Seattle rent control: how would you like to join a 10 year waiting list for an apt.?

[Loren Pechtel]

Quote Originally Posted by Loren Pechtel View Post

The important point, though, is that there will be no new construction. The city can't grow because there's no place to move to.

I understand this in places like Stockholm, but in the US? We build suburbs for this very reason.

I'm talking about places with rent control. Going outside the rent control zone is one way around it.

 

[bilby]

3) Strong building codes, no rent controls - few apartments get built;

[citation needed]

I'll present you one concrete counterexample: Tokyo - strong building codes (to make them earthquake resistent, for example), tons of apartments, high urban density, no rent controls, largest metro population area in the world.

And the average age of buildings is...?

I want to see the empirical research you are basing this assessment off of as I can think of many other examples.

I don't need to give you examples; Just patiently explain to you that you appear to have have misunderstood what I said. Few apartments get built in high value areas, because THEY ARE ALREADY FULL. You can increase the number of apartments per sq km only by going up, which is expensive; or by making apartments smaller, which runs afoul of building codes. Tokyo has (comparatively) weak building codes, in terms of occupation density - it is permitted to build very small apartments indeed, and they are (in)famous for doing so. Earthquake proofing has fuck all to do with the topic at hand.

If you misunderstood me to be saying that few apartments EXIST, then your error is understandable. But that's not what I was saying at all.

 

[Axulus]

[citation needed]

I'll present you one concrete counterexample: Tokyo - strong building codes (to make them earthquake resistent, for example), tons of apartments, high urban density, no rent controls, largest metro population area in the world.

And the average age of buildings is...?

I want to see the empirical research you are basing this assessment off of as I can think of many other examples.

I don't need to give you examples; Just patiently explain to you that you appear to have have misunderstood what I said. Few apartments get built in high value areas, because THEY ARE ALREADY FULL. You can increase the number of apartments per sq km only by going up, which is expensive; or by making apartments smaller, which runs afoul of building codes. Tokyo has (comparatively) weak building codes, in terms of occupation density - it is permitted to build very small apartments indeed, and they are (in)famous for doing so. Earthquake proofing has fuck all to do with the topic at hand.

If you misunderstood me to be saying that few apartments EXIST, then your error is understandable. But that's not what I was saying at all.

Hmm, the only building code you seem to consider relevant is size of the living area. Why didn't you just say so?

If your claim is that a code to make apartments large leads to few apartments being built and expensive apartments, you'll get no argument from me.

 

[bilby]

And the average age of buildings is...?

I want to see the empirical research you are basing this assessment off of as I can think of many other examples.

I don't need to give you examples; Just patiently explain to you that you appear to have have misunderstood what I said. Few apartments get built in high value areas, because THEY ARE ALREADY FULL. You can increase the number of apartments per sq km only by going up, which is expensive; or by making apartments smaller, which runs afoul of building codes. Tokyo has (comparatively) weak building codes, in terms of occupation density - it is permitted to build very small apartments indeed, and they are (in)famous for doing so. Earthquake proofing has fuck all to do with the topic at hand.

If you misunderstood me to be saying that few apartments EXIST, then your error is understandable. But that's not what I was saying at all.

Hmm, the only building code you seem to consider relevant is size of the living area. Why didn't you just say so?

Because I felt that only a madman would imagine earthquake regulations to be relevant in the context?

If your claim is that a code to make apartments large leads to few apartments being built and expensive apartments, you'll get no argument from me.

Let's be honest, the only reason I got an argument from you in the first place is because people in political debate seem to value the 'gotcha' over understanding - Rather than seek clarification, political debaters declare their opponents to be stupid, on the assumption that only the worst possible interpretation of what they said could ever be their intention.

 

[barbos]

So is this true, I mean the part about people is Sweden actually waiting 10-20 years to get an apartment?
Where do they live meanwhile? Some other apartment?
I remember In Soviet Union people were waiting long time to get descent apartment while living in crappy ones.

 

[zorq]

Wow, amazing.

