I think most people doubt supply and demand to some degree. How often have you seen someone argue we should secure the supply of food to disaster zones by repealing price gouging laws? Rent control is popular because many people believe, wrongly but wholeheartedly, that landlords are just price gougers and everyone could get cheap adequate housing if they weren’t manipulating it.
My opinion is that rent control is much less about actually controlling rent, and more about controlling who is allowed to be in the city and where. Most rent control systems I’ve seen strongly favor those who have been in their current apartment for a long time, as moving often resets the rents back to market rate. And while that does help avoid evicting long time (and old) tenants, it also has the effect of forcing everyone on rent control to stay where they are.
I mentally couple the way that rent control works with the pretty common opinion that the city was great until “they” came, and would be excellent again if they’d just leave. While the “they” changes from place to place and time to time, the attitude seems to be pretty common. You even see this attitude here on HN, with occasional assertions that those who moved there for tech jobs should move and let rents fall for those who have always been there.
That concern, though, is something I've grown much more sympathetic to. There's a fundamental unfairness in putting in work to make your local community great, making it so good that rich people want to live there, and then being told that the community no longer has room for you because the rent is too high. If the city won't allow enough housing to keep your area affordable, you have a right to feel aggrieved, and it's understandable that you might misdirect the grievance if you have no lived experience of a city successfully expanding the housing supply.
People overestimate their impact on the community. The elephant here is that those people contributed very little to making the place desirable.
You can usually tell. They'll say that the culture has changed because the desirable people left. That's right. But the groupies are still there. They just don't know where the desirable people went.
> If the city won't allow enough housing to keep your area affordable, you have a right to feel aggrieved
The city is not the one preventing more development. It's overwhelmingly these xenophobic residents that are responsible for that. I don't have much sympathy for people aggrieved by shooting themselves in the foot.
>There's a fundamental unfairness in putting in work to make your local community great, making it so good that rich people want to live there,
Actually that is a the result of an incredibly skewed tax policy. Prop 13 means that the government cannot derive any significant tax income from residential property. It is forced to allow commercial property because it brings in tax money. This means you will always have more commercial property than residential property. Land owners want this because it raises their property values. The government wants this because it's the only way to fund itself.
When you look at the reality of what you are doing you are actually incredibly selfish. You are creating jobs and moving them away from rural places but at the same time you are not building enough housing so that people can live near those jobs. You do this because you want the value of your property to go up. Then once those people are coming because you moved all the jobs to your city you start complaining because they want to work there.
There is this misconception that it's "rich people" who want to live there when the reality is that those people only became rich after they arrived in your city. It's you who created them.
>, and then being told that the community no longer has room for you because the rent is too high.
Well, that's exactly what you wanted. You wanted more jobs meaning more people but you did not want more housing which means someone has to go. If you call this unfair then you have no one to blame other yourself.
Now that you can get a high-paying job with the same company without moving from a different region of the US (because of COVID), I expect the SF housing market to collapse. Why move to a shoebox apartment and pay SF cost of living rates when you can have a nice, big property elsewhere?
What's interesting and something I've witnessed first hand in NYC, that the tenants of rent controlled apartments will setup a black market for their rent controlled apartment in collusion with their landlord. So if they do move they will attempt to sell for the privilege of renting the unit, at the time this could range as high as $50k, the landlord and previous tenant would split this 'fee'. What's incredible is that for the right apartment in the right part of NYC amortized over a few years, this was a great deal for the new tenant.
Rent control is popular with renters because the rent is too damn high. You can figure that one out without assigning motives to people you've never met.
I don’t know why you’re assuming bad faith here. I’ve met rent control advocates, talked to them, and read their detailed explanations of why they think there should be rent control. They often believe exactly what I said, and always have some principled explanation for why it’s not fair that the rent is high; despite that one guy in New York, I’ve never actually met anyone who argues for rent control on the grounds of pure self-interest.
The supply and demand based solution to price gouging is to make the government guarantee access to the good at the desired price.
Price gouging laws themselves don't solve the problem.
If anything, the government can pretend that the problem has been solved and block any potential resolution. They can make the problem far worse.
I'll say it over and over again. If you want to fix the economics then you must fix physical reality.
Why does the government guarantee work? Because it will be the government's responsibility to fix the problem. If the government created laws that caused the problem then it will be forced to change those laws.
The classic price gouging example is the mask shortage where people will constantly say that manufacturers can't expand their supply fast enough so price gouging is inevitable and the duct tape fix is the only way to solve the problem. If you introduce a government price guarantee the government will be forced to buy existing masks off the private market and sell them for a lower price. Effectively subsidizing the manufacturers of the mask. The manufacturer can charge an increasing amount of money for the masks until it becomes profitable to expand production capacity immediately. What if greedy manufacturers gouge the government? The obligation to provide masks doesn't disappear because of a little greed. In fact, the government can just buy the manufacturers and build its own factories and completely remove the need for uncompetitive mask manufacturers. If anything, there is now immense pressure for private industry to stay relevant by offering prices lower than what the government is guaranteeing.
