Rents fall and listings increase after rent control ends in Argentina
msn.com
msn.com
Give me an example of a "solution that actually functions," to any problem you know a lot about, during a period of high inflation.
I saw FIRST HAND that overnight we went from only quoting in China and Taiwan, to quoting and getting deals in USA.
I was writing the quotes, I was approving them. It turned right back around in 2021.
What I love is that you can’t admit that you could be wrong - when someone on the street is this case is telling you directly.
You have no idea what you are talking about. Just a stubborn ideologue that could never admit Trump was right on this.
The actual article is from the quite biased libertarian Reason Magazine: https://reason.com/2024/09/26/rents-fall-and-listings-increa..., but it's being laundered through msn.com, which obscures that.
No it isn't. The GP accused the flaggers of flagging it for ideological reasons, because it goes "counter to their narrative." I'm saying that it's legitmate to flag because it's been posted using the wrong url, because awareness of the true source and knowledge of its biases is useful for evaluating the content.
I would say Rent Control causes more harm than good overall.
It's a failure but people wish it to be otherwise. They wish for things to spring out of the aether by wishing it so.
Ideologies gave us freedom, democracy, and nearly every genocide. They can be useful, to a degree, but like any model they break down and cause problems when taken to the extreme.
You need to get rid of the actual problem: Capitalism
The context of all these good/bad arguments is that they're good/bad solutions under Capitalism.
But Communism was never implemented in it's "described" (or "pure", if you want to frame it that way) form. The Soviet Union was clearly heavily corrupted, among many other issues that diverge from what Communism is "supposed" to be.
Perhaps a system that favors people over corporations?
Under capitalism, individuals are allowed to own enterprises. If they’re corrupted, they’ll fail and other enterprises will supersede them. Under socialism and communism, state monopolies deny ownership and accountability to the public. If they’re corrupted, there is nowhere else to turn.
Join the queue for your turnip rations and be happy you’re equal to all the other miserable people stuck under the regime (except the government officials of course - they’re never equal to the plebs)
How anyone can support far-left ideology after the lessons of the 20th century is beyond me.
See: United States government
See: American police/CJS
See: City governments
> Under capitalism, individuals are allowed to own enterprises.
I live under this system, you don't need to explain it. I can see how it has failed for millions of Americans while propping up the very few.
> How anyone can support far-left ideology after the lessons of the 20th century is beyond me.
I never said I supported Communism. But Capitalism is a failure for the proles due to corruption, favoritism, and purchasing of the [American] government.
> it has failed for millions of Americans while propping up the very few
It only “fails” for people that lack the capacity or the will to contribute to society.
Whereas far-left ideology destroys wealth, freedom and happiness for everyone except the ruling class.
And the “very few” you describe is actually hundreds of millions of people who enjoy a world class high standard of living in America compared to the rest of the world.
― C.S. Lewis, God in the Dock
> Faced with inflation and rigid restrictions, landlords were hesitant to sign long-term leases. Many either set excessively high rents to hedge against future inflation or withdrew their properties from the rental market altogether. Others opted to sell in U.S. dollars or list them on short-term rental platforms like Airbnb, where they could charge in foreign currencies.
For instance, I don't think I've ever heard of a rent control law that allowed setting "excessively high rents" to try to preemptively counter it. I think it's a lot more typical to take the current market prices and limit the rate of future increases.
In general it has had it's benefits for safety but you now also have 70-90 year olds that once had families that now are living alone in 120m2 4-5 room apartments that can't move to anything smaller (thus yielding space to a young family) because the rent in anything smaller would be larger than their current rent, so they stay and the housing usage gets skewed.
Google is translating that as "utility value rent," and it appears to be something calculated by a committee based on the "value" from the tenant's point of view.
I checked the laws a bit, the utility value is only mentioned for "disagreements" and the comments explicitly mentions raises as the source for disagreements. Thus when signing an initial contract (as i mentioned) the landlord is free to set whatever they feel like since a tenant would have to agree to get the apartment.
In practice (not by law) landlords are supposed to give a portion of their available stock to the common queue systems, those apartments seem to follow the utility value with some adjustment for location.
However a few years back I was in a separation and since living in Stockholm also a bit desperate and looked at the private landlord queues, the prices were far higher and since I would agree to that initial pricing it would supercede the utility value. Needless to say, I quickly pivoted to buying since that's cheaper in the long run.
I’d be okay if they removed the caps in my city as well, if we didn’t have enormous amount of red tape and barriers to entry to construction. Otherwise the supply goes up slower than the population increase, so percentage of apartments for rent keeps decreasing.
