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Comment by fennecfoxen | Hacker News Reader

I know!! Have you tried to get an apartment there recently? I swear, there'll be something like 50 couples standing in line to view a rickety, old, drafty, minuscule 1-bedroom, at a price that they can barely afford even if they are working for Google. It's INSANE.

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Yeah, rent control is bad for Googlers trying to move in to SF, especially on short notice. But it's good for locals who already live there, who are not standing in line for flats, because they already live in them. How you weigh ease of moving in vs. stability for long-time tenants is more of a public-policy than economics question initially, and depends on how you assign utility (though economic analysis can help you maximize utility, once you've assigned it). A pure unrestricted market is already making an ideological decision that stability of people's current living situations should be valued as having zero utility, which not everyone agrees with. If you assign some kind of non-zero-but-not-infinite utility to that, then it's likely neither an unrestricted market nor a classic rigid rent control system will be utility-maximizing, and instead various hybrid schemes may be preferable.

One scheme used in some European cities is to let the prices float freely, but kick in a subsidy for existing residents when rent in an area increases by more than a certain % of their salary, softening the impact of market shifts on neighborhood turnover. This of course has the impact of increasing prices for newcomers relative to a situation where such a subsidy didn't exist, because fewer existing residents will be forced out due to rent increases, thereby freeing up fewer empty apartments for newcomers to rent. But that's the goal of the program, to reduce the number of existing residents unwillingly forced out of their neighborhood by rent increases, by shifting the margins a bit. With some kind of actual quantitative assignment of utilities it'd be possible to rationally design a subsidy program that buffers the impact of large changes without neutralizing them or setting up a long-term two-tier market (for example, subsidies can cover less than 100% of increases, and phase out over time).

Yeah! We should artificially push the price of rentals down, so that there will be no incentive to increase supply, ever.

I can't see any problems with this plan.

Well yeah, but in places like SF and NYC, supply is limited by available space. We could house people in 6x6 cubes in giant rectangular buildings to be really efficient, but nobody wants that. So what do you do when your supply is limited, and the poor and middle class are being pushed out of your city?

I'm all for bulldozing the Mission right after bulldozing Cupertino for high-density cubes.

Cupertino already is fairly high-density, at least downtown. And I don't think anyone suggested bulldozing anything, just allowing people to build what they want, which they currently have a very hard time doing.

Supply isn't held back by lack of pricing incentive, it's denialist zoning restrictions

There's massive incentives to build in and around london. Its just getting the land thats the problem.

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