
Silicon Valley, Housing Villain, Tries to Make Amends - joubert
http://www.nytimes.com/2016/10/06/us/california-today-tech-companies-bay-area-housing.html
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davidf18
Finally! This is a problem not only in SF, but NYC, Boston, DC, LA and London
for example.

The problem is that zoning laws that restrict housing density make rents
higher for tenants while artificially increasing the value of property for
landlords. This is one reason why Donald Trump who has substantial property in
Manhattan is as wealthy as he is.

The use of politics to create artificial scarcity is a form of "economic rent"
which is a "market failure" creating inefficient markets. This was done in NYC
with Taxi medallions which had limited the number of medallions to 13,000
creating artificial scarcity with the result that the market value of a taxi
medallion was $1.2 million. Thankfully, Uber/Lyft/Gett came along and relieved
the artificial scarcity and made taxi-like vehicles more available. Price for
taking a taxi are lower and the value of the medallion has dropped from $1.2
million to $700,000 or even lower. Everyone wins but the taxi medallion
"landlords" and the banks/credit unions that provide the mortgages.

All that needs be done is to reverse the laws that benefit landlords over
tenants by creating artificial, politically induced scarcity. This will
dramatically improve the local economy as tenants pay less money on rent and
more on goods and services in the area. It will stimulate a housing boom
employing construction workers and as more people move into the area, it will
further stimulate demand for goods and services helping local business. As
housing costs decrease, firms local firms can hire more employees and further
stimulates the local economy. Everybody wins except for the wealthy landlords,
who like the taxi medallion owners will see their artificially high property
prices decrease.

