LogFAQs > #986057463

adjl posted...

Which is why you rent control everything. You don't need to worry about rent control disincentivizing development in one area if every area is equally disincentivized. It's far from impossible to make money off of a development in a rent controlled area, developers just don't make as much. By taking away the opportunity to make extra money elsewhere, they can make do with making slightly less.

This is the most out-of-touch leftist take I've seen since BBT unironically suggested using Soviet style government owned, centrally assigned housing as a solution.

No, it is not possible to build new rent-controlled housing without massive subsidies. Usually, those subsidies come from building an 80-20 mix of market rate and "affordable" housing as part of a new development. An alternative might be the government funding new construction, until you realize that government housing managers are the worst slum lords on the planet. The typical example is the NYC Housing Authority, which is the largest landlord in the city and by far the worst slumlord in the city by every conceivable metric.

adjl posted...

For the sake of short-term stability, yeah, but long-term rent control doesn't solve the core problems of a lack of housing. That, as I alluded, is going to have to involve killing the residential real estate speculation that entails multibillion dollar corporations engineering housing crises for fun and profit, as well as killing the short-term rentals that have resulted in a substantial amount of residential-zoned property evaporating from the housing market. Building more is still necessary, but vacancy rates being as low as they are is not just a matter of a lack of development interest. They're a product of a substantial number of viable homes being held off of the market for the financial gain of the owner.

This is two different takes, the first one another out-of-touch leftist take and the other legitimate. The share of housing units owned by institutional investors is less than 4% of the total; significant but not nearly enough to engineer a housing shortage. That's the sort of take that sounds good to the uninformed but is essentially dishonest.

The short term rental issue is more significant - about four times as many units are used in STR than are owned by institutional investors (defined as those that own 100+ properties). Keep in mind that those numbers will be skewed toward apartments in the STR market rather than stand-alone houses, while the institutional investor number will be skewed toward stand-alone houses since apartment buildings count as 1 property regardless of the number of units.

But again, NYC effectively banned STRs about a year ago and there hasn't been noticeable change in the rental market as a result. Nearly all the talking points you see about STRs ruining the rental market are ultimately funded by hotel industry groups, for fairly obvious reasons. Can it have an effect? Sure. But that effect is not nearly as large as you might think.

Kallainanna posted...

If it's "inefficient" to make sure everyone has housing, then I am 1000% in favor of an inefficient housing market.

Every form of inefficiency has a cost, and someone is going to have to pay it. From your take I'm guessing your answer to that question is "not me, so I don't care".