Rent Controls

Author: Trent0405
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#1
Trent0405
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Bernie has pushed for rent controls, what are your thoughts?

I am against rent controls, and so are economists. 81% of economists say that rent controls failed to provide cheap and high quality housing in New York and San Francisco, while only 2 percent of economists said otherwise.
Moreover, several studies are against rent controls...



 I want to see what others have to say.
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@Trent0405
I think if you rent a house, you should be on a path towards owning your own house.
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While I dong agree with Bernie on things, he gets people talking talking about sit that no one else talks about
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As this affects me personally, I do have thoughts. I still own my first house located in Silicon Valley, CA, purchased in 1979 for 69,000. Due to a sudden windfall I acquired ten years later, a paid off the mortgage, then moved from the house to take a transfer to CO with the windfall company, and rented the house. I am still renting the house to the same people, who never wanted to buy it. They should have. The house is now worth $1.2M and is currently rented at $5K, clear [a little more to pay the same rental management company with which I began]. I also now own another rental, and the rental and management fee are more than sufficient to pay the mortgage. Plus I own the home I reside in, mortgage-free. Given the market of my first rental, and the home value, the rent I currently charge is equitable. I'm not interested in that changing.
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The primarily idea used against the concept of rent control is the theory of supply and demand, and so it comes as no surprise that economists (above all other groups)—and as true proponents of the over-simplistic supply and demand mantra—would be all out against the idea of rent control.
Many of them see economic theories and models as true representations of reality, and this results in an inflated view of their understanding and a belief that questions can be addressed through use of that theory alone. 
I would argue that this simplistic framing of rent control by people like economists, policy makers, etc....prevents them from seeing the many other variables.

Of course that’s not to mention the many options available within a spectrum of rent control policies. I could agree that certain control policies may be too extreme or inadequate in attaining the goals the policy strives for (or may even have an opposite effect), but it would be disingenuous to make the claim that no such policy systems could work. 

There is also the issue of the rent-control policy fitting the environment in which it exists. Variables will differ from one place to the next. Applying a blanket policy to all regions, cities, etc... would also be over simplistic. 


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@Marko

You must know that I rely a lot on the opinion of economists because I am not formally educated in economics. Personally I do not feel like I have the authority or ability to contest the opinion of people who dedicate years of their lives to understanding the complex world of economics. I ultimately have trust in their ability to find truth, even if economists can be wrong, they are far better than my own theories or ideas. If I am to form an opinion about an economic policy, I will only trust established economists who know their stuff, even if their models are flimsy(which I am still unsure of) as you suggested they are the best source of info we have. You point the problems of trusting economists, but what is the alternative? Whilst I acknowledge my approach may seem a little primitive and narrow-minded, it is ultimately the best one in my eyes, because all other approaches seem to be much worse than my own. 
Also, I'm sure that under some specific circumstances a rent control policy could work, but I really don’t think any economist would disagree with that.
In short, whilst your grievances may be valid, I am still not confident enough to disagree with the economists’ consensus on rent controls. 

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I should have maybe asked you this before, but why would the field of economics be an area of expertise with regards to city demographics and planning? Urban design policy is a multidisciplinary process. It starts with the identification of certain urban needs and leads to the design of solutions to meet stated goals. Political and governmental committees and groups oversee the process. 
Most economists would be equally wise to adopt your more tentative position on a topic they are probably quite unfamiliar with, instead of entering like a bull in a China shop with their questionable ‘theories’ and models. 

The problem with economics is that they use the simplistic world of economics to understand the complex world of human behaviour and society. The result of this is their inability to forecast....along with, in the field of macroeconomics, polar opposite views are held between different factions. And, given the scientific method isn’t their modus operandi, this inability to predict is hardly surprising. Note that I’m not suggesting economists are useless but just that their position on certain issues should be taken with a gain of salt. 
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Trent0405: You point the problems of trusting economists, but what is the alternative? 
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Urban design and planning have been around much longer than economists have. 
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@Marko
I should have maybe asked you this before, but why would the field of economics be an area of expertise with regards to city demographics and planning?

When we look at the renting of property we are ultimately looking at production, consumption, and the transfer of money, I assume you would agree to this. In continuation, a rent control would directly impact all three of these these things. Furthermore, this is what economists look at for a living, this would suggest that an economist is the best person to look to when searching for an answer to whether rent controls work or not.

The problem with economics is that they use the simplistic world of economics to understand the complex of world of human behaviour and society.

I don't really think this is true, economists can’t afford to be simplistic and facile. Moreover,  the reason why it may appear that economists might struggle to “understand the complex world of human behaviour and society” is merely because the world of economics is so difficult. It is ultimately impossibly difficult for an economist to isolate for a specific variable perfectly(like rent control). So, some of their work may seem overly simple and blunt, but I tend to think otherwise for the reasons above.


Urban design and planning has been around much longer than economists have. 

I don't really think that this matters, being around longer doesn't mean they are more equipped to answer the question of whether rent control works or not.

Also, you pointing to urban planners as a valid authority would suggest that they agree with rent controls, are there any surveys of urban planners on rent control? This point about urban planners would require some evidence to suggest that urban planners support rent control, I looked online and all I found was individual urban planners that either supported or hated rent controls, not a broad survey(which would be required IMO).

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Trent0405: When we look at the renting of property we are ultimately looking at production, consumption, and the transfer of money, I assume you would agree to this. In continuation, a rent control would directly impact all three of these these things. Furthermore, this is what economists look at for a living, this would suggest that an economist is the best person to look to when searching for an answer to whether rent controls work or not.
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You’ve perfectly exemplified why I think economists are ill suited to advising us on the issue. I agree that economists are well equipped to deal with topics related to production, consumption and the transfer of money, that said, the service of providing a place to live for a population of a city or country in exchange of a regular fee, cannot be adequately analysed by merely using those metrics. There are so many more important factors that need to be considered. 

