Housing policy megathread

[garbon]

San Francisco is not known as a cheap place to live.

Yes?

It is mad about rent control and yet has few affordable places to live. Headlines all the time about people not able to live near where they work as there is nothing affordable on the market.

As Brain says rent control only helps those who already have a place but makes life worse for those would like to move in. If you can get a rental controlled place it is grand as you won't be priced out but means those trying to get a place are effectively barred as one those on rent control aren't moving and there is only limited available stock at high prices.

Sheilbh has now spoke on it but it seems to me the best way to make sure there is affordable housing is more social housing.

[Gups]

Rent controls not only affect supply but disincentivise landlords from undertaking repairs/improvements. They are generally a terrible idea.

Re affordable housing v social housing. Affordable is generally regarded as cost neutral for developers. It sells for as much as it cost to build, so no profit. Social is significantly cost negative so generally requires public funding to make up the difference.

[garbon]

Rent controls not only affect supply but disincentivise landlords from undertaking repairs/improvements. They are generally a terrible idea.

Re affordable housing v social housing. Affordable is generally regarded as cost neutral for developers. It sells for as much as it cost to build, so no profit. Social is significantly cost negative so generally requires public funding to make up the difference.

In my part of London it seems like the council often lets developers slide affordable housing down to a smaller and smaller percentage.

[Josquius]

Think of housing instead as a human right

A human right that the property owner has to pay for and not you, the taxpayer.

Another reason I really should make the effort someday to go do a number 2 at the national toilet in Grantham.

San Francisco is not known as a cheap place to live.

Yes?

It is mad about rent control and yet has few affordable places to live. Headlines all the time about people not able to live near where they work as there is nothing affordable on the market.

As Brain says rent control only helps those who already have a place but makes life worse for those would like to move in. If you can get a rental controlled place it is grand as you won't be priced out but means those trying to get a place are effectively barred as one those on rent control aren't moving and there is only limited available stock at high prices.

Is it expensive because it has rent control or does it have rent control because its expensive?
As I understand it in SF the problem is far more challenging natural borders and restrictive planning laws that stop building up.

Sheilbh has now spoke on it but it seems to me the best way to make sure there is affordable housing is more social housing.

Yes. More rent control and more housing altogether are the ways to provide more affordable housing.

If only a significant portion of the world's population and economic capacity would have spent 50 years trying to make a closely state-controlled economic model work, we could put these debates to rest.

Scientifically its generally very hard to prove something but much easier to disprove it.
Correlation doesn't equal causation and there's a myriad of factors at play but in the UK...

It doesn't look different though. She basically concedes every point that mainstream economists say happens with rent controls.

Because these arguments completely miss the point

It's less an argument for rent controls than a socialist economy on housing. Which is fine. But I think it does mean that if you just have rent controls you'll get all of the dysfunctions observable in all the real world examples of rent controls. In part I think that's the mainstream economists argument is that rent controls as a policy does not work based on where it's been introduced because it is the solution. It is not part of a wider solution of massively increased social supply, stronger benefits etc - it is never part of moving housing to a planned economy.

This goes both ways.
People arguing that just get rid of rent control and you have the magical solution to our housing issues.

Rent control isn't meant to be a solution. Nobody who actually understands the issues thinks it is one. Its only ever meant to be a plaster on a severely messed up situation to dampen the pain a bit whilst actual solutions are persued.

It reminds me of the LSE academics argument that we don't need to build new homes because actually there is enough "space" in Britain's housing market, it's just distributed inequitably. The big example is a retired couple living in the family home that was big enough when they had kids but now more than they "need" and, if we reframe housing around "need" rather than as properties/assets, we have enough space.

They do have a point.
Its idiotic to take this to the extreme of we don't have to build any housing ever because there's a bunch of little old ladies in 4 bedroom houses in Galloway and if we just kick them out then London's homeless can move there.
But the points about some parts of the country being over-heated whilst others suffer, that maybe just as much as building housing we also need to be improving transport and spreading growth... Perfectly valid and worth considering. As is the difficult one about old people in houses that are now too big for them, there's a big quandary there.

[DGuller]

What a shocker that the hill Josq picked to die on happened to be the one that's overlooked by mountains from all sides except directly to the left of him.

[Razgovory]

Josq just likes to be wrong.  That's all I can figure.

[Josquius]

Great arguments. That's me convinced.

And Raz, you're the last person who can try and pull that one.

