alt Hacker NewsThe current cohort of renters wins. All future renters lose, because the rent-controlled apartments are never re-leased. People sit on them forever.
Price ceiling is the surest way in economics to create a shortage.
The current cohort of renters wins. All future renters lose, because the rent-controlled apartments are never re-leased. People sit on them forever.
Price ceiling is the surest way in economics to create a shortage.
Why would they sit on them?
Surely they are more likely to sell if they can never be leased profitably? This would put that capital to better use.
Your assumption there is also that the class of ‘renters’ is homogenous and wants to rent. In some cities there is a significant class of people who are forced into continuing with renting because of supply constraints on homes for sale, which are exacerbated by landlords with superior access to leverage buying up stock and pushing up prices. In this situation the landlords actually create their own market.
A comparative shortage of rental properties and of landlords could be very desirable, as it implies more owner-occupiers.
It also implies more capital flowing out of real-estate and into productive industry, which one would assume is also desirable for a thriving economy.