'Renters Are Struggling': Economists Back Tenant-Led Push for Federal Rent Control

CriticalMiss , 10 months ago

Don’t allow companies to own residential properties… it’s that simple…

bluGill , 10 months ago

That is a bad idea as owning a house isn't right for everyone.

koro , 10 months ago

While that may be, companies should not be able to have a stronghold on what should be considered a basic human need. Housing is already in pretty short supply, and it’s worsened by the fact that these companies buy a considerable chunk of this short supply and then turn the purchased properties into rentals.

SCB , 10 months ago

“buying one home and turning it into 4 home reduces the amount of homes” and other fun takes.

koro , 10 months ago

“Buying a house and renting it out to families that were wanting to buy it outright in the first place” FTFY

SCB , 10 months ago

Oh I’m sorry, do 4 families generally get together and purchase a house as a collective?

lolcatnip , 10 months ago

People buy parts of buildings all the time. They’re called condos and multiplexes.

4am , 10 months ago

“Buying one home and charging 4x as much for it” is the actual problem, but I suppose you have your head in the sand by default when the large boot of capitalism is on your neck.

SCB , 10 months ago

Strong disagree. People having homes where they otherwise would not is a feature, not a bug.

If you want prices down, you must increase supply

Hextic , 10 months ago

Fuck you you shouldn’t own a goddamn thing with that mentality.

You bootlickers are the reason shit is bad and was always bad.

andrewta , 10 months ago

Solid intelligence response there

RubberElectrons , 10 months ago

Parse their response, instead of just the tone. That person’s mad and sad both at how tough living has become.

DaveFuckinMorgan , 10 months ago

We’ve all had that one lazy piece of shit roomate that never cleans up after himself and I bet it’s him.

Bardfinn , 10 months ago

Rent is due on the first

csfirecracker , 10 months ago

The idea being proposed here doesn’t outlaw renting, only corporate ownership of residential property. It means that the people you’re renting from are human beings who will eventually die and either be estate taxed or the house will be sold, rather than a corporation who owns your property until they go bankrupt or until the sun explodes.

MajorHavoc , 10 months ago

Bingo. A lot of current problems get better by:

A) 100% death tax on all money over 100,000,000.00 at time of death.

B) Closing loopholes that allow hiding that kind of money in unnecessary corporate assets or non-charitable trusts.

C) Cracking down on what qualifies as a charitable trust. Want to leave that money to trust that makes the world better, better have numbers to prove it or it gets disolved automatically into other more effective charities.

D) Automatically splitting every corpportation the moment it crosses a reasonable value threshold.

afraid_of_zombies , 10 months ago

So corps pay higher taxes on property vs sole owners?

circuitfarmer , 10 months ago

Lol no one gets forced to buy one just because prices become realistic, wth

electriccars , 10 months ago

And non US citizens.

tiredofsametab , 10 months ago

As a US citizen living in another country and trying to buy a house, you want me to have to change my citizenship to do this? 0.o I've lived in Japan for the better part of a decade and am trying to buy a property where, hopefully, my wife and I can live for the rest of our lives. Having to become a citizen in Japan (which does not allow other citizenships except in some very specific cases) is a non-starter for me. I need to be able to freely enter and leave the US in case my family have any issues. Why should I be fucked like this?

InfiniteVariables , 10 months ago

They probably mean non-residents instead of non-citizens. Would make more sense that way at least.

tiredofsametab , 10 months ago

Yeah, that would be reasonable.

FlyingSquid , 10 months ago

And you could make that non-local residents and it would still work out well. Stop letting foreign and domestic “investors” buy up all the housing in cities they don’t live in.

EssentialCoffee , 10 months ago

I mean, housing issues and challenges in Japan are likely different than in the US.

If Japanese law required you to be a Japanese citizen in order to buy a home, then yeah, I’d expect you to become a citizen to get a home.

tiredofsametab , 10 months ago

I just happen to live in Japan, but you can reverse the countries in my example if it helps. If I were a Japanese citizen living in the US almost 10 years and wanting to just buy a home for my family, I think it's unreasonable to have to give up Japanese citizenship just to get a house in the US. Using my example, I would not give up JP citizenship because I have aging family I need to have unlimited access to in Japan.

EssentialCoffee , 10 months ago

I’ll be honest, I don’t think it’s unreasonable to need to go through some form of certification to purchase residential housing.

To use US terms, as those are what I’m familiar with, a greencard would be sufficient, since it would allow you to legally live and work in the country.

tiredofsametab , 10 months ago

I would say "valid status of residence/visa" (greencard/permanent residence can be super long processes of over a decade), but yeah that makes sense to me.

EssentialCoffee , 10 months ago

Just a visa would be too low of a bar, imo. Show you’re a permanent resident and planning to stay here.

tiredofsametab , 10 months ago

So if that process takes a decade or more the person can just... go fuck themselves despite any intention of permanently living somewhere? This is especially rough on people who move mid-life. I also don't know if the US has an upper age on mortgages which could basically keep people out of home ownership which can also keep them in a position of less stability.

EssentialCoffee , 10 months ago

Young people can’t own homes now because we have a lot of corporations and foreign ownership buying them to either rent at exorbitant costs or leave vacant as investments. I don’t really care about the hypothetical person who might come over here at some point maybe pinkee swear when folks here are having issues now.

Also, I confirmed with someone who does mortgages that there isn’t an upper age limit on getting a mortgage in the US, so that’s not a concern.

tiredofsametab , 10 months ago

I mean, this is just dodging the situation. I'm a hardworking, tax-paying person, but fuck me because some other people are doing bad things? That's not good policy. Stopping people living in the country on valid status paying taxes from buying a place to live is asinine.

EssentialCoffee , 10 months ago

According to your comments, you’re living and buying property in Japan in order to reside there for the rest of your life, so you’re arguing about policies that aren’t effecting you and that you’re not even a party to.

I guess you can find someone more in tune with Japan’s housing market and issues there to discuss the best practices for Japanese laws.

tiredofsametab , 10 months ago

I have known people who have gone through the same thing in the US. I also have family in the US still who very much are impacted by the housing situation there.

This just reeks of "foreigners bad" and possibly racism.

There are many things that can be done other than banning foreigners who haven't yet achieved greencard status but just want to have a place for themselves and their families to live to still achieve that. I don't think you'll find foreigners are the big issue here, and you already mentioned corporations which are a big issue. Attacking foreigners wanting to buy a house is not OK; that's approaching apartheid-level bullshit.

lolcatnip , 10 months ago

Non-residents, not non-citizens.

SCB , 10 months ago

That simply results in shitloads of homeless people

Arbiter , 10 months ago

Good thing our current system doesn’t.

Arbiter , 10 months ago

Good thing our current system doesn’t.

SCB , 10 months ago

By comparison it does not

MasterObee , 10 months ago

Who’s going to make apartment buildings? Isn’t that the best solution towards making more housing, to have compact apartment structures? How do you think those get built?

aesthelete , 10 months ago

You could make every one an HOA and have it be condos.

Honestly I don’t think outright prohibition of companies owning buildings is good, but there needs to be a better mix of ownable housing units to rentable ones. There also needs to be better anti-trust enforcement so that three companies don’t own and price control nearly all of the housing in a city (I think there’s maybe six companies in my city that own almost all of the apartment complexes).

They should mandate that a certain subsection of newly zoned housing be owned by people instead of corporations. It would be a much better, much more competitive market for housing if it were possible to own apartments because you could get small time landlords in those buildings as well as people that own their places outright.

sudo22 , 10 months ago

deleted_by_author

MasterObee , 10 months ago

It is property…for residents…

sudo22 , 10 months ago

Nope. masterclass.com/…/residential-real-estate-guide

MasterObee , 10 months ago

I supposed we can both find sources to say whether it’s commercial or residential. www.google.com/search?channel=fen&client=fire…

I guess my question is, what’s the point in arguing about this? Are you saying the only housing corporations should own are apartment buildings, the biggest most efficient source of housing for individuals in large cities?

sudo22 , 10 months ago

My bad I thought residential prop meant single family homes.

But I didn’t say anything about who should own apparements. My only point was when people refer to residential property that refers typically to single family homes and is likely what op is referring to as well.

4am , 10 months ago

It’s literally the most residential of all possible properties, what are you talking about?

sudo22 , 10 months ago

Already apologized, look farther down.

flossdaily , 10 months ago

My understanding is that rent control backfired pretty spectacularly in the long term.