[Gups]

I'm not even seeing any correlation between your two graphs. The second seems to show rent increases outside of London  bumping along at roughly the level of inflation.

[Josquius]

I'm not even seeing any correlation between your two graphs. The second seems to show rent increases outside of London  bumping along at roughly the level of inflation.

I couldn't find the long term prices graph I wanted.

But outside of London its only really since covid that renting has become a nightmare in most places- though pretty sure it has been beating inflation.

Its not the sole factor but it seems pretty clear that a decline in social housing with its rent controls has led to an overall increase in rental costs; to the detriment of renters and local councils.

[crazy canuck]

The problem with the rental control debate is a lot depends on what controls are in place.

So for example, if a developer is permitted to have more density in return to for including some affordable housing units where the rent is controlled, that seems a good policy.

But if rent control means blanket restrictions so there are no market rate units, as Sheilbh noted, all economists agree that is terrible.

[grumbler]

If only a significant portion of the world's population and economic capacity would have spent 50 years trying to make a closely state-controlled economic model work, we could put these debates to rest.

There are none so blind as those who refuse to see.

[Razgovory]

Great arguments. That's me convinced.

And Raz, you're the last person who can try and pull that one.

What is 2+2?

A. 4
B. 4
C. 4
D. 4

Josq "I think I'll just write in "Green Party"

[Norgy]

Rent controls not only affect supply but disincentivise landlords from undertaking repairs/improvements. They are generally a terrible idea.

Re affordable housing v social housing. Affordable is generally regarded as cost neutral for developers. It sells for as much as it cost to build, so no profit. Social is significantly cost negative so generally requires public funding to make up the difference.

I agree.

In Norway, some local Labour councils, like in Oslo (and in my hometown) have tried creating "a third way".
Which basically means developers build, the building societies or the council foot the bill, and they offer it for rent to young couples with children and in five years or so, they can buy their house or flat because a part of the rent goes towards capital to buy.

I have tried, really hard, to look into the viability of these projects. And if it is actually helping the people it is supposed to help. So far, I would say it has with the local projects here, yet not as well as it was supposed to do, as building costs have skyrocketed during the pandemic and with the "energy crisis" increasing expenditure for council flats, capital for continuing the projects vanished. The idea was well-meant. Which many ideas are.

What is really driving up the cost of building here may be different from other countries, but it comes down to regulation. 1) Houses should be climate neutral. That costs. 2) We should build with wood. You can make your pun now.

Oslo's rental market really went to pot when people owning more than one house/home were taxed 100 percent for any building they did not themselves live in.

[Barrister]

The problem with any kind of "third way" is it creates all kind of unintended consequences.

So in my local neighbourhood there is a very large greenspace next to the school.  The city came along and said "hey wait a minute, while a lot of this is zoned as a park, part of it is set aside for a catholic school - and the catholic school board says it has no plans to build a school here".  So after quite a bit of local opposition (the area was used for soccer fields), they zoned it for affordable housing.

Now the design itself is quite attractive - it's a series of townhouses / 4-plexes.  It certainly did increase density in the neighbourhood but not in an obnoxious way, so besides losing the soccer fields I'm over the loss of the greenspace.

But they were required to be "affordable housing".  So what happened is you had to apply to buy.  You had to have certain income thresholds, and you weren't allowed to sell for a period of time (to avoid flippers).  But then you got to buy a home at below-market rates.  Which is great for those purchasers - but your below market rate is being subsidized by everyone else.  And if you sold after your allotted time period - why you then get a windfall.

Or government-run social housing.  So Alberta doesn't have government-owned housing (instead we have rental supports) but Manitoba does.  It owns a series of buildings that it rents out for below-market rates to those in need.  Which again is great for anyone who can get a spot - but the waiting list can be years long.  There's also a fairly strict income test - which can have people decline to take jobs that would put them over the limit, as it would mean losing their social housing.  It also means you can't move without again going back on a list - so you can't move to be closer to a new job, or to get away from an abusive partner, or any of a number of situations.

[Valmy]

Yeah all of those things have been known for a long time. And the part about creating a disastrous situation where you cannot afford to do better or risk being kicked out on the street is especially problematic. Or situations where you are incentivized to have kids you cannot afford.

But is it better to not do anything at all? We have tried that for several decades and that doesn't look great either.

It is a conundrum and one of the reasons I was so in favor of trying something like UBI as a possible solution.