California rent stabilization doesn't have any stipulations about starting rent for new tenants, only increases for existing tenants.
While I haven't seen it explicitly stated anywhere, I assume California landlords take into account the rent increase restrictions when deciding on what to ask for starting rent. They don't want to be caught in a situation with a 20% insurance increase and a max 8% rent increase, such that they are no longer cash flowing. So they'll add some buffer ahead of time.
The rise in price was due to deficiencies.
The lack of supply was completely expected and would have been worse with a stronger law.
Some rent control laws only apply to leases of individual tenants and don't apply between tenants. In those, as long as someone leaves 'normally', you can charge the next tenant whatever you like; although if everyone sets excessively high rents to counter rent control, exvessively high rents are the market rate.
Other rent control laws do limit rents since the start of the law or sometimes a point in time before the law.
More typically, you limit the amount of rent increases for new tenants, and have the original reference for rent be set before the law was brought up, so nobody had time to preemptively raise rent to cover rent control.
In the Netherlands there is a points system. Every feature of a house like the number of bathrooms, windows, heating, etc contributes to the score. It's mostly used to define the social housing threshold: houses below a certain number of points are removed from the free market and have the rent fixed as a function of the score.
For houses on the free market, you look at average price per sqm for the area. High rent is off the curve. You can also correlate to the baseline set by the points system, and rent as a proportion of average income to define 'high'.
For context, Argentina has had 50% inflation at the time rent control went into place, and inflation had increased to 250% in 2024. The rent control required 3 year contracts in Argentine currency only.
In my opinion, this was essentially a speed run of the effects of other rent control laws which limit rent increases to rates below inflation.
Germany - where landlords can't charge more than 10% above the local average rent.
Spain - where landlords can increase rent only if they improve the property, but the increase can't be more than 20%.
Netherlands - where one in three homes in the Netherlands are rent-controlled, and rental apartments are capped at under €1,000 per month.
France - rent control applies to furnished and unfurnished properties.
Scotland - government introduced emergency legislation to cap rent increases in the private sector at 3% as of 2022.
Sweden - rent controls apply to new and older buildings, with local market conditions setting the regulated rents.
New York City - a Rent Guidelines Board sets rent increases based on inflation, and landlords are required to renew leases.
"Vote for me! Forget that I have been in office for decades, vote for me and this time I will make those greedy landlords pay. I will give you rent control! Vote for me."
And it works.
I'd be curious to see a 'sliding scale' implementation:
* all newly built units are uncontrolled
* all units that are 5-10 years old have a maximum rental increase of 3xCPI
* all units that are 10-15 years old have a maximum rental increase of 2xCPI
* units >15 years old are rent controlled (~CPI increases)
Is anyone aware of jurisdiction(s) that have done such a thing?
Places that implemented it (SF, Santa Monica, West Hollywood) now have the highest rents. People that are grandfathered never move. Reduces available locations by artificially scarcity. Landlords love it. Grandfathered renters love it. People moving in need to afford much more than older residents and hate it.
You have to recognize reality is messy and you need a mix.
Right now, there are crappy 100 duct tape fixes. Maybe some teachers are in rent controlled places paying 25% market price, and some are paying full market. Some teachers are in City owned housing that only teachers qualify for.
In short, it isnt a functioning market. For it to be a functioning market, you have to let the taxpayers confront the question of if they would rather pay for schools or not have them.
Anyway we're talking people here (for now; AI will change this and soon). The only way unit price goes down is if their own costs go down e.g. education loans drop or disappear.
I think the current approach is counter productive because it tries to bypass this with policy solutions that mean workers keep making unsustainable wages, but are subsidized in several other ways with poor implementation.
>Anyway we're talking people here.... The only way unit price goes down is if their own costs go down e.g. education loans drop or disappear.
Im not sure what you are saying here.
I dont think the costs to become a teacher are the bottleneck. Cost of living is the financial bottle neck, and the misery of working in a dysfunctional school districts is the emotional bottle neck.
I know several former teachers in SF. You can afford to be a teacher in SF if you have rent control, but not if you dont. Some left for jobs that pay even worse because the conditions were so bad (broken bones from students, incompetent administrators, hostile parents, ect)
Market participants count on the human capacity for self-deception, asymmetrical information, and emotion-based decision-making. In the case of teachers, there will always be some unwise rationalization based on the kids they'll be helping, how beautiful San Francisco is, how nice it is to be on the ocean, etc., which will cause them to make a bad decision about taking a job in San Francisco.
Maybe that's a job for AI. Tell it your job offer and how you spend your money, and it will tell you whether or not you can afford to take the job or run away.