 

[Togo]

Price control causes shortage of all apartments precisely because you can't make them expensive.

Particularly since expensive apartments are generally made out of cheap apartments?

What do you mean?

Bilby said it better. If you have building codes limiting the density in particular areas, which in most European cities you do, then expensive apartments can only come about by cannibalising or converting existing cheap apartments. If you are relying on people increasing the supply of apartments in particular districts, then rent control has a downside of making that less profitable and thus you get less supply. If that's not possible anyway, as is true in most of the historic parts of central Stolkhlolm featured on the map, then the supply in those areas is irrelevant, and all rent control does is prevent them becoming areas for rich people only. Not entirely successfully, but it does cushion the effect and slow it down. Unless you think this somehow effects the demand, then what it does do is move the pressure to develop rich areas of Stolkholm away from those central areas, which is presumably what they were after in the first place.

To declare an interest, I own rental property in a rent control district in the US.

 

[Bomb#20]

Isn't rent seeking the textbook example of the kind of economic activity we want to avoid?

Are you attempting a proof-by-pun, where you take advantage of the circumstance that the word "rent" is popularly used for swapping money for permission to use somebody else's stuff, but is also used as economists' jargon for various abstruse categories of transaction that certain schools of economic theory argue are undesirable (to whichever desirers those schools define as relevant), in order to make it appear that you've produced an argument against swapping money for permission to use somebody else's stuff?

Or, contrariwise, do you in fact subscribe to one of those schools of economic theory, and thus have in mind a particular definition of rent, and have a reason to want to avoid seeking it, and have an argument for why the rest of us should also want to avoid seeking it, and have grounds to regard the lending in return for money specifically of apartments as satisfying your chosen definition of "rent"? If so, which school, which definition, which reason, which argument, and which grounds?

 

[laughing dog]

Isn't rent seeking the textbook example of the kind of economic activity we want to avoid?

Are you attempting a proof-by-pun, where you take advantage of the circumstance that the word "rent" is popularly used for swapping money for permission to use somebody else's stuff, but is also used as economists' jargon for various abstruse categories of transaction that certain schools of economic theory argue are undesirable (to whichever desirers those schools define as relevant), in order to make it appear that you've produced an argument against swapping money for permission to use somebody else's stuff?

Or, contrariwise, do you in fact subscribe to one of those schools of economic theory, and thus have in mind a particular definition of rent, and have a reason to want to avoid seeking it, and have an argument for why the rest of us should also want to avoid seeking it, and have grounds to regard the lending in return for money specifically of apartments as satisfying your chosen definition?

The term "rent" in economics goes back to David Ricardo who defined it as a return in excess of the minimum necessary to engage in the activity. "Rent seeking" in economic jargon typically means using the political process in an attempt to receive a such a rent. For example, the push to increase an effective minimum wage is an example of rent seeking, since the resulting wage is in excess of the presumed wage that people would accept.

 

[Bomb#20]

The term "rent" in economics goes back to David Ricardo who defined it as a return in excess of the minimum necessary to engage in the activity. "Rent seeking" in economic jargon typically means using the political process in an attempt to receive a such a rent. For example, the push to increase an effective minimum wage is an example of rent seeking, since the resulting wage is in excess of the presumed wage that people would accept.

Bingo. So unless Togo is also prepared to claim that the push to increase an effective minimum wage is also an example of the kind of economic activity we want to avoid, it would appear that he's blowing smoke. Given his posts in minimum wage threads, Togo is not prepared to claim that. But, to be fair, it's always possible that he has a different definition of "rent" from Ricardo, and what he wrote wasn't really the transparent equivocation fallacy it looks like. So I invited him to clarify.

 

[Jimmy Higgins]

NYC has rent control. NYC has a homeless problem. Put 1 and 1 together.

Price control causes shortage of all apartments precisely because you can't make them expensive.

Expensive or unaffordable to the current tenant?

 

[Togo]

Isn't rent seeking the textbook example of the kind of economic activity we want to avoid?

Are you attempting a proof-by-pun,

No, just a pun.