The better plan here would be to stop companies from buying residential properties, to incentivized the conversion of commercial properties into apartments, to penalize banks and individuals who are sitting on unused residential properties.

Oh, and wipe out all student loan debt so that younger generations have a prayer of buying a house someday.

girlfreddy , 10 months ago

@flossdaily @return2ozma

Who told you rent control backfired? Cause that's a lie. It was just never adopted as widely as it should have been, and rich owners always have the ear of lawmakers ... the same can't be said of poor/working poor people.

flossdaily , 10 months ago

Like… Every economist:

washingtonpost.com/…/comeback-rent-control-just-t…

trias10 , 10 months ago

Capitalist/free market* economists.

Rent control works just fine in a more socialist model, especially when the government is a prime builder of housing without seeking profit, as almost every European country was during the 50s-70s. It’s only when government gets out of house building and everything gets privatisated and for-profit that rent control fails.

flossdaily , 10 months ago

Don’t know if you’ve noticed this yet, but the United States has a capitalist economy.

RubberElectrons , 10 months ago

Semi. It’s got bits and pieces of all systems, which is a hint that the “-ism” powering any country’s economy doesn’t have as big an impact as its leaders.

Unfortunately, capitalism tends to reward corruption, it’s much easier and profitable to be corrupt than to do the right thing™.

Libraries are socialist. Otherwise every person in a fully capitalist system would be expected to buy their personal copy of a book.

honey_im_meat_grinding , 10 months ago (edited 10 months ago)

What you’re referring to is called a “mixed economy” en.wikipedia.org/wiki/Mixed_economy

And you’re right - there are scales with capitalism and socialism weighing against each other in basically every economy. Finland, Norway, France are examples where it’s tipped a bit more in favour of the “socialism” side. But the US has plenty of elements of socialism, from housing coops in the Bronx, to utility coops in the midwest (that helped pave the way for the electrification of rural America), to credit unions, to welfare policies, to the Alaska social wealth fund, and I could keep going.

SCB , 10 months ago

Finland and Norway have among the highest percentage of private investment in the world, to the extent that investment is the leading economic driver in Nordic countries.

They are not socialist countries.

SCB , 10 months ago

Libraries are not socialist. Socialism is not, in fact, when the government does things.

RubberElectrons , 10 months ago

Thank you, boring and incorrect pedant.

It truly depends on the definition of socialism. Is it socialist anytime a service is provided by the govt? Or solely when public policy limits the abilities of capital?

You and I disagree, and that’s ok cuz I don’t care.

SCB , 10 months ago

Yes we disagree on the meaning of a word, which means one of us is correct, and it’s me

RubberElectrons , 10 months ago

You’re wrong again and contribute nothing, as usual. How sad.

STUPIDVIPGUY , 10 months ago

And it’s failing

circuitfarmer , 10 months ago

The US has lots of socialized losses but privatized profits. To call it a capitalist economy is a gross oversimplification which glosses over the fact that no corporation is actually competing in a free market at this point.

SCB , 10 months ago

You may want to look at how rent control turned out there, and why Europe is broadly turning against rent control, and seeing it as a mistake bloomberg.com/…/berlin-s-rent-controls-are-provin…

trias10 , 10 months ago

I unfortunately can’t read that article as it’s paywalled, but looking at the link, it’s an Opinion piece, so not factual reporting. It’s also from Bloomberg, one of the most pro-capitalist publications out there, second only to The Economist in its championing of all things pro globalist and pro capitalist.

The main stream media which is all very pro capitalist (as they’re all owned by billionaire oligarchs) has been shitting on rent control for decades.

Here’s a more nuanced article on the matter which doesn’t come from such a pro-capitalist, classical economic outlook: theguardian.com/…/berlin-rent-cap-defeated-landlo…

SCB , 10 months ago

That article is literally about how rent shot up because of rent control policies.

Also it is an opinion article and written as if rent control is a good thing.

trias10 , 10 months ago

Rent didn’t shoot up, how could it, the whole point of the law was it was frozen.

I think you’re missing the forest for the trees in this entire conversation: rent has been skyrocketing everywhere, in every G8 country, for the last 20 years. Especially in places like London, NYC, LA, Seattle, Paris, Toronto, Bay Area, etc. Hell, even in Salt Lake City where I used to live my rent went from £1816/mon to £2600/mon for the same flat, in just 2 years. And none of those cities have classic rent control (NYC has a few places which have it, but overall it doesn’t). So clearly with a free market, pure capitalist approach, rents have only been skyrocketing. Same thing for housing to buy, have you tried buying a house lately?

So to claim that rent control or rent freezes lead to higher rentals or less supply is wrong, because rents are going up in a free market too, and supply is already at an all time low (hence the prices shooting up).

So you’re fucked in either situation. The real problem is there just isn’t enough supply of shelter for people, and that’s because if you leave it to the free market, there’s no incentive to build affordable housing with no profit. Hence, because shelter is something required by citizens, government should be building it even at a huge loss. Just like government provides fire brigade and military at a financial loss, because people need these things. You don’t leave essential services to the private market because it may not be profitable to do them, for example, rural communities have shite internet, why? because it’s not profitable to dig and lay fibre optic cable into some rural hinterland for just a few hundred customers. So in Norway, the government steps in lays that fiber optic at a financial loss because it wants its citizens to have a better life. Same for housing. If the private sector isn’t doing it, the government should be. Just like in the 60s.

SCB , 10 months ago

Rent goes up because we have insufficient housing construction, and we have insufficient going construction becuause zoning laws prevent housing construction. Literally none of the places you bring up have anything approaching a free market wrt housing construction.

I am aware that the government can encourage building and it should do so. Vote locally to repeal zoning laws.

If government says the private sector cannot do something, then yeah you’ll see few or no businesses doing that thing.

trias10 , 10 months ago

Zoning is only a small part of the problem. Even if you zoned a bunch of new land today, if you let the private, free market have its course, then what do you think will be built on that land? Highly unaffordable luxury flats/houses, because that is what leads to the highest profit margins for the private sectors builders. And those flats will be bought up by investors or wealthy individuals to create more unaffordable rent.

That’s the core issue, individual private sector interests are not aligned to be altruistic interests for the good of society. They want to maximise profit, nothing more. Hence, you need someone willing to build houses and sell them at a loss, so average people can afford housing again. Only the government can sell for a loss and remain in business.

Ergo, you can zone all the land you want, but if you only let private sector builders have it, then you’ll just get more and more unaffordable properties built, chasing rich foreign investors, tech millionaires, or pension funds.

This is the core issue with Thatcherism/deregulation/privatisation. An individual company’s profit margins don’t always align with the good of society, but society needs essential services (water, sewage, electricity, food, housing, defense). These things need to be provided to all citizens, urban and rural, but doing so doesn’t always guarantee a profit, so you can’t just leave it to the private sector only.

SCB , 10 months ago

You’re so close! Once you figure out those luxury flats will go for quite a lot, then free up downchannel housing you’ll understand how this all actually shakes out when people can build.

trias10 , 10 months ago

But that’s not what actually happens!! It’s like the Laffer Curve, we don’t actually see any of these benefits of letting the free market try to create all these supposed benefits and efficiencies. The textbooks say they should happen but in practice they never do. Even when the UK government releases state owned brownfield land, developers build overpriced flats no one in the local area can actually afford. So it doesn’t actually create any net new living space because 1) the local populace can’t afford it, 2) it gets bought by investors.

How does having investors scoop up luxury flats release downchannel housing at all? I have never seen that happen. Even in places where land is cheap and zoned for residential, like in areas of Utah, they never actually build affordable housing on it. People end up locked into renting.

SCB , 10 months ago

The Ladder Curve is not a concrete thing. It’s a metaphor to explain optimal taxation. It was literally first drawn on a napkin

How does an increase in supply that outpaces demand not lower prices? That’s the question you need to answer.

“Locked into renting” and “affordable housing” have no meaning and are useless terms for discussion.

trias10 , 10 months ago

It’s not a metaphor, it’s as you say, an economic theory for the optimal rate of taxation, which exists somewhere between 0% and 100%. However, in the USA it has been put into practice over the past 30 years, where taxes on the extremely wealthy have fallen drastically over that time, with the thinking being that this would raise government revenue and also all that trickle down hogwash. Only it hasn’t, and it has only served to weaken revenues at the local community and state level, and caused wealth inequality worse than the gilded age.

