Housing policy megathread

[Valmy]

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.

 

I can certainly see how that might have that effect.

[Syt]

I would already be happy if 80+% of rentals in Vienna weren't fixed term (usually 3-5 years).

[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.

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.

Yep construction costs when crazy in 22/23 but have calmed down now (but still very high). There are also lots of other things that developers now have to worry about that they didn't used to - biodiversity net gain, energy efficiency etc.

[Barrister]

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.

UBI has been shown to be a really mixed bag though.  It seems to increase basic health incomes (I mean people are healthier if they get enough food to eat and for very basic medical care), but does seem to act as a disincentive to work.

And it's not like we live in Victorian england with no social supports!  We have a whole medly of different social programs out there.

I used to be more in favour of a UBI, on the idea that we should just take all of the money we use for all social programs - welfare, food banks, housing supports - and just turn it into a UBI.  The idea being that you'd save a lot of money on administration, and you can basically trust people to do what is in their best interests.

Unfortunately after 20 years in criminal justice, I believe a significant number of people would spend the money on drugs and then would have absolutely no other government supports to rely on.


When it comes to housing - I'm of the YIMBY/"build baby build" school.

[Valmy]

UBI has been shown to be a really mixed bag though.  It seems to increase basic health incomes (I mean people are healthier if they get enough food to eat and for very basic medical care), but does seem to act as a disincentive to work.

If people need to be literally starving and on the streets to be incentivized to work well that sucks and doesn't human nature blow?

But I am unwilling to create those conditions just to get people incentivized to work. I would prefer people just be less incentivized to work, employers will just have to make it more appealing. But you just pointed out how other programs designed to help the poor actively incentivize them to NOT work, this seems superior.

And it's not like we live in Victorian england with no social supports!  We have a whole medly of different social programs out there.

I used to be more in favour of a UBI, on the idea that we should just take all of the money we use for all social programs - welfare, food banks, housing supports - and just turn it into a UBI.  The idea being that you'd save a lot of money on administration, and you can basically trust people to do what is in their best interests.

Unfortunately after 20 years in criminal justice, I believe a significant number of people would spend the money on drugs and then would have absolutely no other government supports to rely on.

Yeah we probably couldn't do that, just eliminate everything but UBI due to just the problem you describe. Many people they just are sick with addiction and cannot take care of themselves. They are sick and need treatment.

When it comes to housing - I'm of the YIMBY/"build baby build" school.

Me to. Especially in the era of falling populations. The best way to address homelessness and high home prices? Build homes.

 

[Barrister]

If people need to be literally starving and on the streets to be incentivized to work well that sucks and doesn't human nature blow?

But I am unwilling to create those conditions just to get people incentivized to work. I would prefer people just be less incentivized to work, employers will just have to make it more appealing. But you just pointed out how other programs designed to help the poor actively incentivize them to NOT work, this seems superior.

But that's just how society works, and always has.  If you free people from the need to work, a lot of people - just don't want to work.

My son is 14.  When I was his age I was out slinging newspapers to earn extra money.  Now of course that is no longer a thing kids do, but we were encouraging him to do refereeing.  A friend of his made good money last winter doing it.  Heck again when I was even younger than 14 (I think 12) I was umping little kids baseball games.  His response though?  "Nah - it's boring".  He gets enough money from birthdays and other gifts it's not worth it to him.

Yeah we probably couldn't do that, just eliminate everything but UBI due to just the problem you describe. Many people they just are sick with addiction and cannot take care of themselves. They are sick and need treatment.

Well again my thinking (and I didn't come up with the idea) is that it would be much more politically palatable.  Building a UBI on top of all existing social programs would be hugely, massively expensive and I can't see it being politically feasible (in particular in the US where you can't even agree on universal healthcare).

When it comes to housing - I'm of the YIMBY/"build baby build" school.

Me to. Especially in the era of falling populations. The best way to address homelessness and high home prices? Build homes.

Of course in Canada the population is anything but falling - we grew by 1.3 million (or 3.2%) in 2023, with the number expected to be even higher this year.

But yes - it's simple supply and demand.

[Valmy]

But that's just how society works, and always has.  If you free people from the need to work, a lot of people - just don't want to work.

Yeah I just don't see any way around that. However, in this circumstance at least working would be entirely to their benefit. They wouldn't have to worry about losing some essential social benefit.

Well again my thinking (and I didn't come up with the idea) is that it would be much more politically palatable.  Building a UBI on top of all existing social programs would be hugely, massively expensive and I can't see it being politically feasible (in particular in the US where you can't even agree on universal healthcare).

Yeah, you would be able to get rid of a lot of them but you would have to keep ones in place to treat mental health issues and substance addiction. You can't just give those kinds of people money.