If you want to argue that, rather than a queuing system to get an apartment, it's better to have the price rise to levels that only a few can afford, you're welcome to do so. The number wanting to live in the centre is the same in each case.

 

[dismal]

Are you attempting a proof-by-pun,

No, just a pun.

If you want to argue that, rather than a queuing system to get an apartment, it's better to have the price rise to levels that only a few can afford, you're welcome to do so. The number wanting to live in the centre is the same in each case.

If price levels were higher wouldn't greedy and ruthless apartment builders build more apartments?

And if price levels were so high no one could afford them wouldn't greedy and ruthless apartment building owners lower prices rather than let buildings sit empty?

 

[ksen]

If price levels were higher wouldn't greedy and ruthless apartment builders build more apartments?

I don't know man, ask those rich NIMBY's.

 

[fromderinside]

No, just a pun.

If you want to argue that, rather than a queuing system to get an apartment, it's better to have the price rise to levels that only a few can afford, you're welcome to do so. The number wanting to live in the centre is the same in each case.

If price levels were higher wouldn't greedy and ruthless apartment builders build more apartments?

And if price levels were so high no one could afford them wouldn't greedy and ruthless apartment building owners lower prices rather than let buildings sit empty?

2006: We can flip and double our investment in just a couple of months Shirley!

2008: We can walk away and the mortgage companies will be stuck with this trash Shirley!

2014: We've got to control this run away buying and converting Shirley!

2015: We'll build some condos and people will come running to give us money they made on Wall Street Shirley!

Ah the free market. It always corrects itself and becomes a fair market for most of us Shirley!

Shirley! Don't jump Shirley!

 

[Bomb#20]

Isn't rent seeking the textbook example of the kind of economic activity we want to avoid?

Are you attempting a proof-by-pun,

No, just a pun.

If you want to argue that, rather than a queuing system to get an apartment, it's better to have the price rise to levels that only a few can afford, you're welcome to do so. The number wanting to live in the centre is the same in each case.

Who, me? I was merely pointing out that your argument made no sense. Why on earth would I argue that letting the owner rent to somebody who'll pay him what he wants is better than the government setting the rental price and requiring the owner to rent his apartment to whomever gets to the front of the government's queuing system if he wants to be a landlord? I certainly have no objection to the government setting your wage and requiring you to rent yourself to whomever gets to the front of their queuing system if you want to work for pay instead of letting you rent yourself to somebody who'll pay you what you want.

 

[bilby]

No, just a pun.

If you want to argue that, rather than a queuing system to get an apartment, it's better to have the price rise to levels that only a few can afford, you're welcome to do so. The number wanting to live in the centre is the same in each case.

If price levels were higher wouldn't greedy and ruthless apartment builders build more apartments?

Only if there was somewhere to build them.

No matter how much money I give you, there is a (very low) limit to the number of new apartments you can build in central Stockholm.

Money has ceased to be the limiting factor on the number of dwellings; so the number of people who can have apartments is capped. The question then becomes 'How do you pick who gets one?'.

You can give them to the richest applicants (the market solution), effectively excluding poor people from the area;
You can give them to the people who have waited longest (the rent control solution), effectively excluding new people from the area;
You could have a lottery every time one becomes available; there are lots of ways to choose.

Using money to determine who gets a scarce resource is a good idea, when more money can lead to more supply. But as that's not the case for apartments in fully developed inner city areas, it is no longer necessarily the best solution.

The mark of intelligence is recognising when a really effective technique has reached its limit of usefulness, and needs to be modified or even abandoned in favour of something new.

 

[Axulus]

If price levels were higher wouldn't greedy and ruthless apartment builders build more apartments?

Only if there was somewhere to build them.

No matter how much money I give you, there is a (very low) limit to the number of new apartments you can build in central Stockholm.

Money has ceased to be the limiting factor on the number of dwellings; so the number of people who can have apartments is capped. The question then becomes 'How do you pick who gets one?'.