When considering something multi-dimensional like the service of renting property, one ought to also be concerned with the wellbeing of people that use that service, and the larger urban environment as a whole. 
In the greater scheme of things, urban planning is a technical and political endeavour that plans and designs environments and spaces (including water supply, communication and transportation infrastructure, etc....). Their primary concern is public welfare—and so they must consider a wide array of issues including sustainability, existing and potential pollution, transport including potential congestion, crime, land values, economic development, social equity, zoning codes, and other legislation, etc.....not discounting other more political endeavours and goals. 
The simplistic and often fallacious theory of supply and demand along with an analysis of ‘production, consumption and the transfer of money’ are simply insufficient variables to help us answer the question whether rental controls are beneficial to the society as a whole. 

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Trent0405: I don't really think this is true, economists can’t afford to be simplistic and facile. Moreover,  the reason why it may appear that economists might struggle to “understand the complex world of human behaviour and society” is merely because the world of economics is so difficult.
It is ultimately impossibly difficult for an economist to isolate for a specific variable perfectly(like rent control). So, some of their work may seem overly simple and blunt, but I tend to think otherwise for the reasons above.
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You’ve shown us they can be over simplistic. Your first link demonstrated to us how they use the theory of supply and demand to explain trends in the rental market. Additionally, and as I alluded to above, they can afford to be ‘simplistic and facile’ specifically because their metrics are minimally concerned or adapted to consider the public welfare as a whole.  Economics is not a difficult field. It is a field that studies a very complex system with insufficiently complex tools to make any good predictions.
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Trent0405: don't really think that this matters, being around longer doesn't mean they are more equipped to answer the question of whether rent control works or not.

Also, you pointing to urban planners as a valid authority would suggest that they agree with rent controls, are there any surveys of urban planners on rent control? This point about urban planners would require some evidence to suggest that urban planners support rent control, I looked online and all I found was individual urban planners that either supported or hated rent controls, not a broad survey(which would be required IMO).
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What it tells us is, that, given that this is significantly more than just a case of ‘production, consumption and transfer of money’, economists are ill equipped to answer whether rent control works or not. 

I never claimed to be for or against rent controls. I’ve merely questioned you on why a survey, conducted on a selected group of economists (which is itself problematic, as we have no idea what the selection process was), is a good strategy to help us answer the question of whether we ought to apply rent controls or not.

PS....I have a conflict of interest seeing i am a landlord myself.



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@Marko
You’ve perfectly exemplified why I think economists are ill suited to advising us on the issue. I agree that economists are well equipped to deal with topics related to production, consumption and the transfer of money, that said, the service of providing a place to live for a population of a city or country in exchange of a regular fee, cannot be adequately analysed by merely using those metrics. There are so many more important factors that need to be considered. 

When considering something multi-dimensional like the service of renting property, one ought to also be concerned with the wellbeing of people that use that service, and the larger urban environment as a whole. 
In the greater scheme of things, urban planning is a technical and political endeavour that plans and designs environments and spaces (including water supply, communication and transportation infrastructure, etc....). Their primary concern is public welfare—and so they must consider a wide array of issues including sustainability, existing and potential pollution, transport including potential congestion, crime, land values, economic development, social equity, zoning codes, and other legislation, etc.....not discounting other more political endeavours and goals. 
The simplistic and often fallacious theory of supply and demand along with an analysis of ‘production, consumption and the transfer of money’ are simply insufficient variables to help us answer the question whether rental controls are beneficial to the society as a whole. 

A massive concern of an economist is also public welfare, an economist will never support a policy if it is a net negative on society as a whole. 

 including sustainability, existing and potential pollution, transport including potential congestion, crime, land values, economic development, social equity, zoning codes,

I saw you point to sustainability, but again, economists do care about sustainability. They always want resources to be available and abundant(which explains why they support a carbon tax)
You also pointed to social equity, but economists want to make sure some measures are put in place to make people more equal. For instance, people like George J. Borjas are for immigration, but only if re-distributive policies are put into place to help everyone benefit from immigration. But, if these policies aren’t in place(which they aren’t today in his mind), then he is very skeptical of immigration. This is an example of an economist who doesn’t want the gains to be so lopsided, he deeply cares about equality, as do practically all economists. 
You pointed to crime, and again, economists care about crime, they actually study crime extensively(even if gathering info and coming to conclusions is very difficult for them). An economist will not act as if their proposals will not impact crime, many economists like John Lott(not really a fan of him) look deeply into both crime and economics.
You point to transportation(I’m assuming you're referring to public transportation), but economists care about public transport as well. They care about the impacts of public transportation on society, and notice how they observe factors like health, biodiversity, water quality, and even things like noise.
Economists, like urban planners, look deeply into practically all policies and the totality of their impacts.

You’ve shown us they can be over simplistic. Your first link demonstrated to us how they use the theory of supply and demand to explain trends in the rental market. Additionally, and as I alluded to above, they can afford to be ‘simplistic and facile’ specifically because their metrics are minimally concerned or adapted to consider the public welfare as a whole.  Economics is not a difficult field. It is a field that studies a very complex system with insufficiently complex tools to make any good predictions.

My first link does not show that, it merely shows that economists are against rent control, not the way they came to their conclusions. Actually you can see the notes of the economists and the reason they voted one way or another. You will see a wide variety of reasons for their decisions which highlights the wonderful beauty of economics, and the brilliance of the people who study economics. 
Also, if “economics is not a difficult field” then why is there so much disagreement amongst economists. Economists have the same facts and can come to completely different conclusions. In fields that are more objective like math, there is more(albeit very little) agreement. There are very little established truths in economics unlike many other fields, if they used very simple tools to come to their conclusions then you would anticipate more homogeneity. If economics is simple why is there so much research done on it, and why is there so much less research done on urban planning if it’s so much more complicated?