In terms of housing, you are correct in principle, if the supply of housing was to drastically increase such that it outpaced demand, then sure, prices would fall. But this is a specious argument for a number of reasons. First, even if zoning was abolished tomorrow, it’s impossible to actually build new housing in most of the world’s most expensive cities, such as NYC, London, and LA, because there’s simply no space to build anywhere, except on the extreme periphery. London still has some brownfield land, but LA is boxed in by mountains, and Manhattan literally has no more space because it’s an island. So where do you actually build? Vertically, okay, but then you have destroy existing structures.

Secondly, and perhaps more importantly, even if you allowed easy zoning, and cleared out lots for mega towers, who is going to actually build so much supply so as to flood the market in order to crater prices and make housing affordable? That’s the dumbest thing ever, no builder wants to see prices come down, that would be like DeBeers flooding the market with diamonds, massively increasing supply and dropping the price, and killing their own profits/margins. Builders want high prices, not low, they have no incentive go on a building boom like in 2007 such that prices drop.

So you’re left with my original argument: you can’t leave housing solely to the for-profit, private sector. They have no incentive to build affordable housing, or flood the market with over supply in order to drop prices.

SCB , 10 months ago

Yes existing structures need to come down. Homes built for one family should be purchased and turned into large homes for many families.

trias10 , 10 months ago

Yeah but by whom? What’s the incentive for private sector builders to do that at scale if it means lower prices and lower margins by dramatically increasing supply?

SCB , 10 months ago

Why do you think this will significantly impact margins? If a builder builds a house for $300k right now, the cost of the lot is eating a shitload of that $300k. If my home doubles in value (which it has), the land itself is more valuable.

By the same token, if I build a 4 story apartment building on my same lot, I make significantly more money over time than I would selling it once to a homeowner.

trias10 , 10 months ago

Your own answer from earlier said so: increase supply massively whilst demand stays constant, means prices come down. Fair enough.

Well, if prices come down, margins by definition decrease, because building materials and labour aren’t decreasing too.

Ergo, even if zoning restrictions were relaxed massively, and permits handed out quickly and easily, there’s no incentive to flood the market like in 2007. This is especially true of big high rise, high density properties, as there usually are only a few companies who can build such buildings (in central London there’s like 4), so it makes collusion to keep supply low much easier. Sort of like how OPEC works.

SCB , 10 months ago

if prices come down margins must come down

This is not accurate.

Flood the market in 2007

This is not how the housing bubble popped. It was demand-side, due to (absurdly) loose credit. Home prices were still rising dramatically in 07 - supply was not keeping up with demand.

trias10 , 10 months ago

Why is it not accurate? House prices come down but cost of materials and labour stay constant or go up, what am I missing?

Also, I feel like we have gotten so far off track so as to forget what exactly we are arguing about.

The original discussion was how to fix the housing market so as to create way more affordable housing. My original argument was the government has to do that, by building houses at a loss, which only the government can do.

Your argument seems to have originally been that the true problem is the zoning and government red tape, but I feel like we have both come to the conclusion that neither of those is true. Firstly, even if zoning isn’t a problem, in places like LA and NYC there’s no physical space left to build, except vertically. In London, the only new land to build is way outside Zone 5. Furthermore, what incentive is there for private sector builders to flood the market with new supply, either horizontally or vertically? No industry likes it when the price of their product goes down, not a single one, and no industry is going to help that happen.

Finally, building vertically requires way bigger companies to get involved, meaning there are fewer of them, meaning it’s easier for them to collude to keep prices high. Building a ranch house out in Wyoming can be done by some local two-bit builder, but a skyscraper in Manhattan would need to be some big multinational. Ergo, even if the only solution is Shanghai style vertical flats, the prices are even more suspectible to collusion by the few big companies able and willing to build them.

Or, like I said, bypass all this bollocks and have the government build loads of houses and sell them at a loss, flood the supply and bring prices down for the altruistic, non-profit motive of getting more people into housing. Done and done.

SCB , 10 months ago

Materials and labor are relatively static compared to home costs. A 10% rise in housing costs was like another 15-20 grand in most cases, before housing costs exploded, factoring in inflation.

Compare that to the doubling (or more - my home is over 250% of what I paid) of home prices (tied to lot value) and the difference is stark.

Even assuming a dramatic increase in parts/labor of like 50% of those costs and you’re barely hitting on the final value, all things considered.

Space is the problem and building vertically (even just 2-4 stories) is the answer.

If it helps, consider that parts and labor are generally 30-50% of home costs (assuming “normal” values) and even a doubling of that cost is less than the growth of home prices.

By far, the biggest cost increase has been lot value.

MasterObee , 10 months ago

Can you name some countries/policies where it’s a continuing success?

trias10 , 10 months ago

Depends on your definition of “success.” Countries such as Holland, France, Canada, Germany, and China all have caps on the amount by which a landlord can increase rent in any given year, usually by law it’s less than 5%, or indexed to inflation (but with 5% as the max). These laws are incredibly popular with renters and have been around for decades.

Berlin implemented a hard rent freeze in 2020 which was extremely popular with renters, but not with landlords, naturally.

However, rent control isn’t just a hard price cap like back during the war, there are many nuanced aspects, see here for information: theguardian.com/…/berlin-rent-cap-defeated-landlo…

girlfreddy , 10 months ago

@flossdaily

Putting all your faith in economists whose sole purpose is to back the current capitalist shitshow that rapes the land and kills the poor is a strange take.

But you do you I guess.

honey_im_meat_grinding , 10 months ago

The author of that article is Megan McArdle. A quick look at her other articles:

• An article that attempts to shift blame away from media execs and onto consumers, in response to the writers/actors’ protests
• "Higher minimum wages may increase homelessness" (literal article title)
• Says we shouldn’t expect to keep taxing wealthy people more
• Wants to reduce medicaid but conveniently doesn’t mention the amount of death poor people will experience as a result of that, using the same austerity justifications we’ve heard in Europe already (that turned out to be bullshit)

I’m sure she has no right wing economics bias lol

Here’s a much more balanced article on rent control that actually sources econ research papers by a person with a PhD in economics: jwmason.org/…/considerations-on-rent-control/

tl;dr: rent control is not the evil we thought it was. It can be a useful policy tool alongside other housing policies.

Shazbot , 10 months ago

There’s also an underlying layer to this problem with a specific type of home owner: the foreign investor. These individuals use American properties to hide their wealth from their home countries. Tax evasion, high ROI, and increased scarcity in every purchase. Homes often go months and years without occupancy, sometimes with minimal furnishings so as not to appear vacant.

I’m not saying foreigners shouldn’t buy homes in America. However, if they do buy a home they should be required to occupy each individual property for a minimum of 6-9 months every year. Otherwise, a heavy tax that exceeds the property’s/ies annual appreciation to encourage occupancy or selling would be ideal.

andrewta , 10 months ago

Which sounds nice, but how do we prove they are or are not actually living there?

Muddobbers , 10 months ago

Utility usage? Pull up the last 6 months of, like, water use (since you need to have water so it’s a solid metric).

Stumblinbear , 10 months ago

I mean, if they lie about their primary residency, that’s a whole set of legal problems they’ve got themselves in

andrewta , 10 months ago

Technically true but want to guess how many realtors buy a house , homestead the place for a couple of years then sell it?

Hint: the number is a lot higher then people might think.

There are a lot of ways to get around problems just by thinking outside of the box. Might it slow down the problem? Maybe.

Stumblinbear , 10 months ago

So they’re buying a new house every few years and selling the old one? If they have only one house at a time, I don’t really care much. The issue is when billion dollar corporations buy up single family homes to rent out, not an individual buying a house to live in and sell it in a few years

reallynotnick , 10 months ago

Even if they lie requiring X months would at least put a cap on how many they could own since there are only 12 months in the year.

Stumblinbear , 10 months ago

Iirc primary residency is already living in a single home more than 6 months out of a year, or where you lived the majority of the time

reallynotnick , 10 months ago

True I guess I was reading more into the original comment on taxing more than appreciation and such. I know there are tax benefits to primary residence already, which maybe covers their original idea, but I figured it would be even higher taxes for foreigners for non-primary residence or something was what they were suggesting.

willeypete23 , 10 months ago

Georgia had this problem decades ago and fixed it by lowering adverse possession requirements down to 13 months of occupation. It’s back to over a decade now but I liked that approach.

SheeEttin , 10 months ago

I’m not really worried about commercial landlords. Most of them are okay. A few are great, a few are slumlords.

What I’d really like to see is more and denser housing being built, period. And investment in infrastructure like public transit so that places are more accessible, more livable.

