Rent control means the end of new supply from the market. You get new supply from and only from Government funding/projects, and that works as well as any Government-run service. The supply in Holland is inelastic. It simply does not respond to the market, which is to say, to the level of demand.
So you end up with stories like this.
It's even worse in Sweden. In Sweden, last I knew, it's actually illegal for a private person to rent from a private landlord, unless the State gives permission. There's a queue to be given permission, you accumulate points over time, and it takes about two decades to be allowed to rent in central Stockholm.
Hard to imagine a worse fuck-up, and of course being State, it's political, and it's impossible to get rid of.
People think you can legislate things into existance. Rent to high? Just make high rent illegal and problem solved!
Reading it here looks like a joke, but there are huge swaths of people continually prodding legislators to pass laws exactly as knee-jerkishly naive as this.
And that's why the housing situation is so different in other developed countries without rent control, right? Like look at the U.S, most states don't allow any sort of rent control and (check notes) they're uh, hmm, only short 7.2 million homes? Yup, no rent control sure is the fix. Definitely don't need governments stepping and mandating housing. Where has that worked? Singapore? Is that even a real place?
We need more private landlords with the freedom to randomly raise rents by any percentage they want. Surely that's the only way to get enough housing at affordable levels.
The biggest problem with housing the USA is largely local zoning that artificially limits what can be built. Cities that have minimal zoning such as Houston, Texas have rents that have closely followed inflation only. In Houston there is literally no zoning. While this has some bad side effects in terms of ugliness it is highly affordable.
Some progressive US cities, such as Minneapolis and Austin, are now liberalizing zoning to allow much more dense housing to be built in central areas long mass transit.
There are a lot of different well-meaning policies that can fuck up a housing market by restricting supply. Rent control is just one of them.
This is like if you say that privatizing prisons is a bad thing and then somebody else comes along and says "But look at North Korea. They have state-run prisons and the prisoner conditions aren't any better. Clearly, therefore, privatization of prisons doesn't result in any bad outcomes for prisoners." Just a total non-sequitor.
The particular country wasn't the point. I was just illustrating the concept that just because Y exists in a place without X isn't proof that X won't cause Y. But that's kind of abstract, so I came up with an example that I thought would resonate intuitively with the person I was responding to. A framing where, if someone had tried the argument on them, they would immediately see the gaping hole without having to walk them through it. Obviously, I don't know goosedragons personally, so it was just a guess at what sort of example might make a good illustration for them.
Rent control is the antithesis of governments stepping up. It is the equivalent of sweeping the problem under the rug and declaring it solved. Go ahead and fix the problem.
Check out Minneapolis vs St Paul building permits before and after St Paul imposed rent control. Same geographic area with roughly the same demographics.
All else equal, rent control discourages investment in housing.
If the government wants to create more housing supply themselves and charge some capped rental amount, I am cool with that. But please don’t tell private property owners what they can charge.
St Paul’s rent control was incredibly stupid, it’s not even indexed to inflation. The market was flooded with landlords selling duplexes annd anpartment buildings and developers canceled projects. I voted against it, and I’m currently renting.
St Paul had a more affordable rental market than MPLS, too.
Rent controls. NIMBYs. Zoning laws. Builder skills shortage. An excuse around every corner. When can we admit something bigger is at play here? The market is being manipulated on a grand scale. Every government seems to only pay lip service to the issue while creating policies to inflate the assets. Now why is that? Landlords have captured our policy makers. Many MPs in the UK are landlords.
Hailing from a country where the population peaked in the late 90s, housing developers build what they want, where they want and where prices still increased in lockstep with the rest of the world, I can attest to that.
There's no reason an apartment in a 80s commie block in eastern Europe should go for €4k per square metre. You're not getting your money's worth for that.
I feel this pain. Commieblocks were designed to last around 50-70 years, yes they can stand longer but what kind of architectural monument are they? Germans in the east simply demolish them. Meantime in Poland?! "EUR 4k per square meter muthafucka!". This would be absurdly ridiculous, except it's real and I need housing.
1. Peak housing demand doesn't necessarily have to coincide exactly with peak population, because it also depends on average household sizes and living space demand per person.