I know I've thrown a good amount of links at you, but my young age and my lacklustre understanding of economics and urban planning basically force me to do so.
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Trent0405: A massive concern of an economist is also public welfare, an economist will never support a policy if it is a net negative on society as a whole. 
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I don’t think the term ‘massive concern of an economist’ is supported by the link you just provided. If anything, the link supports my position that, because economists are traditionally focussed on a relatively small subset of metrics, a few have recently shown interest in expanding their field of determinants to include the currently in vogue idea of ‘happiness’.
Your claim that an economist ‘will never support a policy if it has a net negative on society as a whole’ is just not true and makes the false assumption that all economists are unbiased, uninfluenced characters, who work for companies and groups with no objectives to protect the interest  of their shareholders and affiliates, and that those objectives will never run contrary to objectives serving the good of society as a whole. That is just false. 
Finally, and even if you were right (in that, all economists are unbiased entities), my claim is that mainstream economics (particularly in macroeconomics) is terrible at understanding the reality of human behaviour, and as such, whether intentionally or unintentionally, their models and theories will lead to, if left to their own devices, the adoption of policies that could potentially have a ‘negative impact on society as a whole’.
A single case in point being (but I could provide hundreds of others): the reliance on flawed models that contributed to the scale of the 2008 crash – by encouraging decision-makers to underestimate risks.

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Trent0405: I saw you point to sustainability, but again, economists do care about sustainability.......You also pointed to social equity, but economists want to make sure some measures are put in place to make people more equal.......This is an example of an economist who doesn’t want the gains to be so lopsided, he deeply cares about equality, as do practically all economists. You pointed to crime, and again, economists care about crime....economists care about public transport as well.....
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It doesn’t really matter what their subject of interest might be. Like i pointed to earlier, economists are affiliated to separate companies and groups with defined objectives and interests. Those objectives and interests might be very different, and therefore, we shouldn’t be surprised that, for example, in the case of an economist working for a company that seeks to exploit the benefits of carbon tax, he will also be interested in the field of sustainability.
Firstly,  and just because he has an interest in the topic of sustainability doesn’t mean he is a non-biased entity and that his work won’t be influenced by this. Secondly, if the theory or the mathematical model is over simplistic or incorrect, his conclusions might also be.

My primary argument was not necessarily that the field of economics is too narrow and focused, but that the field is just bad at modelling and understanding society and human behaviour as a whole. 
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Trent0405: My first link does not show that, it merely shows that economists are against rent control, not the way they came to their conclusions......You will see a wide variety of reasons for their decisions which highlights the wonderful beauty of economics, and the brilliance of the people who study economics. 
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I read their comments. Almost every comment points to the supply and demand theory, in one way or other, and it was the basis on which they made their decision. I did not see a ‘wide variety of reasons for their decisions’. They all used slightly different language to denote the supply and demand theory. I also did not observe the ‘wonderful beauty of economics’. 
If variety denotes beauty, it cannot be viewed as beautiful. If accuracy and high predictability value denote beauty, it would also not be beautiful.  
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Trent0405: Also, if “economics is not a difficult field” then why is there so much disagreement amongst economists....Economists have the same facts and can come to completely different conclusions. If economics is simple why is there so much research done on it, and why is there so much less research done on urban planning if it’s so much more complicated?
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I’m not sure what difficulty has to do with disagreement here. Why would a difficult field lead to more disagreement within that given field?
Can economists have different facts? Yes. And, if their models were adequately descriptive of reality you actually wouldn’t expect them to reach this level disagreement and coming to ‘ completely different conclusions’.
Also I ’m not sure what the over-simplicity of mathematical models in economics has to do with the amount of research ‘done on it.
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Trent0405: I know I've thrown a good amount of links at you, but my young age and my lacklustre understanding of economics and urban planning basically force me to do so.
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It’s a good sign, and we are all in the same boat. No one can really know enough about topics like these: which are so large in scope and multidisciplinary. 


#12
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Rent control seems clearly inferior to housing vouchers (i.e., subsidies) and more public housing to me. A lot of housing access problems in India, where I live, but also in the US, arise from a small housing stock driving up prices. That also often leads to high population density in urban areas that’s not met by sufficient housing density, which prevents urbanization (that research consistently shows is a crucial path to development). Even if the price is controlled, when supply is constrained, (1) houses can just go condo and exclude the poor further or (2) they can allocate houses randomly, often in heavily discriminatory ways. The right solution, in my view, is means-tested housing subsidies, combined with the abolition of zoning laws and rent controls.
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@Marko

I sadly have to keep this one brief, I might touch on the other stuff you said in a later time.

 don’t think the term ‘massive concern of an economist’ is supported by the link you just provided. If anything, the link supports my position that, because economists are traditionally focussed on a relatively small subset of metrics, a few have recently shown interest in expanding their field of determinants to include the currently in vogue idea of ‘happiness’.


I mean, it examined 101 published studies, and sure it appears the bulk of the examined data came from research done from the 1970s to the 2010s. But, in comparison, I found a study done on urban planning and happiness which appears to have gotten its data from about the same time period(honestly it actually looks like the data is younger in the urban planning study). The research economists do on happiness appears to be quite abundant honestly.

I’m not sure what difficulty has to do with disagreement here. Why would a difficult field lead to more disagreement within that given field?

Difficulty will stem from the complexity and abundance of the ‘moving parts’ of a field of study. Coming to conclusions will inevitably be more difficult and more time consuming if a field is more difficult because there will have to be more data on more variables to come to a conclusion. This inevitably increases the chance for disagreement. 

I ’m not sure what the over-simplicity of mathematical models in economics has to do with the amount of research ‘done on it.

