> My grandparents lived in rent controlled apartments in NYC that they could not have afforded to stay in [...]
This is how rent-control can create shortages.
Under rent-control, older people who would otherwise downsize have no incentive to do so. Younger people who might still be able to live with their parents instead rent separate apartments.
The fundamental problem is there's not enough housing for everyone to get as much of it as they want. So, there's a need to economize.
The additional problem is that your residence is not a commodity to you. Being forced, by the market, to move out of your place is very traumatic, even if it could be better used by someone else.
The point of the anecdote was to show how anecdotes aren't a good way to argue. The anecdote doesn't show anything -- not my point, and not yours either.
Their specific story is not the point -- my point was that if you want to cherry-pick anecdotes of a program not working, one can always counter-argue with other anecdotes.
Either you believe that it is in the public interest to have some availability of low-income housing or you don't. I do think it's in my interest and I accept that I will pay more to have it be available.
Is rent-control the best way to achieve that goal -- I don't know -- this isn't an area of my expertise (judging from this thread, it isn't any HNer's) -- I haven't heard anyone propose something better -- just complain about it based on hearsay.
> Is rent-control the best way to achieve that goal -- I don't know -- [...] -- I haven't heard anyone propose something better -- just complain about it based on hearsay.
What if rent control is actually causing shortages were there's no physical scarcity? We can mostly agree on intent, but sometimes, collectively, we enact plans that cause the opposite of what we want.
It happens that I'm just reading Thomas Sowell's Basic Economics. In the chapter on price controls, he argues that rent control (and price controls, in general) cause shortages where there is no scarcity of the underlying commodity.
As you point out, I'm not an expert, and FWIW I haven't read the original sources. I have some problems with his analysis of medical care price controls, but I'll get to that later.
Here are some quotes and his cites...
All the quotes are from:
Sowell, T. (2007). Basic Economics. A Common Sense Guide to the Economy. 3rd ed. New York: Basic Books.
"Before rent control was imposed in Sweden, less than one-fourth of all unmarried adults there lived in their own separate housing units in 1940, but that proportion rose over the years until just over half did by 1975." (p.41)
... from the article, "The Rise, Fall and Revival of Swedish Rent Control", in the book Roofs or Ceilings? by Milton Friedman and George Stigler.
"In San Francisco, a study in 2001 showed that 49 percent of that city's rent-controlled apartments had only a single occupant, while a severe housing shortage in the city had thousands of people living considerable distances away and making long commutes to their jobs in San Francisco." (p.41)
... from p.21 of San Francisco Housing DataBook, commissioned by the city, and produced by consultants Bay Area Economics, in 2001.
"Meanwhile, a Census report showed likewise that 48 percent of all households in Manhattan, where most apartments are under some form of rent control, are occupied by only one person." (p.41)
... from page A2 of the September 3, 2005 issue of the San Francisco Chronicle, title: "Census: More Americans Living Alone."
"A study published in 2001 showed that more than one-fourth of the occupants of rent-controlled apartments in San Francisco had household incomes of more than $100,000 a year." (p.48)
... not sure where he got this -- I need to get back to coding -- if you care, check out his Sources chapter.
Without looking further into the issue, I'm reasonably convinced that rent control drives up rental prices, and creates housing shortages (at the artificially low price levels).
BUT ...
What this doesn't consider is that my home is not a fungible or liquid asset for most people. You may be able to change residences easily, but it will take time for your new residence to become your home.
It's a lot easier to consume a bit less power, produce a bit less garbage, or spend a little less money in response to changing market conditions.
Because of this, people feel very strongly about holding on to their homes, even if by this hoarding, they're harming others.
This is how rent-control can create shortages.
Under rent-control, older people who would otherwise downsize have no incentive to do so. Younger people who might still be able to live with their parents instead rent separate apartments.
The fundamental problem is there's not enough housing for everyone to get as much of it as they want. So, there's a need to economize.
The additional problem is that your residence is not a commodity to you. Being forced, by the market, to move out of your place is very traumatic, even if it could be better used by someone else.