Bardfinn , 10 months ago

Lmao you really believe all that shit? 😂🤣🤣

honey_im_meat_grinding , 10 months ago (edited 10 months ago)

My understanding is that rent control backfired pretty spectacularly in the long term.

There are critiques against rent control that have persisted for decades that are now seeing a growing body of counter-evidence that it maybe isn’t that bad after all. Hence the resurgence of rent control being suggested as a policy tool. It makes sense that the myth that rent control is bad has persisted for so long - high earning economists (yes, they’re very high earners) who are thus more likely to own rental units have an incentive to publish research showing that policies that harm their rental income are bad, and have less incentive to publish research that shows policies like these benefit the renter over the landlord.

Here’s a great article by J. W. Mason, who has a PhD in economics, who goes over more recent research around rent control. He shows that it’s far more nuanced and less clearly “bad” than right wing economists have been trying to push us to believe.

jwmason.org/…/considerations-on-rent-control/

circuitfarmer , 10 months ago

This better matches my understanding than OP’s take. It’s not necessarily that certain folks were being disingenuous (though of course with financial matters that’s also common), but more so that rent control is designed to help people closer to the bottom of the financial ladder, and those people are also disenfranchised in other ways, including their results bring unreported or thrown under the rug.

The difference now is that the housing system is so screwed and skewed overall, rent control would likely benefit far more folks than those at the absolute bottom of the financial ladder – that, or the wealth gap is just so large that there’s a huge number of people at the bottom, all roughly equivalent to each other given how rich the rich have become.

honey_im_meat_grinding , 10 months ago

test

tal , 10 months ago

My understanding is that rent control backfired pretty spectacularly in the long term.

Yeah, the basic problem with rent control is that it creates the opposite long-term incentive from what you want.

Rentable housing is like any other good -- it costs more when the supply is constrained relative to demand, costs less when supply is abundant relative to demand.

If rent is high, what you want is to see more housing built.

What rent control does is to cut the return on rents, which makes it less desirable to buy property to rent, which makes it less desirable to build property, which constrains the supply of housing, which exacerbates the original problem of not having as much housing as one would want in the market.

I would not advocate for it myself, but if someone is a big fan of subsidizing housing the poor, what they realistically want is to subsidize housing for the poor out of taxes or something. They don't want to disincentivize purchase of housing for rent, which is what rent control does.

SCB , 10 months ago

If you subsidize housing you create increased demand for housing, ultimately leading to rent going up for all.

Zoning reform is the solution. Cities are no place for single-family exclusionary zoning and height limits on housing

tal , 10 months ago (edited 10 months ago)

If you subsidize housing you create increased demand for housing, ultimately leading to rent going up for all.

So, as I said, I'm not an advocate of subsidizing housing out of taxes. I'm just saying that people who are arguing for rent control are arguing for a policy that tends to exacerbate the problem in the long run.

Subsidizing housing doesn't normally run into that, because it's normally possible to build more housing.

It is true that that's not always the case, and one very real way in which that can not be the case is where there have been restrictions placed on constructing more housing. If housing prices are high, the first thing I would look at is "why can't developers build more housing, and are there regulatory restrictions preventing them from doing so". It is quite common to place height restrictions on new constructions, which prevents developers from building property to meet that demand, which drives up housing prices (and rents). In London, there are restrictions placed that disallow building upwards such that a building would be in line-of-sight between several landmarks. That restricts construction in London and makes housing prices artificially rise. Getting planning permission may also be a bottleneck. I agree with you that that sort of thing is the thing that I would tend to look at first as well: removing restrictions on housing construction is the preferable way to solve a housing problem.

I remember an article from Edward Glaeser some time back talking about how much restrictions on construction -- he particularly objected to the expanding number of protected older, short buildings -- have led to cost of housing going up.

How Skyscrapers Can Save the City

Besides making cities more affordable and architecturally interesting, tall buildings are greener than sprawl, and they foster social capital and creativity. Yet some urban planners and preservationists seem to have a misplaced fear of heights that yields damaging restrictions on how tall a building can be. From New York to Paris to Mumbai, there’s a powerful case for building up, not out.

By Edward Glaeser

It looks like it's paywalled, so here:

https://archive.is/jRQIm

SCB , 10 months ago

Ah if you meant subsidizing housing construction I’m 100% with you

HobbitFoot , 10 months ago

Part of the problem with rent control is that it doesn’t subsidize the building of new housing. The times in which housing prices dropped in the USA were typically when a government either opened up land to development, subsidized the building of housing, or built the housing themselves.

hark , 10 months ago

Where’s all this housing being built as a result of sky-high rents? If they are being built, they’re being snatched up immediately by “investor” parasites.

SheeEttin , 10 months ago

New construction is happening. Just not as fast as we need it. And the cost of materials isn’t helping.

afraid_of_zombies , 10 months ago

What are you referring to? I don’t see all this new housing being built. I only know about three active sites in my city. I also know that our local zoning board has been rejecting applications because of neighborhood character.

I would run to serve but it’s an appointed position. Which yeah not great.

delicious_tvarog , 10 months ago

I also know that our local zoning board has been rejecting applications because of neighborhood character.

Sounds like you already know what one of the biggest issues is.

It’s so bad in California that the state legislature has been passing laws directly addressing city zoning boards that won’t approve housing.

Canyon201 , 10 months ago

No thanks to that, hustle more, spend less, invest smart and you can get a house easy!

BeeAteTeenSeaWon , 10 months ago

So you’re saying I need to pull myself up by my bootstraps?

koro , 10 months ago

Ok boomer. “Fuck you, got mine” am I right?

Hextic , 10 months ago

How about we just TAKE your shit, fuck you?

rjs001 , 10 months ago

They obviously think stealing is okay as they defend landleeches so it ought to be tried

gargantuanprism , 10 months ago

I feel like you might have forgotten the /s

RubberElectrons , 10 months ago

Point is, you only have so long to live. Why do we all have to hustle, day in and day out? That’s not the point of existence, at least I refuse to believe so.

cassetti , 10 months ago

Pretty sure you forgot the /s

Remember, sarcasm doesn't translate well on the internet.

rjs001 , 10 months ago

Be quite if you are going to spout such noise

Hextic , 10 months ago

Either they fix the rents or we start eating the landlords. Either fucking way we are gonna eat.

md5crypto , 10 months ago

I heard landlord tastes like pork. Long pig…

RubberElectrons , 10 months ago

Word. What’s the saying, “a revolution is only 3 missed meals away”?

MasterObee , 10 months ago

I love that phrase because it’s so true.

MasterObee , 10 months ago

It’s not landlords faults that governments have insane restrictions on building houses. Why the hate towards them?

RubberElectrons , 10 months ago

Why’s my rent gotta go up every year, in spite of no actual improvements to my home or the facilities? Why is there a convenience fee for paying my rent online?

They continue to take advantage of demand beyond what’s considered fair, whether the demand is due to govt policy or not. That’s why landlords get so much hate.

MasterObee , 10 months ago

Why’s my rent gotta go up every year, in spite of no actual improvements to my home or the facilities?

Interest rates increasing, property taxes increasing, market rate going up, materials to provide improvements and maintenance increasing, inflation.

RubberElectrons , 10 months ago

Not itemized, made clear to tenants, or asked for. Lack of transparency hurts all those valid points, and we’ve all, all, had bad landlords at some point.

Only quality legislation has protected me the few times I’ve had to tangle, anecdotally.

MasterObee , 10 months ago

Not itemized, made clear to tenants, or asked for. Lack of transparency hurts all those valid points,

Why does that matter? Is your local grocery store transparent about the cost of chicken? No, because nobody is forcing you to pay for it. You pay for a service at an agreed upon price, if you don’t want it don’t buy it.

all, had bad landlords at some point.

I personally haven’t, the worse landlords I’ve had were at an upscale apartment complex that got mad because I hung an American flag. Once again, it’s up to you if you want to pay for the service provided by said landlord. Just like if you pay a plumber and they’re mean to you, you probably won’t go to them next time.

afraid_of_zombies , 10 months ago

The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread

afraid_of_zombies , 10 months ago

Property taxes went down where I live thanks to federal covid money.

MasterObee , 10 months ago

How did federal covid money cause property taxes to go down?

afraid_of_zombies , 10 months ago

We got a bunch of money and decided to spend it that way. A small reduction on taxes for a while

afraid_of_zombies , 10 months ago

I agree zoning sucks but so does my landlord. He inherited 17 houses and has never worked, every time I ask for something to be fixed he hires someone else out to do it, at one point he was saving up all my checks so I had to switch to money orders, he tried hitting on my wife, and he talks to me like I am not his fucking customer who pays for his mother fucking stable.