I wasn’t referring to mathematical models in economics. I was talking about economics and                                                                                                                                                                                    mathematics separately, looking at differences in the quantity of research published and the complexity of economics.

Your claim that an economist ‘will never support a policy if it has a net negative on society as a whole’ is just not true and makes the false assumption that all economists are unbiased, uninfluenced characters, who work for companies and groups with no objectives to protect the interest  of their shareholders and affiliates, and that those objectives will never run contrary to objectives serving the good of society as a whole. That is just false.

I would be a fool to claim that all economists are unbiased agents, but whatever corruption exists is present all throughout the social sciences(including urban planning). I wrote that from the perspective of an unbiased economist, not with the assumption that all economists are unbiased, I will of course admit that economists can have perverse incentives, but this is by no means exclusive to economics, and most economists are indeed honest actors.
 




I read their comments. Almost every comment points to the supply and demand theory, in one way or other, and it was the basis on which they made their decision. I did not see a ‘wide variety of reasons for their decisions’. They all used slightly different language to denote the supply and demand theory. I also did not observe the ‘wonderful beauty of economics’. 
If variety denotes beauty, it cannot be viewed as beautiful. If accuracy and high predictability value denote beauty, it would also not be beautiful. 

I think we are seeing different things here.
But anyway, what is wrong with supply and demand? It seems that it is remarkably accurate and has been remarkably accurate at predicting prices, despite noted and rare exceptions existing. We generally want goods and services to be affordable for the common man, and it appears that looking at supply and demand is a decent way of doing so. It seems as if you’re under the impression that this is the only thing economists use. 
Also, it again appears that the urban planning side offers little input on the issue of rent control, so it appears that your argument is "economists fail to come to conclusions properly, so let's side with urban planners," even though urban planners do little research on the topic. .


Finally, in my opinion, I think that even if I am to agree with you fully on all of your compelling and thought provoking points, I would still argue that economists are the people to go to purely because of the frightening lack of research on rent control from urban planners. I think it is fair to say that it is only fair to form an opinion based on what the totality of the evidence suggests, and I have only found one study on rent control which had a co-author with a degree in urban planning(he also had a degree in economics). So, urban planners could change my mind, but I would a little more


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Trent0405: I mean, it examined 101 published studies, and sure it appears the bulk of the examined data came from research done from the 1970s to the 2010s. But, in comparison, I found a study done on urban planning and happiness which appears to have gotten its data from about the same time period(honestly it actually looks like the data is younger in the urban planning study). The research economists do on happiness appears to be quite abundant honestly.
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My position isn’t dogmatically stuck with the idea that: replacing an expert in one field (e.g. economics) for another expert in another field (e.g. urban planning) is the favourable path to follow. 
And even though my personal view is that, overall, the average expert in the field of urban planning is more suitable than the average economist to inform decision makers on what housing development should be, this doesn’t necessarily mean that we should blindly follow what urban planners have asserted (and of course, urban planners might have their own biases, etc....). On a side note, economists are also part of urban planning groups.

Ultimately, and this is where I planned this conversion to eventually lead, the complex and interest-group  driven topic of rent-control must effectively be a political one.
Some could even argue that rent control is all about politics and not housing. I would take the middle ground and suggest that: the manifesto of most political parties have housing policies, and that those policies might closely relate to other fundamental beliefs and issues, but that in the long run, the state of housing and it’s problems are still considered. 
Later on, political groups may cherry pick ‘their’ experts in support of their housing policy, and finally, the population gets to vote on the policies given. 
In the ‘perfect’ scenario where voters know exactly what the manifesto stands for, and where politicians vote in the policies they stood for during election, the majority ultimately decides what the housing policy should be. Call it the democratisation of the housing and rental market if you will. 
Which isn’t to say that certain ‘truths’ in the subject do not exist, but that the subject matter is too complicated, varied,  and susceptible to abuse by a variety of interest groups.
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Trent0405: Difficulty will stem from the complexity and abundance of the ‘moving parts’ of a field of study. Coming to conclusions will inevitably be more difficult and more time consuming if a field is more difficult because there will have to be more data on more variables to come to a conclusion. This inevitably increases the chance for disagreement. 
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Difficulty could be measured in a variety of ways. In maths, the difficulty of a problem has nothing to do with the scale of variance (disagreement) of the proposed answers. So in the context of maths, variance is simply a measure of the ratio of right to wrong answers. A high variance denotes more wrong answers than right,  and a low variance denotes more right answers than wrong. 

But let’s just look at academic fields. The ‘hard and ‘soft’ term is used to differentiate between different fields and disciplines. Examples of ‘hard’ fields are physics, chemistry, biology, astronomy, and possibly mathematics, etc...Soft fields include the social sciences (political science, economics, sociology, psychology ), the humanities, art, etc....
It would be hard to argue that the ‘hard’ fields have less study difficulty than the ‘soft’ fields, most people would actually argue the contrary. 
Furthermore, ‘hard’ fields are generally characterised as having a higher degree of accuracy and objectivity, a higher ability to predict, and also a higher consensus (agreement) value. 
If you had argued for a proportional relationship between the complexity of a field’s area of interest and its level of disagreement I could have agreed with you.
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Trent0405: I wasn’t referring to mathematical models in economics. I was talking about economics and                                                                                                                                                                                    mathematics separately, looking at differences in the quantity of research published and the complexity of economics.
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The link above is a little dubious, in that it brings you to a job market site set within the field of economics. It pertains to a discussion between an economist and his younger self on why the field of economics is the best in the world, and why he should enter it. Generally speaking, most people within their given field think their field is the best or hardest in the world. 
The internet is filled with such links. The links below are also dubious but consider trends (like dropout rate, study time, etc) in the different fields. 