I think there is far more moral hazard in having the government overrule the preferences people act on and enforce the solution they think people should select.
Some people make mistakes. People learn and society learns. Markets take time to search for and find equilibrium.
Preventing markets which are out of equilibrium from progressing towards equilibrium often triggers a cascade of secondary problems.
I'm saying we should let the schools get to the point of teacher shortages, and then teacher salaries will increase until the they can afford to live in the area.
The current solution is stupid. We keep paying them unsustainable salary and work them in garbage conditions, but 1/10 wins the free housing lottery and gets below market housing.
Free market doesn’t optimize across society’s needs, which is why we have government to redistribute / ease things via taxation.
Seems like a great way to make sure supply never adjusts, which is what happens in places like SF.
In the mean time rent control means we haven’t completely killed off normal people who were here before. The city has already suffered a big blow to culture, teachers, etc due to the price increases this far (and with it techies who care about money and job vs desiring the location, and thus take vs give).
location
Do you think all restaurants would just close down if there wasn't rent control? Of course not, restaurants would be forced to pay a high enough wage for workers to pay for housing.
This is not proof that rent control causes high rents.
It could be that these are highly desirable areas without enough housing to meet demand, and rent control was in response to high rents.
It could be that landlords are evading rent controls.
It could be that rents would be even higher if rent control didn't exist.
Controlling them after few years later they are controlled, just with less harsh terms. The issue is supply, we are not building enough housing. Controlling after few years means the viability of projects goes down, which is meaningful with the absurdly high costs of regulation, land, and construction.
If it'a a duplex, no rent control. If it's built in 1979 or newer, no rent control.
If the renter leaves, a new renter's rent is not limited based on past rent.
Regular annual increase is capped at 5%, but there's the usual exceptions available.
That said, the increase limit is much less than the CPI, about 0.5X, So covered rents grow much slower than inflation.
As such, there is a pretty big secondary market where leaseholders make money subletting rent controlled places.
I know about a dozen people who have moved to other cities and states, but sublet in SF making thousands.
[1] https://www.eleconomista.es/economia/noticias/12935188/08/24...
[2] https://www.ar15.com/forums/General/Milei-ends-rent-control-...
https://freakonomics.com/podcast/why-rent-control-doesnt-wor...
The tl;dr of this article is this line - it increased supply:
> But after the repeal, Buenos Aires saw a doubling of available rental units, and rental prices have stabilized.
That would not happen in SF.
One issue is rent control. Another, separate, issue is housing/rental supply.
Getting apartments built in SF is notoriously difficult. It's not realistic to think you can double the supply of available rental units here imho.
That is a political ask that people have been trying to do for ages, and which other people, homeowners, have been successfully blocking for the same amount of time. While there's an ongoing effort to push against that, I would expect the blocking to continue, successfully as it has been until now.
> The loose term "rent control" covers a spectrum of regulation which can vary from setting the absolute amount of rent that can be charged, with no allowed increases, to placing different limits on the amount that rent can increase; these restrictions may continue between tenancies, or may be applied only within the duration of a tenancy.
argentina has never, to my knowledge, had rent control in any of these senses. when the lease expired, after three years (or previously two) there was no restriction on how much the landlord could demand in rent to sign a new lease. commonly it would be several times the old rent, due to inflation. three years ago the dollar was 184 pesos https://dolarhistorico.com/cotizacion-dolar-blue/mes/septiem... so a 250 dollar rent would have been 46000 pesos. now it's 1230 pesos https://dolarhistorico.com/cotizacion-dolar-blue/mes/agosto-... so those 46000 pesos would be worth 37 dollars without the yearly inflation adjustment
the text of the article sort of admits this by omission, while implying the contrary through its dishonest choice of wording. this is in sharp contrast to the integrity and reliability i normally expect from reason—i often disagree with their values but rarely with their facts
this has misled commenters here such as https://news.ycombinator.com/item?id=41659436
But, at least according to MSN, it did have effects on real estate concomitant to the arguments against rent control.
Interesting result. Argentina is in the midst of a grand experiment.
> Rent control is part of a system of rent regulation that limits the changes that can be made in the price of renting a house or other real property.
https://en.wikipedia.org/wiki/Rent_control_(disambiguation)
What you describe, and what Argentina had, is fairly clearly a limit on the changes that can be made in the price of renting. Requiring a certain term of lease, and prohibiting a lease which allows, for example, adjusting the monthly rate to match inflation, are both limitations which fairly belong in this category.