Of course in Canada the population is anything but falling - we grew by 1.3 million (or 3.2%) in 2023, with the number expected to be even higher this year.

But yes - it's simple supply and demand.

I am just saying you don't have to worry about coating the earth in homes because of overpopulation. The current demographic direction of earth is pretty clear even if Canada continues to get immigrants.

But Canada has plenty of space, it is one of the least densely populated countries in the world.

[Barrister]

I am just saying you don't have to worry about coating the earth in homes because of overpopulation. The current demographic direction of earth is pretty clear even if Canada continues to get immigrants.

But Canada has plenty of space, it is one of the least densely populated countries in the world.

OK, understand the first part.

Second part though - it's not like immigrants are moving to Flin Flon, Manitoba.  They're moving to the big cities.

Because the thing is vast swaths of Canada aren't really great places to live.  It's the Precambrian shield.  Continental glaciation scraped all the topsoil away leaving just bare rock, and now whatever trees can grow on top of bare rock.  People have built cities on the shield when there's sufficient incentive to do so (like Flin FLon), but it's usually because of mining.  But it's otherwise really hard to build on bedrock - you can't dig basement, all utilities (even water and sewer) have to be built above ground, etc.

[crazy canuck]

But Canada has plenty of space, it is one of the least densely populated countries in the world.

Wiki tells me that Canada's cities are among the most densely populated in North America.  Toronto is number 1, Greater Vancouver is fourth.  Montreal, Calgary and Winnipeg are in the top 8. Why is that you might ask.  Canada has vast areas of space that are not reasonably habitable.  So while we have plenty of space we need to pack into the areas that are more habitable than not. 

[crazy canuck]

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.

Yep construction costs when crazy in 22/23 but have calmed down now (but still very high). There are also lots of other things that developers now have to worry about that they didn't used to - biodiversity net gain, energy efficiency etc.

Yeah, there was a furor here about the rental cost of the affordable units of a project that recently completed.  The rent was based on the developers cost.  Which was lower than usual because the government had provided low interest loans to the developer.  Sorry folks, but that is just what it costs now. 

[Solmyr]

Rent control is horrible. If you need a place to live in Stockholm you have to buy it or wait decades in line to rent.

And if there was no rent control then things would be great for high earners moving into the city. They'd have little trouble just slapping down their crowns and getting a place.
But for the regular working class locals whose landlord sees all this foreign money on the table and the opportunity to quadruple rents?.... Yeah. They're out on the street.

The enormously inefficient housing market that rent control causes costs society a lot. Your idea that the haves (in this case those who sit on artifically advantageous rent contracts) are much more important to protect than the have nots (those who don't have enough money to buy and don't have decades of queue time) seems unattractive to me.

Finland is an example of a comparative country that reformed the housing market, and the positive effects this brought.

Finland is not a good example of the housing market. If you are okay with living out in the countryside, you can, but prepare to have no job and nothing interesting to do. If you want to live in one of the few bigger cities... good luck.

[Josquius]

Building more housing is pretty obviously the key solution to housing problems.
But this can be over-stated to an extent. There's this big assumption built into the idea that all we have to do is build more houses is that all housing is created equal - abolish the green belt and just build more houses!....then you have these new houses 2 hours drive from the city centre.  It doesn't particularly help the nurse who works at a central clinic even if she can afford one of these new homes (and she is able to outbid to buy to let folk).

I'd say more emphasis needs to be placed on the need to build smarter as well as to just build more.
Don't just find a field on the outskirts of town and build a bunch of horrid modern "Detached as that means the most profits but only 30cm from its neighbour" homes there. There was a recent example of this locally where they didn't even bother to give it pavements, driving (or walking on the road) was literally the only way in or out. Transit isn't thought of at all.

We need to place a lot more emphasis on densifying already developed areas, and on transit to make sure a place 15 miles from the centre is perfectly liveable for someone working (and playing) in the centre rather than a commuting hellscape.

Also quite sad to see such a universal distaste for rent control here.
So 99% of economists say its bad?
As I said, go and ask a bunch of dieticians about pizza and you'll hear quite universally that its terrible...
But when you're talking about having pizza is a nutritious meal really what you're going for?
The economists arguments about rent control being bad aren't even worth arguing with, just accept them as read (despite usually being based in a theoretical reality where landlords are building new housing and all housing is the same...), but they completely miss the point.
The reason politicians support it isn't because they somehow think its going to help house prices. Its because the situation is screwed up and artificial interference is needed to keep the rest of the economy running and stop massive human suffering.
Housing doesn't work like a random commodity. A particular slice of land is unique. You can't just build another version of it.
Social housing is a very very good thing (tm) and we need more of it. Not less. The right to buy and associated act ranks up there in the top crimes of Thatcher.



