goal. Quoting opinions on something that is at best tangentially related does nothing.

leftyted6y ago

How is "economists broadly agree that rent control is bad" irrelevant to a discussion of rent control?

The intention of the law is what's irrelevant. What matters is what the law will actually do. Economists broadly agree that rent control will drive down supply. Are they right? Is this law different? Time will tell. But there's every reason to be skeptical.

HelloMcFly6y ago

This is not really an apples-to-apples comparison. Yes, it is a form of rent control, but it's not the "rent control" that people typically think of or was referenced in that quote given its link to SF and NYC. While there are some increase limits, they are large and not on a scale likely to have a material limiting impact. What is definitely impacted is the timeframe in which the changes are applied.

> Is this law different?

Yes, it is, both in intention (i.e., to give people time to move vs. enabling them to stay where they live) and in details. I think this will certainly reduce investment groups buying properties though, which I personally think is a great thing overall. I think that clearly something needs to be done, I'm glad California is trying to find a middle-ground here. Not to say they shouldn't also find ways to increase supply as well, but to me the two are not mutually exclusive.

But hey, maybe I'm wrong and totally off-base. I think it's a worthwhile bill though, and look forward to seeing the impact one way or the other.

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