I didn’t see any link that showed economics on top, nor did I see any evidence that the scores required  to enter the field were higher than any other field (quite the contrary, compared to mathematics, physics, engineering, etc...).
But maybe you meant post study. 
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Trent0405: But anyway, what is wrong with supply and demand?
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The problem comes if we mistake the supply and demand graphs for the real world of uncertainty, speculation, purposeful behavior, and change. It just doesn’t doesn’t take into account  a change in people’s behaviour, and because of that, it makes knowing whether the change occurred due to a change in price or because of a change in behaviour impossible. 
It’s essentially a theoretical, circular mode of  thinking....and can be summarised using the utility model which is... ..’Utility is the quality in commodities that makes individuals want to buy them, and the fact that individuals want to buy commodities shows that they have utility’. This is an empty tautology and it closes It off to experimental testing, and therefore makes predicting trends pretty difficult (case in point, the inability to predict something like asset bubbles, as a result of positive feedback loops, etc...).
There are also areas of our societies that are best served by not using a supply and model strategy....like healthcare policy for instance. 

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@Trent0405
Rent controls did not fully fail in ny and cali. They werent fully successful at keeping rents affordable, but they kept them from being completely unaffordable either. Its not a yes or no scenario.

The reason ny and cali rent is so high is because a) people want to live there. And b) there are lots of jobs here. Unfortunately if low wage workers are not able to make it to those jobs, those jobs wont get done. Even if you increase the pay, you dont increase hours in a dat, and people dont want to spend all their day commuting/working/sleeping and never seeing their family as if they are a gerbil on an endless wheel. A city requires low wage workers within a reasonable distance, and that is what rent control provides.

Supply/demand is economics 101.... aka introductory. There are many levels of economics above intro, and even advanced economic models tend to fail due to expectations that people are "homo economicus" which we are not.

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This is a good quick video on rent controls.

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@Marko
My main question here is what utility does your opinion serve. I ultimately want studies, reports, papers, meta analyses... this is the way I am to change my opinion. If economists aren’t the right people to look to for answers about rent control, and I should look to urban planners, I need something from urban planners on rent control, if I could see a decent number of studies from urban planners that support rent control, then I would immediately make changes to my stance on the issue. I have heard a lot of reasons why economists aren’t valid, but your alternatives are worse because they haven’t offered anything of their own. 

Is it not true that urban planners have offered practically nothing on the issue? Is it not correct that I should value economists more because they have offered a significant amount of research(sadly no meta-analyses though)? All I know is that economists are the only group of academics that research the issue to my knowledge, so, even if I Concede all of the topics brought up, I still couldn’t, and wouldn’t say that urban planners will be the people to construct my opinion on rent control.

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We should build more housing instead of trying to control the rent.
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@Trent0405
Trent0405: My main question here is what utility does your opinion serve. I ultimately want studies, reports, papers, meta analyses... this is the way I am to change my opinion.
______________________________________________________________________________________________________________________

Yes. To propose the idea that, maybe, economists are not the best people to inform policy makers what housing policy should be like, is hardly a utilitarian conclusion. I never suggested otherwise. I merely pointed out that your initial post used economists as the only reference point to gauge the question of whether rent controls were useful or not, and that this was insufficient. I don’t need ‘studies, reports, papers, meta analyses’ to do that. 
More than an end goal of changing ones’ opinion, this discussion served to exemplify (to me, and maybe you) how complicated and multifaceted housing policy can be, and that this  policy couldn’t be accurately analysed using, for example, the old and over simplistic model of supply and demand. ________________________________________________________________________________________________________________________

Trent0405: If economists aren’t the right people to look to for answers about rent control, and I should look to urban planners, I need something from urban planners on rent control, if I could see a decent number of studies from urban planners that support rent control, then I would immediately make changes to my stance on the issue. I have heard a lot of reasons why economists aren’t valid, but your alternatives are worse because they haven’t offered anything of their own.
_______________________________________________________________________________________________________________________

I have repeatedly stated that this is a problem of this-and-that, and not either-this-or-that. You need a multi-field system of analysis— which includes urban planners along with a certain group of economists (including other fields too), and certainly not just economists (or even just urban planners, even tho the term ‘urban planners’, by definition, includes many different fields of study). 
_______________________________________________________________________________________________________________________

Trent0405: Is it not true that urban planners have offered practically nothing on the issue? Is it not correct that I should value economists more because they have offered a significant amount of research(sadly no meta-analyses though)? All I know is that economists are the only group of academics that research the issue to my knowledge, so, even if I Concede all of the topics brought up, I still couldn’t, and wouldn’t say that urban planners will be the people to construct my opinion on rent control.
________________________________________________________________________________________________________________________

The term ‘urban planner’ is a somewhat loose term that includes individuals with an education background specifically in the field of urban planning to individuals with a background in a variety of other fields. What makes them ‘urban planners’ is the vast field they are studying and influencing. So research papers won’t necessarily come with the tag ‘urban planners’, etc....Additionally, a large number of urban planners work for government groups and associations that don’t publish via the classic peer-review journal system, but through internal papers that report directly to government. 

Your second question asks whether I would agree with you that, because economists have supposedly ‘offered a significant amount of research’ in the field, that I should somehow ‘value economists more’ on the topic discussed. In this particular instance, even if it was the case that economists have published more, it tells us nothing about the quality or accuracy of the published content. ‘More‘ doesn’t always equal ‘better’, especially when the question of conflict of interest arises. 
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@Marko
Yes. To propose the idea that, maybe, economists are not the best people to inform policy makers what housing policy should be like, is hardly a utilitarian conclusion. I never suggested otherwise. I merely pointed out that your initial post used economists as the only reference point to gauge the question of whether rent controls were useful or not, and that this was insufficient. I don’t need ‘studies, reports, papers, meta analyses’ to do that.

