Housing policy megathread

[Sheilbh]

The idea that rent control is bad and leads to a housting shortage is just unfounded in the real world.
In a perfect green field model then you can do some simple maths and show how it goes counter to the rules of acquisition thus is bad for business thus is bad for society.

It is literally the observed reality of every single city in the world with rent control

[Razgovory]

Theyre sold.

Ah, okay.  So are private interests building them?  Or is the  government selling them?

[Josquius]

It is literally the observed reality of every single city in the world with rent control

It's really not
Though yes. Many do love using it as a scapegoat. Not bothering to get their cause and effect the right way around.

So in other words you agree with me.
The idea that rent control is bad and leads to a housting shortage is just unfounded in the real world.
In a perfect green field model then you can do some simple maths and show how it goes counter to the rules of acquisition thus is bad for business thus is bad for society.
In reality.... There's so many much more important factors at work that any impact rent control might have on the building of rental accommodation is not even noise.

I've tried to be very clear about the things you have said that I disagreed with.

I said that rent control tends to reduce for profit contstruction.  You have represented that assertion as several different strawmen without adressing the actual argument.  I can't figure out if you simply don't understand what I'm saying or you're just trying to run a con.

I clearly showed that liberalisation doesn't lead to a lot of construction. That under tight rents regulation there are many instances past and present of the private sector being out built.
This clearly demonstrates that the idea rent control reduces rental construction looks very dodgy indeed.
That it is, shockingly, not building enough housing to keep pace with growth, that is the key factor in broken housing markets and not desperate efforts to salve the pain of this situation.

Yes, I can imagine cases in which rent control would have no impact on private sector construction.  The rent cap could be set at a billion dollars a month and that would not deter construction.  One could set a rent ceiling at the North Pole and that would not deter construction because there is no demand to begin with. 

None of those cases refute my assertion.

Again explain the UK where without rent control private builders are failing to build despite the huge demand, being outbuilt even by the crippled social sector.

Alternatively government could construct billions of units of high quality, subsidized, cheap housing and rent control on private housing would not deter construction because all the demand would have already been soaked up.

A situation where rent controlled housing is built in numbers to more than meet demand doesn't refute that rent control reduces house building?.... Err....

[HVC]

The idea that rent control is bad and leads to a housting shortage is just unfounded in the real world.
In a perfect green field model then you can do some simple maths and show how it goes counter to the rules of acquisition thus is bad for business thus is bad for society.

It is literally the observed reality of every single city in the world with rent control

Your first mistake is assuming that reality changes peoples mind

[HVC]

The main issue is that Josq is conflating (purposefully or erroneously) rent control and social housing/government builds. The two sides well never come to an understanding because they're arguing about two different things.

[Admiral Yi]

I clearly showed that liberalisation doesn't lead to a lot of construction.

You've provided one data point, London, where uncapped rents do not lead to a lot of construction.  Based on the discussion I've seen here it seems the principle constraint is the artificial space restriction imposed by the green belt.  I'm sure Shelf will be more than happy to chime in about planning and zoning and NIMBY.

That under tight rents regulation there are many instances past and present of the private sector being out built.
This clearly demonstrates that the idea rent control reduces rental construction looks very dodgy indeed.

I've made a good faith effort to explain to you why this does not demonstrate what you claim at all.  Clearly I've failed.  Perhaps a different approach would work better.  Perhaps you can explain why "there are many instances past and present of the private sector being out built [which] clearly demonstrates that the idea rent control reduces rental construction looks very dodgy indeed."

[Josquius]

I clearly showed that liberalisation doesn't lead to a lot of construction.

You've provided one data point, London, where uncapped rents do not lead to a lot of construction.  Based on the discussion I've seen here it seems the principle constraint is the artificial space restriction imposed by the green belt.  I'm sure Shelf will be more than happy to chime in about planning and zoning and NIMBY.

I speak of London as the UK market is where I am most familiar with.
Pretty sure they've got a similar situation in Ireland and the low countries (the Dutch rent control introduction being very recent and into a messed up market)

Anyway. Yes. These are indeed much bigger factors in London than the fact there's a smallish amount of rent controlled housing. It seems unlikely that if we change nothing else that more rent control regulations would do much to suppress building.
Demand is just insanely high and the current setup of leaving it to the market is just causing ever more suffering whilst doing nothing about the demand

I've made a good faith effort to explain to you why this does not demonstrate what you claim at all.  Clearly I've failed.  Perhaps a different approach would work better.  Perhaps you can explain why "there are many instances past and present of the private sector being out built [which] clearly demonstrates that the idea rent control reduces rental construction looks very dodgy indeed."