So fuck him and everyone like him. Inherited everything while the rest of us have to work.

MasterObee , 10 months ago

He inherited 17 houses and has never worked

Why is that relevant?

every time I ask for something to be fixed he hires someone else out to do it

So he sucks because he gets a professional to help fix problems you have? That’s what a landlord is supposed to do…

at one point he was saving up all my checks so I had to switch to money orders

You still paid rent with checks?

everyone like him

I agree, he sounds sleezy, but just because you have a bad landlord doesn’t make all landlords bad.

Inherited everything while the rest of us have to work.

See, this is somewhere you and I differ completely. You hate someone because they have something you don’t, I put 0 weight on it. Why should I hate someone for getting a gift from a relative or friend? Why should I hate someone because they’re blessed differently than I?

afraid_of_zombies , 10 months ago

If you don’t see any issue with someone being a sleezy piece of shit who inherited more wealth than the average person makes in a lifetime I am not sure what to tell you. Except to remind you that: The corporate overloads are going to sell you down the river the moment you are no longer useful to them.

MasterObee , 10 months ago

If you don’t see any issue with someone being a sleezy piece of shit who inherited more wealth than the average person makes in a lifetime I am not sure what to tell you.

Well you’ve already shown your bias against anyone who has inherited anything.

The corporate overloads are going to sell you down the river the moment you are no longer useful to them.

Okay? How am i useful to them at all? What’s that have to do with not hating an individual because he got a gift from a relative?

rjs001 , 10 months ago

Mao was right about the landleeches

twistypencil , 10 months ago

Time to organize

NathanielThomas , 10 months ago

Rent is inherently predatory and exploitative because it’s usually a commodity in a scarce housing market where the landowners can charge prices that generate a large profit margin over what it cost them. For example, a person who pays $1,500 a month to the bank for mortgage may be able to rent that out at twice the price, and usually to people who are economically insecure.

MasterObee , 10 months ago

Rent is inherently predatory

No it’s not. Just because you don’t like it doesn’t mean it’s inherently predatory.

I have to move to a city for 6 months, should I have to buy a house and sell it during that time? I need to rent, it gives me the flexibility without having to shell out capital or get in debt to live.

As with everything, it can be bad, especially when the government restricts building of houses so much, but my buddy buying a house, fixing it up and renting it out isn’t malicious.

What’s your alternative to renting? Government owns all houses and gives them out for people to live in for free?

NathanielThomas , 10 months ago

Having social housing or low-cost rental housing owned by the government with an option to purchase does not sound at all bad. My partner lived in England and her nan was in council housing. When she died my partner had an option to buy but didn’t. That house is in one of the most coveted locations in the city now.

MasterObee , 10 months ago

Having social housing or low-cost rental housing owned by the government with an option to purchase does not sound at all bad.

We have social housing for low income people, is that not enough? Do we just need more? How much more?

en.wikipedia.org/…/Subsidized_housing_in_the_Unit…

Have you heard of the term the ‘projects’ - it’s provided housing, but many of the subsidized housing areas are more like a 3rd world country than our prosperous 1st world country. Is this the policy you’d like more of?

abbotsbury , 10 months ago

I would rather pay the cost of service to the government than my landlord’s mortgage

MasterObee , 10 months ago

I would rather pay the cost of service to the government than my landlord’s mortgage

So you want housing as government controlled? How much? 100%? 80%? 50%? How much private residential property should be stolen by the government to achieve what you want.

abbotsbury , 10 months ago

How much private residential property should be stolen by the government to achieve what you want.

wow is that the best strawman you could come up with? Public housing shouldn’t exist because checks notes it is literally impossible to achieve without stealing existing homes? That’s how you’re gonna present your initial argument? Be better sporto

Morcyphr , 10 months ago

Just curious, why? What difference would it make for you? Many of these mortgages are government funded anyway. I don’t rent anymore but my government is far more inept and corrupt than any landlord I’ve ever dealt with. Just my experience though.

abbotsbury , 10 months ago

What difference would it make for you?

Well, paying an at-cost price would mean it is inherently cheaper as the government wouldn’t be trying to turn a profit, merely charge an amount that compensates for upkeep.

Many of these mortgages are government funded anyway.

But is still building equity for a private individual.

my government is far more inept and corrupt than any landlord I’ve ever dealt with

I have a say in my government though, at least theoretically. I think housing (at least primary housing) shouldn’t be a for-profit industry, so I advocate against it via my government.

Morcyphr , 10 months ago

the government wouldn’t be trying to turn a profit

lol.

But is still building equity for a private individual.

With risk attached, yes.

I think housing (at least primary housing) shouldn’t be a for-profit industry

Agreed. Nor should food, water, electricity, health services, etc. but here we are.

dfc09 , 10 months ago

My biggest head scratcher now that I’ve bought a house is “huh, my mortgage is locked in now, no matter what the market does… Why did rent keep going up if my landlord’s mortgages were locked in?”

I honestly don’t have a good answer, I could be looking at something perfectly explainable. But to me it seemed like they raised rent not because costs went up, but because they could. Why not. Everybody else is doing it.

MasterObee , 10 months ago

My biggest head scratcher now that I’ve bought a house is “huh, my mortgage is locked in now, no matter what the market does… Why did rent keep going up if my landlord’s mortgages were locked in?”

Property taxes, market rate, costs to repair and maintain, interest rates increasing. How much money, beyond your mortgage, have you spend on your house since you moved in?

dfc09 , 10 months ago

Less than my apartment ever was 😜

And what’s especially nice is everything I buy and repair goes to me, belongs to me.

Sure I had to buy a washer and dryer, lawn mower, more furniture, etc, but that’s all mine forever.

The only cost that’s higher at my house than my much smaller apartment is utilities.

MasterObee , 10 months ago

Less than my apartment ever was 😜

How much?

dfc09 , 10 months ago

A few hundred a month less. I’m not suddenly drowning in money, obviously, but it’s interesting paying less for much more, and that money actually benefitting my net worth vs being flushed down the toilet

MasterObee , 10 months ago

See, you can’t even answer a simple question.

You weren’t actually asking questions to gain knowledge, you just want to hide the facts so it looks like you’re right. Home ownership is expensive, and for most people, isn’t ideal, renting is a huge need on our society so I don’t have to give up 50k cash right now, so I don’t have to pay 15k/yr in property taxes, a 20k water heater bill randomly and I can move next money if I want to. You being willingly ignorant to those don’t change the facts.

Morcyphr , 10 months ago

Mortgages are locked in. Taxes, insurance, utilities, maintenance/upkeep are not. All of those things have increased since I bought my house a year ago. Rental properties experience the same thing.

afraid_of_zombies , 10 months ago

My landlord’s taxes went down, I pay for utilities, not sure about insurance, as for upkeep I will let you know when I see that happening.

Morcyphr , 10 months ago

Property taxes went down? I doubt that. As far as upkeep, if the furnace goes out, who pays for that? The property owner. That’s what I meant.

afraid_of_zombies , 10 months ago

We got federal money for Covid and the commerical sector is doing well. Pretty sure the furnace is fine, but it isn’t like I have lived here for multiple years.

rjs001 , 10 months ago

Uhh, yes it is malicious and that would make your buddy a social leech

Wrench , 10 months ago

That’s not really reflective of the market in reality. Rent in a competitive market (I.E. anywhere people want to live) tends to hover around the cost to own, buying with 20% down, plus property tax and mandatory homeowners insurance required by the mortgage holder.

In fact, usually it’s cheaper to rent than it is to buy with only 20% down and good credit.

This is because people do this calculation, come to the conclusion “it will cost us a little more, but we get to own our dwelling, our payments eventually go to principal (though this is rigged by the banks too), and hopefully the market goes up and we get equity”

Yes, the market fluctuates, particularly in economic crisis. But it teeters back and forth based on the costs to buy and rent. Because if rent exceeds the cost to buy, investors snap up property just to rent it out, and that raises demand on real estate to the cost goes up.

NathanielThomas , 10 months ago

I feel like this argument falls flat in the current bubble market where you can triple your housing investment in five years. I bought my condo in 2017 for $360,000 and today it’s worth $550,000. Even with property taxes, renovations, insurance, etc etc, I have made a killing on buying this property.

Your argument might make sense in a recessionary market like the 2008 subprime meltdown.

