"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."
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.
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.
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.
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.
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.
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.
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 https://www.bloomberg.com/opinion/articles/2021-03-02/berlin-s-rent-controls-are-proving-to-be-the-disaster-we-feared?in_source=embedded-checkout-banner
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: https://www.theguardian.com/commentisfree/2021/apr/23/berlin-rent-cap-defeated-landlords-empty
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.
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.
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.
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.
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.
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.
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.