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relliott22 t1_j7333xf wrote

Reply to comment by Splime in State lawmakers introduce bill to bring back rent control by HRJafael

I'm not arguing for the status quo, or for no government intervention. I think that we should use government policy to subsidize construction. What you seem to be advocating for is socialized housing, which tends to be inefficient. It's hard for central planners to know where to build the right amounts of the right types of housing. Markets allocate these resources much more efficiently. That's why even social democracies in Western Europe still have private housing markets.

I'm trying to get you to understand that imposing price controls exacerbates the problem in the long run by making the supply problem worse. No one wants to supply the demand for rent controlled apartments, so new rent controlled apartments don't get built and existing rent controlled apartments get converted into condos which further decreases supply and makes the problem worse.

Your heart is in the right place, but the solution you're advocating for doesn't work. We see this both in economic theory (if you artificially decrease the price of a good you will artificially decrease the quantity supplied, basic econ 101), and in empirical evidence when we examine places where rent control has been tried.

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Splime t1_j73fru1 wrote

Ok, sounds like we're closer in thinking than I thought then. I think you're underselling socialized housing somewhat - it's definitely less efficient at a smaller scale, but if you need a lot of housing in bulk then that central planning becomes a benefit. I think some combination of both (such as in Austria) could work, but no fully market-based solution is going to cover everyone.

I guess the thing is, I know price controls can make the supply situation worse. I think the impact is overblown - there's still going to be developers who can turn a profit if the controls aren't too onerous, but there is a negative impact. In my opinion though, it's a worthwhile sacrifice in the short term to avoid evictions and displacement.

There's got to be some sort of compromise here, IMO - like, that's why I mentioned 10% (very arbitrarily), it's still above inflation usually, still allows for developer profit, but doesn't allow for insane price hikes all in one go. With enough supply, that kind of rent control would be de facto pointless anyway. The places where rent control failed are usually because they never bothered to actually fix the supply constraints. Maybe artificially lowering the price a little didn't help the supply, but single family zoning and long arbitrary approval processes for multi family housing are a much more significant artificial limit to supply. I don't think it's all or nothing - there's a certain amount of rent control you can get away with if you remove enough supply restrictions, there's got to be some sort of balancing act possible here.

I guess what I'm saying is, the whole concept of rent control shouldn't be written off just because people expect it to "solve housing". It's an often misused tool with some drawbacks, and there are better ways of providing housing stability (such as social housing), but when done properly it can be a net positive. Or put more succinctly, rent control of a private market is probably the worst way to reduce evictions and sudden rent hikes, but it is a way of doing that. And apparently that's the best we can expect from our politicians :/

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relliott22 t1_j73lzrq wrote

Yeah, that's not a ringing endorsement of the policy. And the bill in question simply lets towns and cities impose rent controls at their own discretion. I cannot in good conscience support that bill. It's a bad idea that will make the housing problem in Massachusetts worse with no guarantee that it will have any positive impacts.

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