The problem is, if it is correct that economists are practically the only people to research this, then no, it wouldn’t really be a notable problem for me to purely use economists to establish my position. Whether economists are a good source of info or not, if they are practically the only people to offer anything then I am merely working with the evidence presented to me.

I have repeatedly stated that this is a problem of this-and-that, and not either-this-or-that. You need a multi-field system of analysis— which includes urban planners along with a certain group of economists (including other fields too), and certainly not just economists (or even just urban planners, even tho the term ‘urban planners’, by definition, includes many different fields of study).

But  I’m not seeing this and that, I’m just seeing “this.” I looked up “Rent Control” into google scholar, this is the first page of results.

https://www.aeaweb.org/articles?id=10.1257/jep.9.1.99 Written by Richard Arnott, an economist.


https://www.aeaweb.org/articles?id=10.1257/000282803769206188 Edward L. Glaeser and Erzo F. P. Luttmer are both economists.



https://heinonline.org/HOL/LandingPage?handle=hein.journals/brklr54&div=32&id=&page= Richard Epstein is sort of fuzzy, but he studied law and economics in university, so not still an economist in my eyes.


https://www.sciencedirect.com/science/article/abs/pii/S0094119002005028 Both Jakob Roland Munch, and Michael Svarer are economists.


David P. Sims seems to be an economist, but I can’t find definitive evidence.

This is the first page of results, so probably the best studies(although I don’t know if high citation counts would make it a great study).

The term ‘urban planner’ is a somewhat loose term that includes individuals with an education background specifically in the field of urban planning to individuals with a background in a variety of other fields. What makes them ‘urban planners’ is the vast field they are studying and influencing. So research papers won’t necessarily come with the tag ‘urban planners’, etc....Additionally, a large number of urban planners work for government groups and associations that don’t publish via the classic peer-review journal system, but through internal papers that report directly to government.

But I don’t have access to these opinions, so I can’t know if urban planners have a strong opinion, how they reach their conclusions, or what hard statistics they are working with. Urban planners and their work are wonderful and add value to society, but if I can’t see their work, I’m left to purely hypothesize about their opinions, and how they reach them.

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@Trent0405
Trent0405: The problem is, if it is correct that economists are practically the only people to research this, then no, it wouldn’t really be a notable problem for me to purely use economists to establish my position. Whether economists are a good source of info or not, if they are practically the only people to offer anything then I am merely working with the evidence presented to me.
_______________________________________________________________________________________________________________________

We are now descending into a non-critical analysis of information with the sole objective of comforting one’s preexisting position on the issue, without listening or responding to the attacks made of that position.

Ive sufficiently outlined why I think the supply and demand theory is an insufficient and erroneous model to understand rent control outcomes, and therefore, why it is wrong for economists to blindly use this model in making claims against it (yet they almost all do). However, this attack to the core of economic thinking and doctrine didn’t even register with you as something important, worth absorbing and considering, and you just carry on chanting the ’more-research-papers-equates-to better’ mantra.

Completely beside the point and in response to you, more of something bad doesn’t magically transform into good. It’s just overall increasingly bad. 
______________________________________________________________________________________________________________________
But I don’t have access to these opinions, so I can’t know if urban planners have a strong opinion, how they reach their conclusions, or what hard statistics they are working with. Urban planners and their work are wonderful and add value to society, but if I can’t see their work, I’m left to purely hypothesize about their opinions, and how they reach them.
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That is a little disingenuous.
Why do you incessantly use the words ‘urban planners’ in the context of looking for research papers? I’m growing increasingly weary of repeating myself without you modifying your stance in light of what I just said. I repeatedly stated that urban planning is a multi-disciplined field of study, and therefore, the people working there will come from many different fields, and so will their research papers. 

But even before we start analysing the research output, we would have to know what the objectives and goals of a given urban space should be. From there we can direct our attention to researchers working in the field and see what research has to say about optimising those goals, using data and methodology that is as unbiased and as reliable as possible (and not overly dependant on supply and demand thinking, unless you adequately respond to my attacks on it).

Ultimately, goals define outcomes. Change the goals  and you will directly influence the results and outcomes. 

For example: the urban goal here is to maximise the building of new houses (for the rental sector). According to the supply and demand model, increasing the profit margins of landlords will increase the potential of them to build new houses, and therefore, increase the supply of housing as a whole.  And so the policy (based on the simplistic supply and demand model) is to deregulate the rental market. It roughly assumes that, because landlords are making more money, this will automatically result in them building more houses, and that some ideal equilibrium will be reached at some point.
This is a foolishly over-simplistic assumption. We haven’t begun to understand the behaviours and incentives of landlords and tenants, much less the specific urban environment ( much less where will the equilibrium be). But anyway, the goal and policy outcome was set. 

 Another specific example could be: the urban goal is to provide cheap housing for people living in the center of a large city (with a high population density, and with a low capacity to build new houses) and to reduce their commuting time. The urban goal rightly assumes that long commuting to work has overall negative outcomes. In this example, the policy outcome considers an urban space with limited potential to expand and sets additional goals such as the price of rent and the reduction of commuting time.  

These 2 examples could be two different goal-sets, applied to one specific region. Their stipulated goals are different and so are their policy outcomes. The first demands for rental price deregulation, and the second would probably come to the conclusion that rental controls are important. 
They could additionally both be right, based on what their specific goal was. 
In other words, goals determine outcomes (and also what and how we measure results). 



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#22
Trent0405
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@Marko
Howdy, first  want to address this point.

That is a little disingenuous.
Why do you incessantly use the words ‘urban planners’ in the context of looking for research papers? I’m growing increasingly weary of repeating myself without you modifying your stance in light of what I just said. I repeatedly stated that urban planning is a multi-disciplined field of study, and therefore, the people working there will come from many different fields, and so will their research papers.