You can give them to the richest applicants (the market solution), effectively excluding poor people from the area;
You can give them to the people who have waited longest (the rent control solution), effectively excluding new people from the area;
You could have a lottery every time one becomes available; there are lots of ways to choose.

Using money to determine who gets a scarce resource is a good idea, when more money can lead to more supply. But as that's not the case for apartments in fully developed inner city areas, it is no longer necessarily the best solution.

The mark of intelligence is recognising when a really effective technique has reached its limit of usefulness, and needs to be modified or even abandoned in favour of something new.

Uh, no, that is not the only reason money should be used to determine who gets one. It is also effective in allocating it to the person who desires it most or can get the most use out of it. In rent controlled areas, you have people living in apartments far longer than they otherwise would because of the large discount they are receiving. This encourages people to take long commutes to work and to also stay put even when economic opportunity arises in areas farther away.

Furthermore, your idea that it is impossible to add more apartments even if money were essentially unlimited in central Stockholm fails the bullshit test.

Central Stockholm has a population density of 6,388.06/km²

https://en.wikipedia.org/wiki/Stockholm_City_Centre

This doesn't even make the top 50 for cities as a whole, it doesn't even make it 40% of the way!

https://en.wikipedia.org/wiki/List_of_cities_by_population_density

 

[bilby]

Only if there was somewhere to build them.

No matter how much money I give you, there is a (very low) limit to the number of new apartments you can build in central Stockholm.

Money has ceased to be the limiting factor on the number of dwellings; so the number of people who can have apartments is capped. The question then becomes 'How do you pick who gets one?'.

You can give them to the richest applicants (the market solution), effectively excluding poor people from the area;
You can give them to the people who have waited longest (the rent control solution), effectively excluding new people from the area;
You could have a lottery every time one becomes available; there are lots of ways to choose.

Using money to determine who gets a scarce resource is a good idea, when more money can lead to more supply. But as that's not the case for apartments in fully developed inner city areas, it is no longer necessarily the best solution.

The mark of intelligence is recognising when a really effective technique has reached its limit of usefulness, and needs to be modified or even abandoned in favour of something new.

Uh, no, that is not the only reason money should be used to determine who gets one.

Then it's a good thing I didn't say it was.

It is also effective in allocating it to the person who desires it most or can get the most use out of it.

Yes, that's true. But it may not be the best or the only way to do that.

In rent controlled areas, you have people living in apartments far longer than they otherwise would because of the large discount they are receiving. This encourages people to take long commutes to work and to also stay put even when economic opportunity arises in areas farther away.

Furthermore, your idea that it is impossible to add more apartments even if money were essentially unlimited in central Stockholm fails the bullshit test.

Once again, you are arguing against something I didn't say.

You cannot build more apartments in Stockholm just by increasing the amount of money you are prepared to spend. Other things would also need to happen, that are not related to how much cash is involved. Those things are possible, but unlikely to occur.

Central Stockholm has a population density of 6,388.06/km²

https://en.wikipedia.org/wiki/Stockholm_City_Centre

This doesn't even make the top 50 for cities as a whole, it doesn't even make it 40% of the way!

https://en.wikipedia.org/wiki/List_of_cities_by_population_density

Yes. And the authorities have decided that the historical character of the city must be preserved, and therefore limit the changes that can be made. If you levelled Stockholm, and built a Homg Kong style high density city on the site, then you could fit in far more apartments. But simply being able to afford the financial cost of the demolition and construction work will not get you anywhere in bringing this to pass.

Money is not the only consideration. In cases like these, it isn't even the biggest consideration. So economic rules are no longer necessarily the best rules to play by, to get the best results.

 

[Togo]

Having been to central Stolkholm, I can assure you that you won't fit any more apartments into that space, without demoloshing the 17-19 century buildings they are in. Which are extremely attractive, by the way, and I very much enjoyed my holiday there.

http://www.visitstockholm.com/en/See--do/Guides/Three-world-heritage-sites/

As the OP confirms, there are many areas of Stokholm that aren't so tightly cotrolled, so why fuss about the one area that is being preserved as a museum and heritage site?