[Gigachad]

Rent control is about as useful as solving climate change by drawing a lower number on the screen of the thermometer.

Rents are a product of market conditions. You have to solve those conditions rather than try to stop the output from changing. Fixing the rent results in supply dropping off so the supply/demand equation is still met.

[oezi]

In inelastic markets such as housing some form of government control can prevent excessive market distortions.

[imtringued]

There is a misconception about private property. People think they work and then the thing they have is private property for free. As if private property only has a physical manifestation in the form of a product. Private property is a physical object plus the services provided from the institution we call private property. This means that private property is protected by the judicial system. It is protected by the police. It is possibly protected by neighbours watching over the neighborhood. It's value may be a function of the value of adjacent property. If you consider unavoidable positive externalities as a positive aspect of private property, then those positive externalities are also a service provided by the private property instituion. In fact, governments build utilities and road networks, they protect the land through a military force. The government does a lot of things to make your land valuable. Then there is the community surrounding your property, the businesses providing jobs and shops selling products, your neighbors, etc.

When I think of private property I not only think of the object itself but also a stream of public services for which you barely even have to pay something. If you are a landowner you could now come up with the idea of selling the public services. The revenue that this process produces is called ground rent.

Is the market distorted by the landowner who is basically just selling free services from the government or is it the government that makes these blatant gifts paid for with taxes unrelated to land ownership?

Manipulation of rents will not reduce those public services, the value of the land remains.

[parineum]

If the market is inelastic, why does construction ebb and flow?

[oezi]

Inelastic just means that it takes more time for supply to match demand or demand to match supply than in a more elastic market.

Ebbing and flowing is a typical effect of inelastic markets.

[parineum]

Inelastic means consumers buy the same amount of some good regardless of the market. That means there's a constant demand.

This is not the case with housing, at least in a local area. Prices go up, people move away and demand goes down. That's elastic.

If housing suddenly cost 10 billion dollars a day in Manhattan, the city would be a ghost town tomorrow. Elastic.

[oezi]

Elasticity of a market is a scale. Elastic markets quickly adjust demand or supply while inelastic markets require a lot of time if they change at all.

Housing on the supply side is relatively inelastic when compared to other markets. Even if demand is high it might not quickly lead to new construction.

On the demand side the market is also relatively inelastic as moving has a lot of friction compared for instance with not making a luxury good purchase or postponing a holiday.

[refurb]

Yup. You can’t be “half in” the market. You’re either entirely in or not. Otherwise every intervention just squeezes the balloon and it bulges somewhere else.

The problem is a lack of housing. You either live with higher prices (reduced demand) or increase supply.

Everything else is just a shell game.

[JKCalhoun]

Maybe the lack of affordable housing?

I mean if you own a parcel of undeveloped land are you going to build a small mobile-home park or expensive condos? One of those two is going to make you a fantastic profit.