I showed you the first page of results on “rent control” from scholarly sources, and all of them were economists with one guy who also had a background in law. So unless these urban planners are working under the title of “economist,” then this critique holds little water in my eyes.
And I do not need to use urban planners to argue my point, which is why I looked and noted the fact that economists, and only economists were present on the first page of google scholar. You offered urban planners, so yes a lot of my effort was put into urban planners because that was what you proposed, but I have not acted as if your points don’t exist.
And I am not being disingenuous, I haven’t pretended to know less than I do, I purely admitted that I know little, which is true. I am very uncomfortable as a layman to dip my toes into fields I know literally nothing about(this is why I like studies a lot, but that’s besides the point).

you just carry on chanting the ’more-research-papers-equates-to better’ mantra.

What I’m trying to communicate is that I will trust something over nothing, your critiques on economists and the ways they come to their conclusions is only valid if these faults make their research obsolete. You said,
Note that I’m not suggesting economists are useless but just that their position on certain issues should be taken with a gain of salt.

So I should find some value from economists , just I should be skeptical, got it. 
Let me break down what I’m seeing.
  1. Economists’ opinions should be treated with a good deal of skepticism.
  2. Economists publish basically all of the research. 
  3. So me using economists to form my opinion was merely as a result of them being the only ones researching this topic, not me treating them as great sources of info.

Also
  1. You propose another source of info, using urban planners as one example, but not the only one.
  2. They don’t offer me anything, all of the first page of scholarly sources is written purely by economists.

As for your points about the ability of economists to come to a good conclusion…
We always go to this but I am weary to move into this, purely because I lack the ability to truly locate methodological failures(because I’m uneducated). I hope my weariness is understandable. I guess I’ll get going on this with new research to inform my opinion.

The problem comes if we mistake the supply and demand graphs for the real world of uncertainty, speculation, purposeful behavior, and change. It just doesn’t doesn’t take into account  a change in people’s behaviour, and because of that, it makes knowing whether the change occurred due to a change in price or because of a change in behaviour impossible.
Utility is the quality in commodities that makes individuals want to buy them, and the fact that individuals want to buy commodities shows that they have utility.

But this is a hotly contested issue. Your objections practically line up word for word with notable economists. This is not a blindly accepted truth clearly. It is a real debate going on.

For example: the urban goal here is to maximise the building of new houses (for the rental sector). According to the supply and demand model, increasing the profit margins of landlords will increase the potential of them to build new houses, and therefore, increase the supply of housing as a whole.  And so the policy (based on the simplistic supply and demand model) is to deregulate the rental market. It roughly assumes that, because landlords are making more money, this will automatically result in them building more houses, and that some ideal equilibrium will be reached at some point.
This is a foolishly over-simplistic assumption. We haven’t begun to understand the behaviours and incentives of landlords and tenants, much less the specific urban environment ( much less where will the equilibrium be). But anyway, the goal and policy outcome was set.

This is only true if we believe supplyside memes. The idea that supporting supply increases leads to a lowering of demand which lowers prices, but this is again hotly contested, it is by no means a well accepted idea, this proposal would be heavily reliant on other factors, and keynesians would most definitely oppose this if provided greater context. I also greatly doubt that modern economists would look to supply side as a means to solve everything.




I apologize for making you feel as though your points have been ignored, but I still am having trouble seeing what you're saying, it may just be because this conversation is out of my league, but still, I am having trouble. If you're not arguing utility, as you admitted, and you’re merely arguing that economists are poor sources of info, but they are the only people writing about this(as I proved). So I feel like you’re moving your finger without pulling the trigger. As I have said before, even if I grant you everything, I don’t know if I could change my position because your points aren’t leading me anywhere.

7 days later

#23
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@Trent0405
I am against rent controls, and so are economists. 81% of economists say that rent controls failed to provide cheap and high quality housing in New York and San Francisco, while only 2 percent of economists said otherwise.
I think the problem here is an issue of all or nothing fallacy. Sure i will agree that rent control policy was unable to keep up with housing costs... but the questions remain:

1. Would a different rent control policy provide better results?
2. Demonstrating that current policy was not successful in its goal doesnt mean no policy would have better results. The current outcomes could be unsatisfactory but still better than if we did nothing.

Rather than proving that current policy failed to reach a certain goal, you should try to prove that no policy would achieve that goal better. And i will argue it will not.
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#24
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@Nemiroff
1. Would a different rent control policy provide better results?
Sure, different policies in different circumstances can yield completely different results. The purpose of this forum was looking at rent controls generally.

2. Demonstrating that current policy was not successful in its goal doesnt mean no policy would have better results.
Well, I agree the policy may have worked had it been changed.

The current outcomes could be unsatisfactory but still better than if we did nothing.
Maybe, but in one of my sources it said removing rent control could actually lower prices. Another one of my other sources said it hurt the quality and quantity of housing. I would assume they were talking generally about rent control, so in other circumstances it could have an opposite impact, but my point still stands.

Also, I accidentally messed up the question they were asked, it was not specific to New York and San Francisco. Here is the question they were asked.

Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them.

81% disagreed(95% if we adjust for how confident they were). So they don't think there was any positive impact on quality or affordability of housing.
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@Trent0405
Im sure the experts explained how rent controls negatively impacted availability and prices. Having you summarize those explanations would be helpful for the clarity of my response.

Assuming im seeing the same expert opinions, over the *long term*, rent controls do hurt prices, availability, and quality of housing. I will conceed that. However, i will argue that they were put in place to resolve a short term problem that required a solution. The consequences of ignoring that problem were far higher than the consequences of rent controls.