Anyway. Should we separate out this housing stuff into a different thread?

[garbon]

The economists arguments about rent control being bad aren't even worth arguing with, just accept them as read (despite usually being based in a theoretical reality where landlords are building new housing and all housing is the same...), but they completely miss the point.

I think you miss the point. As I gave in my example, rent control has not made San Francisco a cheap place to live. It just artificially balances the scales toward long term residents as they will benefit the most from the policy - provided they plan to never leave.

When I got to SF, I was making a good salary and could pay my rent on time (though I still needed a parent as a guarantor given how high rents were). My apt was rent controlled so while my salary was going up while I lived there, my rent never did.

Now imagine I'd never left SF and was living in that same flat. I'd still have that same now 'cheap' rent while my earning power has gone up radically. At the same time were I to hypothetically then leave, the next person would be paying current market rate for that same flat.  Why should I be benefiting from those cheap rates when I could have paid the increases over the years?

And it shouldn't be forgotten my cheap rate would have been subsidised by new arrivals in the city needing to pay more for the limited stock caused by people like myself not vacating my cheap rental.

[Josquius]

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"

More "4. But what does this have to do with the question of how I get to the train station?"

The economists arguments about rent control being bad aren't even worth arguing with, just accept them as read (despite usually being based in a theoretical reality where landlords are building new housing and all housing is the same...), but they completely miss the point.

I think you miss the point. As I gave in my example, rent control has not made San Francisco a cheap place to live. It just artificially balances the scales toward long term residents as they will benefit the most from the policy - provided they plan to never leave.

When I got to SF, I was making a good salary and could pay my rent on time (though I still needed a parent as a guarantor given how high rents were). My apt was rent controlled so while my salary was going up while I lived there, my rent never did.

Now imagine I'd never left SF and was living in that same flat. I'd still have that same now 'cheap' rent while my earning power has gone up radically. At the same time were I to hypothetically then leave, the next person would be paying current market rate for that same flat.  Why should I be benefiting from those cheap rates when I could have paid the increases over the years?

And it shouldn't be forgotten my cheap rate would have been subsidised by new arrivals in the city needing to pay more for the limited stock caused by people like myself not vacating my cheap rental.

Sounds like the situation in Switzerland where with two nearly identical flats next to each other one, where the same old fella has been living for decades, can be paying 600 a month whilst the other, which has a new person every year, is on 2000.
The key thing there which seems to be missing in SF is that in Switzerland there are legal limits on how much the rent can be increased by with each new tenant.

And honestly this sounds fine to me. For some people a rental place is just a transient location where they're sleeping for a short spell, for others its their home. Stability is important in this. Especially since a situation of market rates being way out of sync with average earnings should only ever be temporary. Where it emerges action should be taken to fix it without the safety net of rent control becoming the permanent main platform.

My point is not rent control is universally always great and should be the main factor dictating rental prices everywhere and always.
Rather its that rent control isn't the universally bad thing it is presented as and it shouldn't be dismissed as a viable tool to use. As a backup to stop getting things too insane there should certainly be something.
Also a bit besides the point worth mentioning is the Dutch system I've read about where the amount you can charge in rent is directly tied to the condition of the home; seems directly aimed at a weird argument the economists make is that rent control disincentives maintenance (which makes no sense and doesn't line up with reality).

Its not perfect of course. There's the problem of a old guy whose family are gone paying peanuts for a 4 bedroom house much bigger than his needs. A big balance there of the ethics of moving him out vs. the needs of the community.
But nor is it something to be just dismissed 'cos the economists say its bad for business.

[The Brain]

Rent control is horrible. If you need a place to live in Stockholm you have to buy it or wait decades in line to rent.

And if there was no rent control then things would be great for high earners moving into the city. They'd have little trouble just slapping down their crowns and getting a place.
But for the regular working class locals whose landlord sees all this foreign money on the table and the opportunity to quadruple rents?.... Yeah. They're out on the street.

The enormously inefficient housing market that rent control causes costs society a lot. Your idea that the haves (in this case those who sit on artifically advantageous rent contracts) are much more important to protect than the have nots (those who don't have enough money to buy and don't have decades of queue time) seems unattractive to me.

Finland is an example of a comparative country that reformed the housing market, and the positive effects this brought.

Finland is not a good example of the housing market. If you are okay with living out in the countryside, you can, but prepare to have no job and nothing interesting to do. If you want to live in one of the few bigger cities... good luck.

I have read that rental apartments are available in Helsinki "off the shelf". https://www.vuokraovi.com/?locale=en seems to support this, but I might not understand it correctly.