2. Country-wide population figures don't account for regional population movement.
1. Prices started going up when prospective homebuyers were already a particularly small generation who also had fewer children - they adjusted family size to their living space demand as it's not like they could suddenly afford more spacious housing.
2. The trend for the past 20+ years has been to move out of cities, with the urbanization rate actually decreasing over that period, as urban real estate was never really affordable. Yet, prices, especially in cities, went up.
> When can we admit something bigger is at play here? The market is being manipulated on a grand scale.
What we have is a global asset price inflation issue caused by cheap money. Works well for those with collateral but hits those without hard. All of the other issues - regulation, zoning, building costs, immigration, etc are secondary. Just check any country with this problem and look at the correlation between an expanding money supply and property prices.
I don’t know what you’re referring with regards to Sweden. While we have rent control there’s plenty of private landlords. Each city will usually have an official queue for rentals. But private landlords are not obligated to use it. Larger private landlords often hade their own queue. Smaller ones do whatever they feel like.
He is not totally wrong, it's just private landlords are usually companies, not individuals.
If individuals are renting an apartment, it's almost always limited to two 2 years and needs paperwork with the housing association including a reason for renting instead of selling
Banks also don't give loans to buy property if the stated reason is to rent
Not compared to countries with an actual free rental market.
Having lived in both Norway and Sweden, the difference is stark. Moving to Oslo it took me a couple of phone calls and less than 10 days before I literally had the keys to a rental apartment in the part of Oslo I wanted to live in. Moving to Sweden it took months and I ended up with an 'illegal' second hand contract in a shitty part of Stockholm.
Absolutely true. Rent control is the government trying to "fix" a problem they set up to be unfixable. To be honest I think it is by design, if nobody is willing to buy or build housing the government, by default, gets control over it, so they can do what it what they want.
Of course everyone on this website will hate you for suggesting that price fixing has any effect on supply.
It's not that rent controls dont have any effect, it's just that the effect is not very significant. Rent controls have existed long before the current housing crisis, it's not the cause.
> Rent control means the end of new supply from the market.
Can you explain why you think this? The way I see it, rent control just means that property developers will have to wait a little bit longer before their investments start paying off. They're still making massive amounts of profits, it's just a little bit less.
The benefit of rent controls means that overall people will have more money to spend, which benefits the overall economy. In my opinion it makes perfect sense.
yes indeed if rent controls would limit rent to 10 dollars a month then all landlords will be quickly out of business. but that is obviously not how it works
If you're a property developer building an apartment building you have two choices, either sell the apartments or rent out the apartments. In an ideal free market economy the rental and sales prices for these apartments will be such that the profit from either will be the same and the supply of either type of apartment will be driven by the demand of that market.
However if you cap rental prices and don't cap sales prices, then it will never be more profitable to rent out an apartment compared to selling the same apartment, so property developers will only build apartments to sell rather than to rent. If you want new rental apartments and rent control you have to use some kind of additional carrot and/or stick to compel property developers to pick the less profitable option.
I understand that from a purely economic/free market perspective rent controls are a bad thing.
But for an 'ideal free market' to exist there are some requirements that in the real world don't apply. In an ideal free market consumers are fully informed, logical and able to say no to a bad price.
In the real world, especially when it comes to necessities, consumers often don't meet these requirements. People need housing, they cant sit around waiting for the market to adjust. If you live in an area with children you can't just pack up and leave when a cheaper option becomes available or the landlord decides to increase the price.
In the real world there is a big imbalance in the power between consumers and suppliers when it comes to housing. Paradoxicaly rent controls are a tactic used to empower consumers in an effort to balance the scales, exactly so the real world might approach that 'ideal free market'
The core problem is that if you implement rent control, without a bunch of other policies, all you achieve is to remove potential rental apartments from the market. Either they'll never get built or rental apartments will be sold off and removed from the rental pool once rents drop below a certain relative level compared to the potential sales price for the same apartment (or apartment building).
Rent control is fine, if the government at same time steps up and implements policies to make sure that rentable apartments at the rent controlled price are actually available on the market. Rent control makes no difference to me if the end result is that it is completely impossible for me to rent an apartment at any price.