Wrench , 10 months ago

Your use case reflects what I said exactly.

For someone to buy your condo today, they will be signing up for a mortgage whose monthly cost is near the going rent price. And most likely, more than the going rent price.

If they were to just buy and rent it out, they will likely be doing so at a loss.

The market going up or down after the purchase of the property is independent. It may go up, it may go down. That’s the gamble you make if you’re doing it as an investment.

Your experience happened to take place at an extraordinarily good time to already own property., and FOMO was certainly fueling the frenzy during the peak.

Whether that continues to be the case is unknown. Economists are all over the map.

aesthelete , 10 months ago

It made you more rich on paper, but the reality is that you aren’t in the same boat as landlords. The reason is that if you live in your property in order to realize the profit on it you’ll have to sell it and move somewhere less expensive (i.e. somewhere likely less desirable).

Prices in real estate going up only really benefits real estate tycoons, the local government (depending upon location), and other side players in the market (e.g. real estate agents). For the rest of us, if you sell it just means that you have to turn around and buy in a more expensive market. Also (depending upon location, California properties aren’t completely re-assessed for taxes until they change hands) it hikes your taxes.

As a single property owner in California, I’m rooting for prices to drop so I can upgrade and still pay the same amount of taxes (or less).

I wouldn’t bet on it happening though.

aesthelete , 10 months ago

The rates going up as fast as they have when prices are still high have killed buying as an alternative to renting in my city.

I feel for people who weren’t “smart enough” to buy during the pandemic, because unless prices, rates, or both drop dramatically, it looks like they may have been permanently priced out of buying and renting is only getting less affordable.

Wrench , 10 months ago

I agree. It sucks all around right now for anyone on the market to rent or buy. We’re all squeezed. Only people that had the luxury of owning and/or capital and foresight to invest are happy right now.

The wealth divide has only increased substantially.

But that doesn’t mean that rent is “predatory” except in the cases of long time owners hiking rates when their costs have stayed the same. The reality is that rent is closely related to the current cost of buying at any given time.

aesthelete , 10 months ago

But that doesn’t mean that rent is “predatory” except in the cases of long time owners hiking rates when their costs have stayed the same. The reality is that rent is closely related to the current cost of buying at any given time.

Not all landlords are predatory maybe, but at least in this city the overwhelming majority of them are. They’re also like a half dozen corporations that hold most of the apartment buildings. They raise their rates dramatically like clockwork even though I’m in California and we have Prop 13 which holds their tax raises to very low percentage increases yearly.

I would say that for the most part, yes, it has a relationship to what it would cost to buy the same property…but it’s location dependent. You can’t (for the most part) buy an apartment here. It’s almost certainly the case (I’m only not 100% sure because a lot of the apartment complex holding companies are private) that they have low rate mortgages or no mortgages at all on the buildings, and they charge more and more as time goes forward despite their costs not really increasing.

We’re entering a neo-feudalistic economy and while yes, again, there’s some relation to the cost…a lot of it is just straight up greed.

Potatos_are_not_friends , 10 months ago

2015 - rent was $1200

2017 - rent was $1600.

2021 - rent was $2100 average. I was paying $2400.

2023 - rent was $2500 average. I’m paying nearly $3000.

These are all two bedroom, two bathroom apartments in the same city.

I’ve asked college age tenants who lived here how they can do it. They split it with roommates (2bd/2bath - like four ppl living there)

SCB , 10 months ago

Your city badly needs zoning reform, not to exacerbate this problem with rent control (further stifling new building)

nbailey , 10 months ago

My city has been even more dramatic.

2016 - $680

2022 - $2200

Over 300% increase in six years.

Morcyphr , 10 months ago

That’s crazy. I’m in a decent sized city and the average rent for a 2/2 is ~$1800. Hell my mortgage is less than $3k/month.

june , 10 months ago

My PITI for my mortgage is $3350/month. Mortgage is $28xx something. It’ll be nice whenever I can get that mortgage insurance off. I was renting an admittedly very nice 2 bed 2 bath apartment for the same before I bought. Now I have a 3x2 1000sqft rambler and know that, while the mortgage is high, it will be lower than rent in the next 5 years.

tallwookie , 10 months ago

that many people in the house has to be breaking fire code…

sausagemeatus , 10 months ago

I think all leases should be month-to-month. Making it easier to move would help renters shop around, move if their landlord is shit, move if their neighbors are shit, move if they get a new job, etc.

MasterObee , 10 months ago

That would just cause rents to go up because landlords wouldn’t have the security of the contract. You want rents to be even higher than they are now?

MasterObee , 10 months ago

Rents are out of control, especially in big cities, but come on. Rent control, by all measures and by all historical policies, are terrible.

Supervisor194 , 10 months ago

We don’t need rent control. We need them to stop allowing single family dwellings to be owned by huge conglomerates, and particularly foreign interests. It’s insanity.

MasterObee , 10 months ago

I don’t know enough about corporate and foreign home ownership, is it that big of a problem?

What I do know, is government preventing building houses is causing a housing shortage.

SheeEttin , 10 months ago

Yes, lack of housing is the bigger issue. Here in the Boston area, it’s pure supply and demand. Neighborhoods are full of triple-deckers just off the city center that could be denser apartment buildings. Landlords can charge whatever they want, because they know that anyone who wants to live in the area will have a hard time finding another place.

There’s also the question of transit infrastructure. Even with less dense housing, if there were easy ways to get around other than cars, proximity would be less of an issue.

MasterObee , 10 months ago

because they know that anyone who wants to live in the area will have a hard time finding another place.

I mean, you’re just saying supply and demand still. They’re charging that because that’s what someone is willing to pay.

Even with less dense housing, if there were easy ways to get around other than cars, proximity would be less of an issue.

Agreed, the U.S. as a whole has had incredible incompetence with government officials regarding public transit. If we had reliable train and bus systems, we’d be in a much better position.

Supervisor194 , 10 months ago (edited 10 months ago)

Investors buy on the order of 25% of all residential real estate available. Big money uses its leverage to do this in order to raise the prices (due to the scarcity that they are helping create), which they then use to drive up rents or flip properties at a profit. This cycle has been on repeat for several years now. This is why you see people doubling and tripling up living together and it won’t stop until they can’t do it anymore or our legislators decide to do something about it which I don’t even know why I bother saying it like there’s any chance they will.

Foreign ownership of US property is certainly a significant percentage of that equation, but there are other reasons why its important to pay better attention to foreign ownership. Allowing foreign interests unrestricted access to property in the States ends up giving us stupidity like Saudi Arabia feeding its cattle alfalfa grown in Arizona. One of the most water-intensive crops in existence that its own government won’t allow it to grow itself, is grown instead in our desert, while our own citizens get their water cut off.

Edit: it may technically be “supply and demand” when 25% of everything available is bought with the intention of making a profit on it rather than providing a place to live - but it isn’t beneficial to the citizens of this country when the whole world and all its big business interests can compete with individuals to buy housing.

hark , 10 months ago

Terrible for who?

dude187 , 10 months ago

Everyone

infyrin , 10 months ago

Especially if the conditions and the shit neighbors haven’t improved. It’s totally not worth warranting to pay that much.

My rent has thankfully only jumped $20, according to the new lease. But I predict it’ll jump further in the future.

The problem is in the line - corporate landlords. Both foreign and domestic.

ryathal , 10 months ago

It’s also partially pricing in the risk of another eviction moratorium. It’s still recent enough in landlord’s that the government could take away their recourse for non-payment.

Bluehood380 , 10 months ago

More than 30 U.S. economists have signed a letter expressing support for strong federal tenant protections and rent control as housing costs remain sky-high, even amid broadly cooling inflation.

The economists note in their letter, released Thursday, that the median rent in the U.S. “has surpassed $2,000 for the first time, and there is not a single state where a worker earning a full-time minimum wage salary can afford a modest two-bedroom apartment.”

“We have seen corporate landlords—who own a larger share of the rental market than ever before—use inflation as an excuse to hike rents and reap excess profits beyond what should be considered fair and reasonable,” the letter continues. “Renters are struggling as a result.”

The letter’s signatories—including Mark Paul of Rutgers University, James K. Galbraith of the University of Texas at Austin, and Isabella Weber of the University of Massachusetts Amherst—call on the Federal Housing Finance Agency (FHFA) to require rent regulations as a condition for federally-backed mortgages and reject the “economics 101 model that predicts rent regulations will have negative effects on the housing sector,” likening it to typical arguments against raising the minimum wage.

