Comment by Manuel_D

Comment by Manuel_D 4 days ago

3 replies

Sure, but if the price of housing is too high then price controls won't fix it either. You'd end up with no availability, or a decades-long waitlist for rent-controlled apartments like Stockholm.

The issue with housing affordability is that the market is often prevented from responding to high demand and low supply by regulation. SF is very restrictive with permitting housing construction, despite the incredibly high rents. It's not that the market forces are failing to incentivize housing construction, it's that developers are prevented from responding to market demand.

Qwertious 3 days ago

>Sure, but if the price of housing is too high then price controls won't fix it either. You'd end up with no availability

You're assuming a baseline of a functional market system.

If you have widespread price-fixing between landlords (say, via everyone using the same algorithm service that gives everyone the same recommendation) then rent control isn't introducing a price fix, it's just changing the level of price fixing.

If you can only rent for $X000, but the rent price is fixed to at least $X500, then for you, there might as well be no availability - the landlord is leaving the place vacant due to the price-fixing.

  • Manuel_D 3 days ago

    The allegations of rent fixing don't look very credible. RealPage had a single-digit market share in SF when that story was making the rounds, nowhere near enough to effectively fix rates. Furthermore, these cities don't have high vacancy rates. And lastly, cities that banned the use of the software and did not see a subsequent drop in rental prices.

  • WalterBright 3 days ago

    > widespread price-fixing between landlords

    This is called a cartel. The trouble with cartels is enforcing it. Cartel members cheat all the time by selling for less than the cartel price in order to get a larger share of the market. The setup is unstable as the incentives are much like the Prisoner's Dilemma.