I've lived in places with and without strict rent control, and the biggest difference was that in the place without rent control I could easily find several places to rent in the parts of the city I wanted to live in.
> It simply does not respond to the market, which is to say, to the level of demand.
> So you end up with stories like this.
You seem very sure that rent control is the cause of the lack of available housing. Can you be so sure when the same type of shortage exists in so many other places without rent control?
I could just as easily argue that short term rentals are to blame.
Nothing makes life harder on yourself than making your parents hate you. It is also extremely hard to do, no your parents disagreeing with you isn't a good reason to never see them again.
IDK if I'm misunderstanding, but it sounds like you think LGBT youth make their parents hate them by being LGBT? In my opinion it's the duty of the parents to foster a proper loving relation with their children.
> no your parents disagreeing with you isn't a good reason to never see them again.
There is nuance to this. Being queer and living with a homophobic family means suppressing your personality in everyday life in myriad ways, way beyond "being gay". Moving out removes this tension entirely, well without any need to abandon one's family altogether.
It is surprisingly easy to do. You clearly come from stable families, but parents can hate their children for a lot of things: being different (everything from sexual orientation to not being social), being not like them, being exactly like them, not getting the grades they hoped for, not babysitting your 5 siblings because you had to go to school, not bringing in money, costing them too much money by existing, not being a doctor in a family of doctors....
More often, it's not the children who don't want to see their parents, its the other way around.
Works if your parents live in areas where employment is abundant. Otherwise you'll waste years of your life lowering your lifetime earning potential. I have personal experience with this. In my first job, I had to move to a VVHCOL area and my salary couldn't cover my monthly expenses, even after I shared a room with a stranger. Eventually however, that opportunity opened up better paying jobs. My friends who stayed behind, unfortunately did not see such opportunities and the outcome 10 years down the road is very different. Obviously there's a lot more to long term success, but proximity to jobs is one of them.
So who lives in all these sweet Dutch houses with doors painted in green, prostitues? Maybe paying a prostitute per hour will be chaper than regular monthly rent in Amsterdam.
The economists mistaken one plus with minus in their models, and so the wealth is being vaccumed up instead of trickling down. Either way it boils down to these students not waking up early enough, not working hard enough, and picking wrong parents.
This needs much more emphasis. Essentially we have a system where those with assets have access to cheap money and use it to gain control of more assets. This is the dark side of capitalism that has nothing to do with productivity. It's entrenching a socially divisive system of rentier capitalism.
It's also partly why I enjoy reading hacker news. A lot of people committed to generating income from doing rather than owning.
I knew several people in Sweden who did this 10+ years ago. They'd finished their degree and in many cases even gotten a job, but still stayed enrolled in one or two courses just so they could keep their student apartment.
51 comments
[ 3.8 ms ] story [ 131 ms ] threadRent control means the end of new supply from the market. You get new supply from and only from Government funding/projects, and that works as well as any Government-run service. The supply in Holland is inelastic. It simply does not respond to the market, which is to say, to the level of demand.
So you end up with stories like this.
It's even worse in Sweden. In Sweden, last I knew, it's actually illegal for a private person to rent from a private landlord, unless the State gives permission. There's a queue to be given permission, you accumulate points over time, and it takes about two decades to be allowed to rent in central Stockholm.
Hard to imagine a worse fuck-up, and of course being State, it's political, and it's impossible to get rid of.
Reading it here looks like a joke, but there are huge swaths of people continually prodding legislators to pass laws exactly as knee-jerkishly naive as this.
The _only_ solution to high rent is to build more housing.
https://dutchreview.com/expat/housing/why-is-there-a-housing...
We need more private landlords with the freedom to randomly raise rents by any percentage they want. Surely that's the only way to get enough housing at affordable levels.
This is like if you say that privatizing prisons is a bad thing and then somebody else comes along and says "But look at North Korea. They have state-run prisons and the prisoner conditions aren't any better. Clearly, therefore, privatization of prisons doesn't result in any bad outcomes for prisoners." Just a total non-sequitor.
All else equal, rent control discourages investment in housing.
If the government wants to create more housing supply themselves and charge some capped rental amount, I am cool with that. But please don’t tell private property owners what they can charge.
