richardhutnik said:
HappySqurriel said:
Here is a different situation which will clearly make my point ...
If you eliminated telephone carrier subsidies do you think Apple would continue to focus on producing an $800 phone, or do you think they would primarily focus on making a $200 to $300 phone? With the iPod touch being very similar to an iPhone and selling at a massive mark-up at $300 do you think that people would have substantially worse phones due to the lack of subsidies?
In the absence of rent control, real estate investors would build rental properties to meet the demands of the middle and high end markets resulting in a lot of bigger and nicer units being built in a city; and the previous middle and high end apartment buildings would be able to rent for less money resulting in more affordable units. Over time, the average quality of housing unit for everyone (including the poor) would become better.
In the absence of subsidies at the low end of the market, people who rent to low income individuals would have to price their units according to market conditions and the net result is rental prices would fall to levels that low income people could pay.
When it comes to food, if the government wasn't paying for food to be converted into fuel or paying farmers not to grow crops on their land it is likely that the supply of food would increase and the price of food would fall.
|
And what then happens, is EVERYONE thinks they are going to get a piece of that upper end pie, so they build to it, and don't build to the lower end. You end up with a glut of property people can't afford, and can't afford to maintain. Without the subsidies to assist the poor to get housing, they go without. The property will also often be torn down and replaced with other property. The housing doesn't magically relocate, and where the heck is the new rental property going to go up in the likes of NYC?
You can argue that the situation with American home value spiking was due to cheap mortgages being available and financing for more house that would be reasonable. People see it as an investment opportunity, assuming prices go up. Same happened with college education and also health care. The incentives to move up the upper end is out there, so everyone does it. No one looks downward. And that is a problem, and why you can't just say that if you remove rent control BAMMO, no more homeless problem.
|
You might find this interesting: https://www.frpo.org/documents/Gilderboom-30YearsRentControl-JUA-May2007.pdf
While there are (probably) factors not being controlled for, the rent controlled cities had similar rents but fewer rooms, older buildings, higher levels of plumbing deficiency and a slower growing population.
"About the only measurable impact is that landlords may have cleverly reduced the size of rental units to create more units and profit in rent control cities"
By most metrics the poor are worse off because of rent control, but as long as it is well intentioned (like all liberal policies) it is impossible to eliminate.