“Empirical research on local rent control policies in San Francisco, CA and New York, NY found that rent regulations lower housing costs for households living in regulated units,” the economists wrote. “In Cambridge, MA, empirical research showed that the repeal of rent stabilization laws resulted in an average rent increase of $131 for tenants.”

Given that “Fannie Mae and Freddie Mac mortgages on the secondary market support nearly half of rental units in the U.S.,” they argued, “Government Sponsored Entities (GSEs) have the influence needed to meaningfully change the trajectory of the housing crisis.”

The economists’ letter is part of a broader push by tenant rights groups and housing justice organizations to secure federal protections against egregious rent hikes and wrongful evictions.

Earlier this week, 17 U.S. senators wrote in a letter to the FHFA that “renters also have too few protections, making them vulnerable to steep rent increases and deteriorating housing conditions—factors that are out of their control.”

“Tenant protections vary drastically from state to state and even sometimes from county to county, often leaving renters without recourse,” the senators added. “There have been repeated reports of investors using low-cost financing from Enterprise-backed loans to buy properties and then sharply raising rents, mistreating tenants, and allowing buildings to fall into disrepair.”

More than 140 academics, over 70 climate researchers, and dozens of local elected officials have also joined the call for nationwide rent regulations.

Tara Raghuveer, director of the Homes Guarantee campaign at People’s Action, said in a statement Thursday that “tenants are coming for rent regulations, and everyone from senators to economists agree: tenant protections are common sense.”

“Due to lack of regulation, affordable housing is lost quicker than it can be built,” said Raghuveer. “Corporate landlords call the shots with federal financing through Fannie Mae and Freddie Mac. That’s why tenants spent this summer organizing to win what we need: federal tenant protections like caps on annual rent increases.”

In late May, the FHFA issued a request for public input on tenant protections at multifamily properties with mortgages backed by GSEs.

Tenants with the Homes Guarantee campaign responded by knocking on more than 4,000 doors at GSE-backed properties and organizing more than 2,000 comments in support of tenant protections and rent regulations.

“The system as we know it today has failed everyday people, many of whom make impossible choices between rent and food, their homes or their medications,” said Raghuveer. “The status quo is not working for the people, it is only working for the profiteers, and it is time for change. It is time for the federal government to make changes to that system, to correct the imbalance of power between landlords and tenants, to protect tenants, and to stabilize the American economy.”

prole , 10 months ago

“We have seen corporate landlords—who own a larger share of the rental market than ever before—use inflation as an excuse to hike rents and reap excess profits beyond what should be considered fair and reasonable,” the letter continues. “Renters are struggling as a result.”

Literal rent-seeking.

FlyingSquid , 10 months ago

There is no way the corporate-loving leaders of our country will agree to this, but I wish them luck anyway.

ScornForSega , 10 months ago

There’s a supply shortage.

You can’t sprawl your way out of this problem, despite Texas’ best efforts. All you do there is create traffic.

The answer is simple. Legalize housing. More triplexes, more quadplexes, more ADUs, 5 over 1s, more of everything. Developers want to fill this demand. They can’t. They’re hamstrung by city ordnances and state laws that often only allow apartments or single family housing. Not everyone wants or needs a separate house. Make rent boring again and the corporations will lose interest.

jonkenator , 10 months ago

Exactly! We need the missing middle housing.

Morcyphr , 10 months ago

more ADUs

This. I own my home and could probably fit at least two ADUs on my property but the permitting fees alone exceed the cost of construction. Not to mention the cost and hassle of obtaining a permit.

Raiderkev , 10 months ago

Eh, I mean there is a record number of vacant homes at the moment. The investor class owns a fuck load of housing that could be actually be used to ya know, house people. I’d bet If a large tax was placed on 2nd homes /income property, there’d be no supply shortage. So many people bought homes for AirBNB, and rent seeking in the last decade that in years past would be being bought by families. I know in my town they’ve been putting up high rise after high rise. Rent still goes up because of (imo) artificial scarcity. Landlords are using software to fix price on rent, banks intentionally trickle out foreclosures to not flood the market, companies with vacant units are not allowed to drop price of rent and keep pricing high because of financing agreements made when the building was built. Most of the luxury apartments that have been built are maybe 30% full. No one wants to live in a duplex/ triplex /multiplex. People want houses, and there are none because companies like Blackstone backed Invitation homes and Chinese companies/ citizens buy them all to rent seek.

The ripple effect from these rate hikes might help drop rents because a lot of commercial loans are ARMs, and when that rate adjusts, landlords are going to feel pain, but they may just pass it on to their tenants and make housing affordability even worse. We’ve allowed too many people to commodify what was once viewed as a necessity, and the single family home is now an investment vehicle for big business.

The real estate market as a whole feels like a giant game of hot potato at the moment. Something has got to give. The America of today is so much worse than the one I grew up in as a result of all the BS we’ve allowed the investor class to do. It needs to get reigned in somehow because imo the American dream is dead as a result.

AProfessional , 10 months ago

A vacant home doesn’t mean affordable or accessible. Single family homes are stupidly inefficient and expensive or in middle of nowhere. Dense cities are the only solution.

nednobbins , 10 months ago

there is a record number of vacant homes at the moment.

We’re currently close to the record for all time lowest vacancy rates. We’re at 6.3%. The highest (over the past 70 years) was in 2009, at 11.1%. It got down as far as 5% a few times. I downloaded the raw data and it says the average is 7.28%

fred.stlouisfed.org/series/RRVRUSQ156N

There’s a popular image of a bunch of Scrooge McDucks sitting on giant inventories of housing but the evidence doesn’t support that. Someone saying, “I saw a bunch of empty houses.” is exactly as logical an argument as a climate denier saying, “It’s been cold all week.” That’s just an anecdote.

The data is very clear on the matter. We don’t have enough housing.

gowan , 10 months ago

Vacant does not always mean available.

nednobbins , 10 months ago

The core problem, which causes that shortage, is that we have conflicting views on what housing is for.

On one hand, we want housing to be a right. On the other hand we want our houses to be good investments.

Those are conflicting goals. We need to pick one and be ready to sacrifice the other.

If you want your house to be a good investment, it needs to appreciate in value at a rate higher than inflation. The only way for that to happen is if housing keeps getting more expensive on a real money basis. That’s a fancy way of saying that housing will be a bigger and bigger chunk of income.

Every single policy that reduces the cost of housing also degrades its effectiveness as an investment. If people can get housing any time they want, they have no incentive to pay somebody a bunch of money to someone hoping to fund their retirement by downsizing.

Your suggesting to legalize more housing will destroy the ability of homeowners to make a profit off their homes. Even though I stand to earn huge amounts of money from the appreciation of my own house I would support that, but I’m afraid I’m in the minority. The US has a 65.9% home ownership rate and for most people their home is their single biggest asset. If we address the housing shortage those people will all see their single biggest investment asset drop in value.

the_post_of_tom_joad , 10 months ago

On the other hand we want our houses to be good investments.

I don’t.

I understand you’re speaking in general terms here but no, i think having housing being tied to investments at all is a terrible idea we’ve just normalized.

The flip side of course we’ve experienced, like 2008 when the market went sour, putting people out of home and destroying retirement funds

nednobbins , 10 months ago

I don’t think it’s a good idea either but we live in a society that effectively decided that we do want houses to be investments decades ago. That’s entrenched now and many people bet their life savings on the promise that their house would be a good investment.

If we change that without taking those people into account they’re all screwed. While some rich people would get screwed in that process a whole lot of poor people would get screwed too.

roboticide , 10 months ago

I mean, boo hoo?

I bought a house, not because I wanted an investment, but I wanted a place to live. Fuck the CCP, but man were they on the money saying “Houses are for living in,” their current, ironic, housing bubble aside. Houses are homes. You want an investment vehicle, buy stocks or bonds.

If the people who see housing as an investment are outweighed by the people who simply want an affordable home as a right, it’s become an unsustainable and unjust privilege and needs to be rectified.

Also, I think this ignores the larger factors of: poor zoning due to NIMBY-friendly policies at the local level, and corporate greed as companies, not people, buy up supply. Solve these two problems and we don’t have to pick between housing as a right and housing as an investment.

nednobbins , 10 months ago

The problem with this plan is that it assumes that we’re only hurting some cigar puffing Wall Street fat cats but, in reality, the pain would be felt much more broadly.

