bsbbtnh t1_j7i271u wrote
Reply to comment by ManhattanRailfan in Federal court upholds NY rent stabilization laws, setting up possible Supreme Court showdown by ER301
> Except that's demonstrably not true. Rent regulation has never been shown to have a detrimental effect on the rate of new construction in any city where it's been implemented.
And yet removing rent controls leads to more construction.
>Building on the existing literature, the purpose of this study is to estimate the effect of rent control and its evolution over time on housing construction in the Bay Area, and in particular, in Berkeley, California. Our approach is a macro analysis, using place-level data over time for both rent-controlled and non-rent-controlled communities. In particular, the case study demonstrates how major changes in rent control rules following the statewide Costa-Hawkins Rental Housing Act in 1995, contributed to faster supply growth in the ensuing years for rent-controlled communities.
>The vast majority of economists agree that artificially controlling apartment rents acts as a price ceiling that reduces the supply of housing over time. While the precise nature and severity of rent control are important factors, empirical studies have found numerous ways that rent control can reduce housing supply.
>...
>RCG’s case study examined the impact of rent control and its evolution over time on housing construction in the Bay Area. More specifically, our research considered how the change in rent-control rules following the Costa-Hawkins Rental Housing Act in 1995 affected the growth in housing supply in rent-controlled cities, including Berkeley, as well as Oakland, San Francisco and San Jose. Even after accounting for employment growth, density, rent growth and local place-specific factors, the supply of housing in these rent controlled cities grew faster following the loosening of rent control rules than during the period of more restrictive rent controls. This result was statistically significant, even though newly built units were generally not included in local rent control ordinances during the pre-Costa-Hawkins period. In addition to the change in the nature and severity of rent control rules (the shift to vacancy decontrol and statewide exemptions for new construction and single family homes), we believe that uncertainty regarding the potential for future changes to local rent-control policies was an important factor that limited development in the pre-Costa-Hawkins period. The statewide legislation provided greater certainty for developers, investors and lenders, factors that bolstered housing construction in rent-controlled cities in the ensuing years.
ManhattanRailfan t1_j7i4wg0 wrote
NAHB? This is like citing a study by BP to say that climate change isn't real. Of course the parasites that are collecting rent aren't going to want rent control.
Also the problem with this case study is two-fold. 1, Costa-Hawkins passed in 1995, right when cities all over the US were going into a growth period with massive amounts of investment and construction. In fact, more housing was built in 1990, 91, and 92 than. In 1995 or 1996. 2. Clearly, it hasn't solved the housing affordability crisis because SF remains the first or second most expensive city in the country, and the rest of the Bay Area isn't much better.
The primary factors behind a lack of construction in NYC are zoning, NIMBYs, and high upfront costs. The idea that rent regulation is even a factor, especially in as-of-right construction with no mandatory inclusionary housing, is quite frankly, asinine.
bsbbtnh t1_j7muohr wrote
Presumably you have some studies which say rent control doesn't have an impact on new construction?
ManhattanRailfan t1_j7mwg3r wrote
And an article for slightly easier comprehension.
In fact, the only articles that I could find that claim rent control decreases construction were published by developers and parasites landlords themselves. Not exactly an unbiased source. And basically all of them cite that single Bay Area case study that you did. And case studies aren't good evidence of a trend or causation. Only that something is a possibility.
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