If you say all mammals are dogs and I show you a cat then clearly all mammals are not dogs.

Claiming that rent control reduces building when you've examples of markets that were building well when heavily planned only to stop doing so as controls were reduced, and instances in the world today in very liberal countries where very limited social providers are beating the private market... This doesn't add up.

The main issue is that Josq is conflating (purposefully or erroneously) rent control and social housing/government builds. The two sides well never come to an understanding because they're arguing about two different things.

They're not the same thing. But social housing is a (dominant) form of rent controlled housing.
Discounting it from the equation is just stacking the decks and creating an artificial picture that can't really be analysed at all.

[Sheilbh]

You've provided one data point, London, where uncapped rents do not lead to a lot of construction.

This isn't entirely true - he says living between two massive regeneration projects and having spent the afternoon shopping in a Chinese supermarket in another.


It isn't enough as population and demand have grown more. But London's about 1/6 of the English population and it has about 1/6 of the new builds.

Edit: Although I should note that one of those regeneration projects is almost finished, one is under construction. The one I live near was first developed in 2017 with the first round of consultations finishing in 2019. I believe they're planning to launch a second round of consultations either last year or this year which will then lead to eventual designs and plans. That may also indicate part of the problem with supply.

Based on the discussion I've seen here it seems the principle constraint is the artificial space restriction imposed by the green belt.  I'm sure Shelf will be more than happy to chime in about planning and zoning and NIMBY.

The green belt is overstated I think, though important for cities and symbolically. I think it's broader supply side issues that the planning system is expensive and can be unpredictable which is a huge constraint.

It's, I suspect, why we have such a small build to let sector - as well as building being concentrated in the hands of major developers (who can bear the costs and risk of the planning system) or the inability of prefab companies to work in the UK (as they need a predictable, steady pipeline for their business model to work).

[Admiral Yi]

If you say all mammals are dogs and I show you a cat then clearly all mammals are not dogs.

In Canada Canadian bacon is called back bacon.

Claiming that rent control reduces building when you've examples of markets that were building well when heavily planned only to stop doing so as controls were reduced,

I don't understand how the amount of contructin under heavy planning and reduced controls (whatever that might mean) tells us anything about the effect of rent controls.

and instances in the world today in very liberal countries where very limited social providers are beating the private market... This doesn't add up.

By my count that's the third repetition of the same talking point.

[Norgy]

The main issue is that Josq is conflating (purposefully or erroneously) rent control and social housing/government builds. The two sides well never come to an understanding because they're arguing about two different things.

This is basically true.
There is the slight problem that government, local or central, does not build much except hospitals, elder care or schools.
Social housing is never a net gain. Well, almost never, at least. But as a moral principle, that everyone should have a roof over their head, it is a good one.

In recent years, I discovered that some rental flats in Oslo's best west end had rent contracts, fixed rates, from 1960 to 2020. A sixty year lease, no clauses about index regulation. So some people had a rent of 60-75 Euro a month for 60 years. Of course, there was no clause that said that the renting party could not sublet.

[Gups]

Again explain the UK where without rent control private builders are failing to build despite the huge demand, being outbuilt even by the crippled social sector.

So much wrong with the post as a whole but I don't have time or inclination so I'll just pick up on this point as an example of your extraordinary ignorance of the subject.

https://www.statista.com/statistics/959937/england-new-dwellings-started/

About 75% of new homes in the UK are built by the private sector. About 1% are built by the state. The rest are by Registered social landlords (housing associations).

[Josquius]

Again explain the UK where without rent control private builders are failing to build despite the huge demand, being outbuilt even by the crippled social sector.

So much wrong with the post as a whole but I don't have time or inclination so I'll just pick up on this point as an example of your extraordinary ignorance of the subject.

https://www.statista.com/statistics/959937/england-new-dwellings-started/

About 75% of new homes in the UK are built by the private sector. About 1% are built by the state. The rest are by Registered social landlords (housing associations).

