The only fix for high housing costs is to build more housing or make your area shitty (so people want to leave). The latter isn't popular so that leaves only one option.
You cannot legislate away costs for an in demand product. It can't be done. Put strict rent increase laws in place and all you do is make it so people sit in their apartment for years to lock in that low rent.
There is a third way. You can reduce demand in other ways, like steep taxes on second and third homes. This releases pressure on the rental market by enabling some renters to afford to buy rather than rent.
> You can reduce demand in other ways, like steep taxes on second and third homes.
The properties people purchase as second and third homes aren't going to make a difference to the people struggling to afford 1 bedroom apartments.
Focusing on second and third homes is just a way to punish people wealthy enough to afford multiple homes. While punitive taxes against other classes are attractive to certain parts of the voter base, it doesn't actually improve the situation for people looking for cheap apartments at all.
I don't think this is entirely true. If people who are currently renting move into homes then their apartments will be rented to people who are looking for housing.
It seems like if you add supply to one area of the housing market like the one above, there is a group of people ready to take advantage of that supply.
3bdroom apartment renters buy a home, then 2bdroom apartment renters get a bigger place that's affordable and meets their needs.
Assuming this works exactly like intended, that 1 family with two or three houses now only owns one and 2 other families get a house, then you're freeing up supply across the whole range of properties.
As someone who lives in a ski town, they are far too expensive for normal people to live there. Local businesses can't find employees, and homelessness has risen dramatically. A huge number of units in the town sit empty most of the year. Some of this is due to vacation homes, I think a lot is also due to speculators and mortgage rate fluctuation causing inefficiencies in the market.
> The properties people purchase as second and third homes aren't going to make a difference to the people struggling to afford 1 bedroom apartments.
They will. As fewer homes are allocated to current homeowners, they will be instead available to renters. With fewer renters on the market, the cost of renting will decrease.
Put strict rent increase laws in place and all you do is make it so people sit in their apartment for years to _live their lives in their homes_.
Not that I disagree with building more housing, or being more creative with rent control, but the fact that people in rent conrolled areas can afford to stay in one location isn't a bug. There may be other bugs, but that ain't one.
> The only fix for high housing costs is to build more housing
That won't fix anything. People with capital compete with people who have housing needs for the available houses. Increasing number of houses doesn't change this dynamics.
The people in need of housing will get priced out of available houses eventually.
What should be done is taxing housing heavily and progressively so that houses become a shitty asset that costs you more the more you have of it.
People with capital will drop it like hot potato and finally people who just want to live will be able to afford it again.
> You cannot legislate away costs for an in demand product. It can't be done.
It's done, and in many places around the world. In NY and SF; in Vienna, the government owns a large proportion of the housing and keeps it affordable (iirc).
They keep it affordable for the family dynasties that rent them. There are like 3rd generation rented apartments in NYC. People death grip those places. Even more than death grip because they are legally entitled to pass it on to their family.
So yeah, if you were lucky enough to have a grandparent get one of those apartments, yes, it will be affordable.
Well, if the supply is going to be limited forever the way it's looking, the least we can do is make it cheap and stop any more economic activity going exclusively to ultimately unproductive rent seekers. It's option three to your "make the area shitty".
I mean, it does accomplish the goal of prioritizing the welfare of existing residents over the welfare of future residents and non-residents.
Most societies do that sort of thing on the regular, but people pushing back against rent control rarely want open borders and welfare for non-citizens.
I understand the general economics behind it, but I don’t think you can free market the problem away when the market is very obviously not free. Just off the top of my head - incentives for over complicating the zoning laws in big cities, extreme push from the locals to stop the new constructions, owners not wanting their investments to go down.
I live in a rental building in Vancouver, and without rent control it would be awful for everyone, as the demand has been insane in the past decade. Sure, for people like us who can pay 2x the rent wouldn’t exactly be a problem, but I have friends, and a lot of elderly in my neighbourhood who would have to move out right away. I can’t imagine a possible way for supply to catch up with the actual demand just because how the municipal governments function. And well, construction business isn’t known to be efficient here in North America.
Your component proposed a set of rent controls (12 month notices, limited yearly raises) that are basically equivalent to rent control in many locations.
You cannot legislate away costs for an in demand product. It can't be done. Put strict rent increase laws in place and all you do is make it so people sit in their apartment for years to lock in that low rent.