A city requires low wage workers. This includes the heart of downtown, financial districts, and wealthy areas which require cooks, janitors, delivery, taxi, maintenance, etc. There is only so many hours in a day and if travel to and from work becomes to great, it becomes prohibitive. For the city to continue to function, a solution was required. Could there be better solutions? Perhaps. But the continuing thriving of cities like NYC and LA suggest the increased costs were not too great. 

Do you think the free market could have adjusted to that problem? Do you suggest better alternatives?
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@Nemiroff

Im sure the experts explained how rent controls negatively impacted availability and prices. Having you summarize those explanations would be helpful for the clarity of my response.

Okay, it appears that rent controls have a negative impact on investment in housing. This is because investing becomes less viable and lucrative, leading to reduction in housing quality, supply, and price. This lack of investment resulted in 30,000 lost apartments in New York every year over 11 years in New york as a result of rent controls according to William Tucker. 

Assuming im seeing the same expert opinions, over the *long term*, rent controls do hurt prices, availability, and quality of housing. I will conceed that. However, i will argue that they were put in place to resolve a short term problem that required a solution. The consequences of ignoring that problem were far higher than the consequences of rent controls.

This is just me spitballing, but if rent controls lower quality and affordability in the long term, then wouldn’t the problem still be present and worsened ultimately?    If the problem can be remedied for a brief moment, but the aftermath worsens the situation then I see little utility in rent controls. 

Do you think the free market could have adjusted to that problem? Do you suggest better alternatives?

I am unsure, it seems like government regulation that restricts housing supply is a big factor in increasing housing prices, but federal housing programs have also found success. A pure laissez faire solution will most likely be unsuccessful. Maybe kickback regulation but still maintain some government intervention.

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@Trent0405
This lack of investment resulted in 30,000 lost apartments in New York every year over 11 years in New york as a result of rent controls according to William Tucker. 
Yes, but the referenced rent regulations are decades old (as the negative effects are slower to kick in). In the meantime, the city has maintained a necessary low wage workforce it requires for functionality.

Without the workforce these cities may collapse and lose far more jobs, housing, and population. Im pretty sure at least our two examples are growing quite well and the 30k lost is a drop in the bucket for what was gained thanks to the availability of local and relatively cheap labor.

This is just me spitballing, but if rent controls lower quality and affordability in the long term, then wouldn’t the problem still be present and worsened ultimately?
I was considering an infinitely cumulative cost would certainly undermine any benefit no matter how small it costs, but these effects are not permanent. Even if someone leaves and their friend commits fraud, it will ultimately end when the person dies. The apartment resets to market rate, but then increases are again limited. Renters can't pass on their apartments. The aftermath seems to be far better than the consequences of inaction.

I am unsure, it seems like government regulation that restricts housing supply is a big factor in increasing housing prices, but federal housing programs have also found success. A pure laissez faire solution will most likely be unsuccessful. Maybe kickback regulation but still maintain some government intervention.
The government isnt restricting supply, it is inadvertently disincentiving more building through a complex chain of events. It's a stretch to consider that intentional. Some localities are providing tax subsidies to encourage building, that is one way to counter balance the negative. Is that what you meant by "kickback regulations?"

Another solution would be to increase transportation speed so they can live farther away but not increase commute times. Something like maglev trains, but that's not really a repeatable solution.

In conclusion 
I think inaction would have been disaster and rent control was most certainly better than no action.
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#28
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@Nemiroff
Yes, but the referenced rent regulations are decades old (as the negative effects are slower to kick in). In the meantime, the city has maintained a necessary low wage workforce it requires for functionality.

Without the workforce these cities may collapse and lose far more jobs, housing, and population. Im pretty sure at least our two examples are growing quite well and the 30k lost is a drop in the bucket for what was gained thanks to the availability of local and relatively cheap labor.


But it is actually harming the workforce from the research I’ve found. In SanDiego rent controls resulted in an increase of unemployed people by 40.9% in just 4 months(Page 666). So rent controls are contributing to the problem, not solving it.
Also, despite a very very small increase in the number of employed people, this is most likely because of an increase in population.
 Also, it was 30,000 per year, so it was actually 330,000‬ lost apartments lost as a result of rent control.

The government isnt restricting supply, it is inadvertently disincentiving more building through a complex chain of events. It's a stretch to consider that intentional. 

I don’t think the government passes rent control expecting it to cause housing shortages(15% reduction in rental housing) and increase unemployment, but that is what the end result is, and the end result is really all that matters to me. 

Some localities are providing tax subsidies to encourage building, that is one way to counter balance the negative. Is that what you meant by "kickback regulations?"

Well the source I sent stated that green belt, open space, and urban growth boundary regulations were playing a significant role in the increasing price of housing, so maybe roll those back.  Also, just to make things clear, kickback regulation means shrink the amount regulation, at least in some ways.

In short, I can only agree with the consensus of economists, “Rent control creates many more problems than it solves.”

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But it is actually harming the workforce from the research I’ve found. In SanDiego rent controls resulted in an increase of unemployed people by 40.9% in just 4 months(Page 666). So rent controls are contributing to the problem, not solving it.
What i meant to say is that with rent control you do have housing inefficiency.
But without rent controls you lose a fundamental part of a city's workforce and the whole thing will lead to instability and possibly economic collapse. 

I'll take some inefficiency over instability any day. 
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What i meant to say is that with rent control you do have housing inefficiency.
What is housing inefficiency? I looked online and found nothing.

But without rent controls you lose a fundamental part of a city's workforce and the whole thing will lead to instability and possibly economic collapse. 
Well rent control does keep people in particular parts of a city because rent control disincentivises moving. But when it comes to the workforce, it had negative effects, a 40.9% increase in unemployment, but only a >1 % in the employed doesn't look good. I know my source doesn't look specifically at low wage and low skill labourers, but I think I can assume that some of that 40.9% is comprised of low skill low wage labour.