Economies have gotten more productive, and this increases the wages of those doing productive things. But, things like providing education, housing, and healthcare aren’t as much more productive. To keep people choosing these careers, wages for these jobs have gone up too. So, ironically, because everything else has gotten so cheap and productive, these basic things have gotten more expensive. Or at least, that is one reason.
Rent control has bad effects, but politically, when a city gentrifies, this can cause rents to raise so fast as to effectively be an eviction. Gentrification is good for creating flourishing urban areas, but it is unfair to the tenants already living there and could lead to political demands to stop the gentrification.
A rent control that slows the raising of rents, gives the current tenants more time until they can’t afford rent, and gives them more time to make more money, while allowing inflation-based rent raises and letting landlords charge market prices to new tenants…may be a net good.
Multi-year rent freezes that allow no rent increases are bad.
Economists on the left and right agree that rent controls are bad.
Rent controls lower rent for those currently in rent controlled apartments. But, they: lower the supply of apartments, decrease mobility because no one wants to move if they have an apartment because it will be difficult to find another one, increase rent in nearby areas, and decrease how well the apartments are maintained. Rent controls help a small group of people and hurt everyone else.
The solution is building more housing, although that is easier said than done.
Construction companies crushed unions, and then hired immigrants instead. Now, the construction industry is dependent on illegal immigrants. Without them, the US won’t build the houses the country needs.
Congress passed a bill designed to lower housing costs, but Trump refused to sign it, saying he won’t sign it until Congress also forces everyone to get a special ID to vote–an obviously unrelated issue mostly based on lies about the extent of voter fraud, which is practically zero.
“The bill contains a number of provisions designed to lower costs and boost housing supply. Among them are initiatives to change manufactured home requirements to lower their costs, simplify environmental review processes for small building projects, and tie certain state and local government grants and funding to housing production goals.
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While the portions of the bill designed to encourage building and unlock new housing funding have broad support, one section of the package could prove deeply divisive.
That provision prohibits many large investors from buying single-family homes and requires others to sell off rental home holdings to individuals after seven years. It has drawn concerns that the rules could end up worsening the housing shortage, especially for rentals, by discouraging future investment in the burgeoning build-to-rent business.
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The bill now heads to the House, where conservative Republicans have raised objections to a variety of provisions, and divisions between the two chambers could lead to an acrimonious amendment process in the weeks ahead.”
“Beginning in 2017, the city began enforcing a requirement that new apartments of 20 units or more include “affordable” housing units, which are rented at money-losing, below-market rates to lower-income tenants.
The results were predictable. Developers shrank the size of projects to avoid having to comply with the costly mandates. Overall, permitting fell.
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It’s certainly true that “funding” inclusionary zoning to offset developers’ losses helps to mitigate the negative impact the policy has on new supply. It would also go a long way toward making inclusionary zoning constitutional. (Critics periodically argue in lawsuits that unfunded inclusionary zoning is an unconstitutional, uncompensated taking.)
Even so, there are still many problems with “funded” inclusionary zoning that make it an inferior policy to simply having no inclusionary zoning at all.
For starters, funded inclusionary zoning does not remove a regressive tax on housing. The tax, in the form of the mandated affordable units, is still in effect. It is just offset by a countervailing subsidy intended to prevent housing production from falling.
Funded inclusionary zoning thus still has a suppressive effect on overall housing supply that must be mitigated with government subsidies/tax breaks.
Instead of spending tax dollars on schools, police, or lowering tax rates, city hall must spend that money just to keep housing production flat. The tradeoff of funded inclusionary zoning then is no new housing and fewer public services (or higher taxes).
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That YIMBY worldview would therefore seem to suggest that housing subsidy dollars should be spent expanding supply even more, not zeroing out the effects of supply-killing affordable housing mandates.
If a city has a housing shortage, boosting housing production, and not tinkering with the mix of incomes in new buildings, would seem to be the priority.”
“Commercial real estate firm CBRE reported in an October 2024 research brief that single-family rental inventory had declined by 1.7 million units since 2016. Investors who own more than 100 homes are also responsible for some 3 or 4 percent of single-family home purchases each year.
The vast majority of homes are owned, bought, and sold by either individual owner-occupiers or small mom-and-pop investors who own fewer than 10 homes.
This is the windmill that Trump and lawmakers of both parties are tilting at.
And even though large investors are not major purchasers of single-family homes, they do provide benefits that would be lost if federal regulation excluded them from the single-family rental market.
A 2022 study by Neroli Austin of the University of Michigan found that institutional investment in real estate increases neighborhood diversity by opening up more affordable rental housing options. That study did find that these investors were raising home prices overall.
Banning institutional investors from the single-family market would reduce the accessibility they provide to renters who can’t qualify for mortgages.”
“The social impact of the housing affordability crisis is huge: fewer marriages, less household formation, lower birth rates, lower economic growth. The prices of stocks and bonds can go up indefinitely with few consequences. But housing is something people need, in addition to being an asset. It is an asset you also consume.”