
Rent control: Does it work? - pmoriarty
https://www.bbc.co.uk/news/business-47028342
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pmoriarty
_" Standard economic theory is that rent control does not work, because if you
force rents down, landlords may decide not to rent out their properties, which
reduces the amount of rental property available."_

If that's the main problem, then why not simply combine rent control with a
big tax on properties rental that remain vacant for too long?

 _" Researchers also found that the controls helped accelerate gentrification,
because some landlords demolished their older properties in favour of new-
builds, which were exempt from the limits."_

So don't exempt new-builds from rent control.

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iso1337
1) taxing vacant properties: Vancouver started this, although with the intent
of keeping out foreign riff raff. Eg, there may be loopholes for the longtime
BC residents who just happen to own a second condo. It will be interesting to
see how that plays out over time.

2) then you won’t get any new builds being built. Especially combined with all
the regulations on minimum parking sizes, %age of below market units, if you
add on permanent rent control, you may well tip over into the point where no
developer will risk building because any project is guaranteed to be a loss.

~~~
pmoriarty
A loss for renters? With rental prices being what they are, we've got a looong
way down before that happens.

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iso1337
It now costs ~427k/apt to build in SF.

[https://www.spur.org/news/2018-05-09/it-all-adds-growing-
cos...](https://www.spur.org/news/2018-05-09/it-all-adds-growing-costs-
prevent-new-housing-california)

I'm not sure what the rule of thumb is for commercial builders, but for real
estate investors, a good deal is that 1 months rent = 1% of the price. So..
yeah, I dunno if there's actually that much wiggle room.

It may work if it's a nation-wide policy. But let's say you enact this policy
in one city and I'm an investor. What's to stop me from just deploying my
capital elsewhere?

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entity345
It is well known that it does not work.

It tries to respond to a supply and demand imbalance by making that imbalance
even worse...

It is purely political spin. And that's a shame.