St Paul had a more affordable rental market than MPLS, too.
We're screwed
There's no reason an apartment in a 80s commie block in eastern Europe should go for €4k per square metre. You're not getting your money's worth for that.
1. Peak housing demand doesn't necessarily have to coincide exactly with peak population, because it also depends on average household sizes and living space demand per person. 2. Country-wide population figures don't account for regional population movement.
2. The trend for the past 20+ years has been to move out of cities, with the urbanization rate actually decreasing over that period, as urban real estate was never really affordable. Yet, prices, especially in cities, went up.
What we have is a global asset price inflation issue caused by cheap money. Works well for those with collateral but hits those without hard. All of the other issues - regulation, zoning, building costs, immigration, etc are secondary. Just check any country with this problem and look at the correlation between an expanding money supply and property prices.
If individuals are renting an apartment, it's almost always limited to two 2 years and needs paperwork with the housing association including a reason for renting instead of selling
Banks also don't give loans to buy property if the stated reason is to rent
Not compared to countries with an actual free rental market.
Having lived in both Norway and Sweden, the difference is stark. Moving to Oslo it took me a couple of phone calls and less than 10 days before I literally had the keys to a rental apartment in the part of Oslo I wanted to live in. Moving to Sweden it took months and I ended up with an 'illegal' second hand contract in a shitty part of Stockholm.
Of course everyone on this website will hate you for suggesting that price fixing has any effect on supply.
Can you explain why you think this? The way I see it, rent control just means that property developers will have to wait a little bit longer before their investments start paying off. They're still making massive amounts of profits, it's just a little bit less.
The benefit of rent controls means that overall people will have more money to spend, which benefits the overall economy. In my opinion it makes perfect sense.
In this case, there will be zero property owners who will offer their place for rent, leading to zero places available to rent.
However if you cap rental prices and don't cap sales prices, then it will never be more profitable to rent out an apartment compared to selling the same apartment, so property developers will only build apartments to sell rather than to rent. If you want new rental apartments and rent control you have to use some kind of additional carrot and/or stick to compel property developers to pick the less profitable option.
But for an 'ideal free market' to exist there are some requirements that in the real world don't apply. In an ideal free market consumers are fully informed, logical and able to say no to a bad price.
In the real world, especially when it comes to necessities, consumers often don't meet these requirements. People need housing, they cant sit around waiting for the market to adjust. If you live in an area with children you can't just pack up and leave when a cheaper option becomes available or the landlord decides to increase the price.
In the real world there is a big imbalance in the power between consumers and suppliers when it comes to housing. Paradoxicaly rent controls are a tactic used to empower consumers in an effort to balance the scales, exactly so the real world might approach that 'ideal free market'
Rent control is fine, if the government at same time steps up and implements policies to make sure that rentable apartments at the rent controlled price are actually available on the market. Rent control makes no difference to me if the end result is that it is completely impossible for me to rent an apartment at any price.
I've lived in places with and without strict rent control, and the biggest difference was that in the place without rent control I could easily find several places to rent in the parts of the city I wanted to live in.
> So you end up with stories like this.
You seem very sure that rent control is the cause of the lack of available housing. Can you be so sure when the same type of shortage exists in so many other places without rent control?
I could just as easily argue that short term rentals are to blame.
IDK if I'm misunderstanding, but it sounds like you think LGBT youth make their parents hate them by being LGBT? In my opinion it's the duty of the parents to foster a proper loving relation with their children.
> no your parents disagreeing with you isn't a good reason to never see them again.
I think that depends on what you disagree about.
It is surprisingly easy to do. You clearly come from stable families, but parents can hate their children for a lot of things: being different (everything from sexual orientation to not being social), being not like them, being exactly like them, not getting the grades they hoped for, not babysitting your 5 siblings because you had to go to school, not bringing in money, costing them too much money by existing, not being a doctor in a family of doctors....
More often, it's not the children who don't want to see their parents, its the other way around.
Instead articles focus on individual countries and lay the blame on their particular circumstances and policies, not the bigger picture.
It's also partly why I enjoy reading hacker news. A lot of people committed to generating income from doing rather than owning.