Doing your usual thing of not even bothering to understand what you're replying to here I see. 
So much wrong with this post. You're literally throwing numbers at me that are the other side of those I gave and then you smugly claim I'm ignorant.

It doesn't matter what percentage of housing is built by the private sector. The fact is it isn't meeting our demands. And if you paid just a little attention you'd see we were talking about rental housing.
Also you don't think there might be reasons behind social house building being so low? Didn't I post a graph earlier in the thread showing the drop off in these numbers?
And do you really think this small percent of social housing being built is the reason the private sector isn't meeting our demands?

It isn't enough as population and demand have grown more. But London's about 1/6 of the English population and it has about 1/6 of the new builds.

Edit: Although I should note that one of those regeneration projects is almost finished, one is under construction. The one I live near was first developed in 2017 with the first round of consultations finishing in 2019. I believe they're planning to launch a second round of consultations either last year or this year which will then lead to eventual designs and plans. That may also indicate part of the problem with supply.

These aren't particularly useful numbers though.
A key one missing is what fraction of current British housing does London have and what is its growth rate.
If London has 1/6 of the population but only 1/10 of the housing... that's bad.
If its building housing for 50k extra people a year but is growing by 70k.... things are only ever going to get worse. Imagined numbers here but the reality will resemble this.

In Canada Canadian bacon is called back bacon.

These terms are unfamiliar to me.
Googling they both seem to be just bacon.
Are you saying in your world cats are dogs? (just to tie back to my analogy, of course American English is just as valid).

I don't understand how the amount of contructin under heavy planning and reduced controls (whatever that might mean) tells us anything about the effect of rent controls.

If building is high and then controls are reduced and building drops....
As said, correlation is not causation, but this is a relationship more in line with the complete opposite of your claim.

By my count that's the third repetition of the same talking point.

And it still disproves your point and you still haven't came up with an explanation as to why.

[garbon]

Well this has all been terribly unedifying. Glad it got its own thread.

[Admiral Yi]

These terms are unfamiliar to me.
Googling they both seem to be just bacon.
Are you saying in your world cats are dogs? (just to tie back to my analogy, of course American English is just as valid)

I am not saying that in my world cats are dogs.

If building is high and then controls are reduced and building drops....
As said, correlation is not causation, but this is a relationship more in line with the complete opposite of your claim.

I still don't know what you mean by controls and heavy planning.

And it still disproves your point and you still haven't came up with an explanation as to why.

I came up with an explanation how it does not disprove my point a page ago.

I will make an attempt to explain to you why this is a reply to anything.

Private for profit housing is sensitive to rental prices because it determines their profit or loss.  Capping rental prices will tend to decrease new housing construction because they diminish the stream of revenue that funds the construction and creates profit.

Profit does not determine the amount of social housing constructed.  Tax revenue is raised, housing is built through a political process, not a business decision.  So the amount built has no relevance to the question of whether rent ceilings affect housing construction.

[Josquius]

I am not saying that in my world cats are dogs.

I don't understand your meaning at all then,

I still don't know what you mean by controls and heavy planning.

Looking at the Swedish example again for instance, the state used to be very involved in house building, vast amounts of social housing was built, in the 90s the market was heavily liberalised.
You're really going to claim to be unfamiliar with the concept of central planning?

I came up with an explanation how it does not disprove my point a page ago.

I will make an attempt to explain to you why this is a reply to anything.

Private for profit housing is sensitive to rental prices because it determines their profit or loss.  Capping rental prices will tend to decrease new housing construction because they diminish the stream of revenue that funds the construction and creates profit.

Profit does not determine the amount of social housing constructed.  Tax revenue is raised, housing is built through a political process, not a business decision.  So the amount built has no relevance to the question of whether rent ceilings affect housing construction.

And as I explained
Profit is not the only factor in [social] housing.
Also considerations are where opportunities to build exist and where the most good can be done.
Though politics play a role you'd be surprised how much it does resemble a regular "business decision" as a private company might make- also let's not neglect politics plays a role in pure for profit developers work too. And agreed. The amount of housing built has no relevance to the question of whether rents are regulated.
As much as liberals love to act all smug and kick the idea of rent control, in doing so they show a fundamental disconnect with reality.

If profit isn't your main motive then how on earth does reduced rental income decrease your incentive to build?
Why, when there are no restrictions on the rent you can charge, isn't there a glut of rental building from the private sector?