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by maxsilver 1762 days ago
> Price ceilings, like rent control, cause a shortage of supply

They don't have to. We've had price ceilings in the US in many places for over 60+ years without ever experiencing a shortage. (In my hometown, for example, education is price-capped, electricity is price-capped, water + sewer are price-capped, natural gas is price-capped. No shortages since the 1950s).

You just have to require reasonable regulations on the industry, and strictly enforce those regulations. Heavy Regulations + Price Ceilings is the magic combo for success, more or less.

2 comments

Everything you mentioned "has" to work, day in and out. If gas or water would go out, the local government would be out with the first elections. So they have a very strong incentive to make it work with public subsidies.

Whereas the politicians won't care that a large percentage of would-be new residents for their city can't get in and have to commute. In fact, it's a perverse incentive: the locals love the lower rent, and there is no one to vote out the politicians that like rent controls.

> Everything you mentioned "has" to work, day in and out.

Agreed, but this is true of housing as well. Housing "has to" work, or you end up with a huge commuting and homeless population (and the state of being homeless is effectively a crime in the US).

> In fact, it's a perverse incentive: the locals love the lower rent, and there is no one to vote out the politicians that like rent controls.

It's not perverse, it's a good incentive. Locals love lower rent from rent control, so the commuters who don't have it should be incentivized to also vote for rent control, and it's a great idea that should continue to spread. In a ideal world, every rental unit in the nation would be under a strict rent control (just like how power/water/sewer/natgas often is).

And like the people in musical chairs without a chair when the musics stops, if you don't have an apartment at that time, you are out of the game. No roof for you.
Why should newcomers to a city be forced to endure long commutes just because they happened to be born in a different part of the country? We have the capability to let everyone who wants to live in those areas do so. I see no reason that the privileged minority that already lives there should get to dictate that for everyone else in the region

Not to mention, designing metro areas to require long commutes basically amounts to climate arson

Everything you listed works with price caps because they are effective monopolies. Usually a single entity in an area is responsible for providing that service and its profits are heavily regulated.

Housing is completely different for many reasons, primarily:

1. Housing isn't provided by a single entity, it's a market that a majority of people will participate in. All of the things you listed are one-to-many, not many-to-many.

2. Difference in quality for different price points. You either have electricity or you don't. You either have natural gas or you don't. This is obviously not the case with housing where there are limitless price points and differences in quality. Unless you're suggesting that the government build all homes, this won't work.

3. You want the effects of the market to drive development and settlement. Manipulating the prices of NG has little consequence outside of providing a steady supply to the users. Manipulating the prices of housing won't allow development to fulfill market demands in price point, location, etc...