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by holograham
4112 days ago
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While this post has some good points it lacks an understanding of capitalism. Mainly that the prices charged are in relation to what the market can bear and NOT just what the costs are. A real estate investor is (just like any investor) is looking to maximize profits based on 1. What tenants can afford and 2. What competitors are charging. Raising rent only works if there are customers willing to pay the increase which is affected by the supply of housing in the same area. This specific case the tenant raised prices to boot an renter under rent control so its really just a perversion of the rent control law (and another great example of how it doesnt work). When the answer to regulation is more regulation you start seeing an infinite loop. Laws developed -> entrapenuers figure a way around them -> new laws created -> new loopholes found -> repeat |
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I'll start by saying that I do believe that capitalism is pretty much the best we have right now, and has allowed for greater prosperity than other economic systems up to this point.
However, I do think that the public good needs to be taken into account and act as a balance for capitalism sometimes. Housing is a good example for this, as I don't believe the public good is served by allowing property owners to charge as much as they can. Call that socialist if you want; so be it... I do have some socialist leanings.
If we were to repeal rent control tomorrow, rents would shoot up across the board. Formerly rent-controlled apartments would see their rents go up like crazy. Formerly non-rent-controlled apartments might see rent increases slow, but they would almost certainly not drop, at least not for a year or two. Demand is still high (and is still getting higher), and the bay area increasingly houses people who really want to live in SF, and are able to afford higher rents. SF is limited in land area, so, without a massive increase in the housing supply, we're limited in population expansion. With the average & median rent increasing, many people at the low end will be displaced. SF will become a place where only high earners can live, which means most service workers will need to move out of the city and be bused in, or drive, or just fail to find jobs due to lack of transportation options.
That last bit is an example of why I think the public good needs to (through regulation) balance out capitalism sometimes. Lower-income people being unable to live in SF is IMO a bad thing. Increasing the number of cars/buses on the road is a bad thing; causing people to live farther away from their jobs is economically wasteful. Also note that many of the high-income people moving into SF in this scenario will be moving to SF while keeping their peninsula/south bay jobs, further increasing the commute problem.
Definitely agree that regulation and new laws do sometimes form a feedback loop as unintended consequences and loopholes are discovered. But I don't think that's an excuse not to try, because a lightly- or un-regulated market is not going to help, either.