You've accused Reason of dishonesty here, I don't think that's accurate. You might prefer the phrase to be used in some more restrictive or definite sense, but they describe the law in the second paragraph:
> The 2020 Rental Law, enacted under former President Alberto Fernández, aimed to protect tenants. It mandated three-year lease terms and required rent to be paid in pesos—a currency rapidly losing value due to rampant inflation. Rent adjustments were limited to once a year, based on a central bank rate that factored in inflation and wage growth. The law also allowed tenants to dictate the conditions for lease termination.
Is any of this wrong?
an employee who coaches his kid's soccer team on weekends isn't a 'whistleblower' even though he blows a whistle, a barium getter isn't a 'vacuum cleaner' even though it cleans a vacuum, and things like a three-year lease aren't 'rent control' even though they control the rent
you already know this, since you're a native english speaker, but i'm commenting to keep you from confusing people who might not be
1. Cities are reaching the limit they can sprawl while still effectively being the same city. Atlanta springs to mind;
2. People vote for politicians who restrict supply to increase the value of something they see as an asset rather than something simply to provide shelter; Increasing house prices are simply stealing from the next generation. That's all. Minimum lot sizes, SFH only zoning, bans on MDU/ADUs, etc all exist solely to increase house prices;
3. Politicians only ever tackle the problem from the demand side eg mortgage interest tax deductions, first home owner grants. All this does is increase the prices by the induced demand. It's a wealth transfer to the existing homeowners.
4. Landlords. In an ideal world, they wouldn't exist. This almost happened in the UK and it was surprisingly simple [1]. They are quite literally and figuratively rent-seekers.
The YIMBYs will tell you "build! build! build!". This is overly simplistic. It also depends on what you build. Look at Manhattan that is building ultra-luxury skyscrapers. There is no trickle down effect here. It's simply money laundering and parking capital.
What we need is a healthy supply of quality, affordable housing. We simply won't get that relying on private landlords. The only solution to thisis so-called "social housing". That is, government owned and supplied housing. Vienna is a prime example here where over 60% of the housing is social housing. Americans will tend to immediately rject this as "projects" or "ghettoes" (or, worse, "socialism").
Housing unaffordability is the number one factor leading to houselessness. It's not even close.
Denying people shelter is, quite literally, state violence. It is causing direct and immediate harm for the sake of wealth accumulation by a few.
So where does rent control fit in all this? It can be a short-term aid at stabilizing prices but it is not a long-term solution. It tends to make it impossible for people to move. Landlords will resort to unethical or even illegal tactics to force out tenants so they can relist at market rates. Or they'll leave units vacant (IIRC there are 100K+ purposefully vacant units in Mnahattan).
Pretty much our entire society is designed to extract wealth from the poorest through rent, student debt, housing debt, medical debt, vehicle debt and maintenance (because in 99% of the US you cannot exist without a car).
Billionaires spend big to block public transit [2]. Why do you think that is?
[1]: https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-...
On the other hand you propose the government should manage housing construction and administration.
It's strange to be both pro- and anti-government intervention.
Maybe you are saying local govts are stifling new housing starts, while state/federal govt should step in?
It's strange to claim you either have to support or oppose all types of government intervention. There is nothing unreasonable about supporting what you view as good types of intervention while opposing what you view as bad types of intervention.
Making housing unaffordable = bad. Making healthcare accessible and affordable = good.
Why on earth would you think yo uhad to support the government either 0% or 100% and nothing in between?
It reads like an attempt at hypocrisy baiting because you didn't like what I had to say, not that anything was actually wrong with it. I could be reading that wrong but Ithat's how it reads.
Kamala is talking about grocery price controls (and calls it gauging laws). However, this is a dubious proposition given that the grocery retail industry is notorious for slim margins 1 - 1.5% profit margins. Like what the hell is this going to accomplish, other than create shortages in some areas?
It’s dumb. I don’t know who in hell is giving her economic advice, but they need to fire whoever the hell he or she is.
The simple fact of the matter is that vendors will sell their product anyway. It takes time to bring product to the market and most food is highly perishable. To the extent that the US subsidizes agriculture, there's absolutely no excuse for gouging during emergencies.
So she's trying to imply price gouging laws would bring down inflation. When people talk about inflation they mean a national economic trend, they don't mean a very transient increase in the price of goods during an emergency, such as hurricanes, etc. Also, during emergencies, there is not much gouging in groceries (she heavily implies she's addressing grocery prices), but rather in other goods (plywood, fuel, generators, etc).
Is the US in an emergency situation regarding grocery prices? Has a hurricane hit the entire country at once?
PS - NYC instituted rent control in 1943 as an "emergency" remedy during WW2.