Discussions of rent control never seem to distinguish between rent control on new and recently constructed units (which suppresses construction), and rent control on 20+-year-old houses (which doesn’t). Paying attention to this distinction suggests some easy wins, like waiving property tax for the first few years of a building’s life.
AFAICT there isn’t significant disagreement among experts about the effects of rent control, construction, etc on housing prices. However, I don’t think local policymakers have reliable access to uncorrupted information; if they try to find out what effects policies will have, then political processes can guide them to a tiny minority of economists who will tell them whatever those political processes wanted them to hear. It might help to tell city councilmembers that they can pin an economics-department directory to a dartboard, and that throwing darts at it and emailing whoever comes up will get them more reliable information than they’re currently getting.
Rent control on 20+ year old houses not affecting new construction seems like a [citation needed] sort of thing. I’m not sure how large the effects are, but rent control on old houses would reduce the value of new houses because you’re signalling that new construction is very likely to come under similar regulations in the near future.
It’s possible this is only “limited upside”, but limiting the upside to investments isn’t something that obviously has no effect. I assume the effect on limiting upside for construction would be much smaller than i.e. startups, but I’m not convinced it would be literally zero.
I don’t have citations for you, but it seems relevant that income far in the future gets discounted quite a bit compared to current income, which would imply that short-term incentives are more important than long-term incentives.
(A better argument would need to be made with realistic numbers.)
Discussions of rent control never seem to distinguish between rent control on new and recently constructed units (which suppresses construction), and rent control on 20+-year-old houses (which doesn’t). Paying attention to this distinction suggests some easy wins, like waiving property tax for the first few years of a building’s life.
AFAICT there isn’t significant disagreement among experts about the effects of rent control, construction, etc on housing prices. However, I don’t think local policymakers have reliable access to uncorrupted information; if they try to find out what effects policies will have, then political processes can guide them to a tiny minority of economists who will tell them whatever those political processes wanted them to hear. It might help to tell city councilmembers that they can pin an economics-department directory to a dartboard, and that throwing darts at it and emailing whoever comes up will get them more reliable information than they’re currently getting.
Rent control on 20+ year old houses not affecting new construction seems like a [citation needed] sort of thing. I’m not sure how large the effects are, but rent control on old houses would reduce the value of new houses because you’re signalling that new construction is very likely to come under similar regulations in the near future.
It’s possible this is only “limited upside”, but limiting the upside to investments isn’t something that obviously has no effect. I assume the effect on limiting upside for construction would be much smaller than i.e. startups, but I’m not convinced it would be literally zero.
I don’t have citations for you, but it seems relevant that income far in the future gets discounted quite a bit compared to current income, which would imply that short-term incentives are more important than long-term incentives.
(A better argument would need to be made with realistic numbers.)