In the US, the majority of people own the home they live in. propertyshark.com/…/us-homeownership-rates-by-sta… Those aren’t big corporation or greedy landlords, they’re 50+ percent of the population of each state. Some of those people are billionaires and many of them have below median income. visualcapitalist.com/chart-assets-make-wealth/

Those super wealthy people that we’re happy to throw under the bus don’t have their wealth tied up in their homes. Their real estate investments tend to be small fractions of their portfolios. The ones that would get hit the hardest are the ones with less than $100k. I’m glad that you’re in a position where you can survive a large financial loss on your house but a lot of people don’t have that luxury.

Any plan that just kills their investments without some way to take care of those people will create a disaster. Maybe we could bump up Social Security somehow? That would involve significant tax increases but it could plug the gap.

Huge swaths of our economy are set up to assume that houses are financial assets. NIMBY policies are largely about maintaining or increasing the financial value of the real estate. The corporations buying up all the housing are kind of a red herring. The US has one of the highest owner occupancy rates in the world. There has been a slight (about 1.6%) in non-own occupied housing and only a fraction of those 1.6% are corporations. So it’s technically true that corporations hold more residential real estate but they hold so little of it that it’s unlikely to be a primary factor in home pricing or availability.

As I said elsewhere, the data is very clear on the matter. We don’t have a lot of empty housing inventory being horded by greedy investors. By any reasonable measure, we have a housing shortage.

psycho_driver , 10 months ago

As someone who worked on multi family property development for fifteen years–for the love of God, force the developers to build to a standard. Simply requiring that the landlords pay all utilities would go a long way toward this, since it would incentavise building a better structure.

willeypete23 , 10 months ago

We should make owning residential, single family real estate for commercial purposes illegal. You own it, you live in it, don’t live in it, don’t own it. That would make gobbling up houses and renting them out unprofitable and force cities to open up multifamily development

nednobbins , 10 months ago

That sounds nice in theory but what happens when you want to sell your house?

The only potential buyers would be people who either currently rent or are ready to sell their old house as soon as they buy yours.

What if someone wants to fix it up first? Nope, they can’t do it. It will cut out the flippers but we’ve also just cut out all the renovators and restorers.

We could do something like this (and it may not be a terrible idea) but there will definitely be a cost. If we add that law, all the people who currently own homes (that includes both investors and owner occupiers) will see the value of their real estate holdings drop. In the US, over 65% of people own their homes and for most of them, their home is their single biggest asset. Richer people can diversify more so while this law wouldn’t hurt the 35% who don’t currently own homes, it will disproportionately affect the poorer end of the 65% homeowners (who have proportionately more of their savings tied up in their home).

If we don’t also address that problem at the same time we’ll create a cohort of people who can’t afford to retire because we killed their plan of downsizing when their kids move out and living off the difference.

CaptObvious , 10 months ago

The only potential buyers would be people who either currently rent or are ready to sell their old house as soon as they buy yours.

What if someone wants to fix it up first? Nope, they can’t do it. It will cut out the flippers but we’ve also just cut out all the renovators and restorers.

Not at all. They can buy and renovate all they want. They just have to sell it afterwards rather than rent it out.

hellishharlot , 10 months ago

Then you end up with a lot of properties on the market for millions while no one lives in them.

CaptObvious , 10 months ago

Fair point. So we cap profit at 10% above purchase price, and hit the renovators with 90% taxes if the home hasn’t sold in, say, six months.

gowan , 10 months ago

What if the market collapses?

CaptObvious , 10 months ago

Then the speculators eat it. This doesn’t make me sad.

nednobbins , 10 months ago

We could. Why would anyone want to make those investments once we’ve cut off all their profit potential?

Investors chase profits. We can cut off their profits but when we do that 2 things happen; some of them just leave the industry and some of them break the law to try to get around the regulations. Almost nobody just eats the loss and continues investing.

CaptObvious , 10 months ago

Exactly.

roboticide , 10 months ago

We didn’t cut off all their profit potential. It’s just limited.

I don’t really see the problem with this hypothetical. Small time flippers are unaffected. 10% or whatever profit is still profit. If it disincentivizes big commercial flippers or investors because they can no longer make “enough” profit, good, that’s the point.

nednobbins , 10 months ago

The problem we see when we try to implement price controls is that they inevitably lead to shortages. The oil caps in the 70s are a famous example but the NYC rent controls were just as bad. The standard practice if you wanted an apartment was to look in the newspaper for open house listings that day. You would show up before the open house starts with at least 1 months rent plus first and last months rent as security deposit, in cash. If you liked the place you signed within the first half hour. If you waited someone else took the apartment.

Part of the challenge is that it’s not as simple as a 10% profit cap. What if someone owns a house for 2 years? Do we cap it at 20% profit? Do we index the allowable profit to inflation and then add a “reasonable” offset? Do we want to allow different profit caps for different renovations? (maybe we don’t want to treat swimming pools and solar panels the same way?) How long do you need to live in a house to consider it owner occupied?

As those regulations get more and more complicated you end up with a ton of loopholes. The more you do that the more profitable regulatory arbitrage becomes as a business model.

In general, tight margins favor large companies over small firms. They can operate at such a large scale where they can thrive off of profit margins that would starve small businesses. That’s the general issue with mega-retailers. They operate on single digit margins. Mom and pop can’t streamline their operations enough to survive on those margins.

Our housing stock needs both growth and maintenance. That comes from investment. If we push the private sector out of those investments without replacing them we’ll just end up with a crumbling housing infrastructure. If we cut large businesses out of it government would likely need to take up the slack. And to be clear that government intervention would need to be massive. The real estate market is huge and if we cut out the private sector we will definitely need to raise taxes, by a large amount, to cover it. That’s not off the table but we should walk into a decision like that with eyes wide open.

cjsolx , 10 months ago

Why would anyone renovate a property if it’s just gonna sit on the market out of reach of potential customers? I would hope that investors would be smarter than that. Like we’re saying, homes should be for living, not for investing. If there’s no pressing need to renovate, then great. Don’t. Whoever wants to buy it as is now can. And if they want to they can renovate what they want at their own pace.

the_post_of_tom_joad , 10 months ago

Like now

gowan , 10 months ago

But if they already own a home they can’t do this because they will own two

CaptObvious , 10 months ago

No one ha said that they can’t own more than one. They just can’t rent one while living in the other. The vacant one stays vacant.

gowan , 10 months ago

What about rental companies? Who can you rent from? If you can only lose money or break even this would destroy any reason to maintain a home.

nednobbins , 10 months ago

I’m assuming OP intends to specifically exclude rental companies. As near as I can tell this plan would also exclude individual renters. Not sure how that would play out if someone wanted to defray the cost of their home by renting out a room or subdividing their home.

afraid_of_zombies , 10 months ago

Do you not maintain the things that you own just because there will never be a day where it is worth 10x what you paid for it?

Btw I really want to meet these flippers and landlords who are maintaining their homes. Every time I have dealt with one they are obsessed with making it look like the house is great, not actually maintaining it. Oh wow you sprayed cookie dough smell before showing it, hey check out that black mold in the basement that stupidly has fucking sheetrock.

ihwip , 10 months ago

This is the most beautiful strawman I’ve ever seen. Well done!

lolcatnip , 10 months ago

I live in a rented house, and I’ve rented out a house I owned because I wanted to move and I was underwater on my mortgage. I get where you’re coming from but I do think there should be exceptions. Maybe just capping the rent at 110% of the mortgage payment or 0.5% of the appraised value would be enough to allow some rentals while discouraging people to buy houses just to rent them out.

4lan , 10 months ago

How about instead of banning it we heavily disincentivize it? After 2 properties you pay 50% in property tax. This allows people to rent out homes to college kids and people saving for a home, without allowing vultures to pick at the bones of the middle class

willeypete23 , 10 months ago

Why don’t we just move into vacant homes? Don’t pay rent or buy, just move in. There’s so many in my area that if I did get caught and kicked out of one I could just go down the street to the next.

Igotz80HDnImWinning , 10 months ago

If a space goes unrented long enough it should be repossessed from the landlord. The law should work both ways. Manifest destiny but for homes.

afraid_of_zombies , 10 months ago

I happen to agree. I am sick of perfect fine forests being torn down for new construction while old buildings stay vacant. Often on the same block.

InternetCitizen2 , 10 months ago

There are rules around this. Its called squatting.

justaveg , 10 months ago

youtu.be/3xZXdXxYBGU

afraid_of_zombies , 10 months ago

Then you get arrested for breaking and entering. We are really good at keeping people out of places not so good at putting them into places.