This seems like too short-term a study. The argument against artificially holding prices down is that people won't produce as much as they would otherwise and people won't be able to get the thing they would otherwise buy. So what we're predicting a rent control policy will do is cause a shortage of rental accommodation in the area.

Now how that expresses itself in an accounting sense, who knows (probably the economists). Good question to study. But I doubt the impacts of rent control would appear in the market this quickly, it'd take years for the market signals to be measurable. Initially rent controls will probably be set near the previously ideal market price, I'd guess there are a lot of 12 month leases and housing construction projects probably don't reset that quickly either.

IMHO, the problem now is bad zoning. The rich car-centric suburbs are preventing denser housing- to their own financial detriment. A recent fight is that the state has forced them to allow higher density housing around commuter rail stops. Similar fights about rail trails, future abutters are afraid of change but they are valuable everywhere they exist- in that they are a desirable feature and raise your house's value.

Another problem is that they overbuilt $100/sqft bio-lab space. These are sitting empty, and the owners refuse to lower the rent.. I don't understand how the owners remain solvent.

Their rent control used to have no exemptions, but now it's become very similar to SF rent control. Strict limit on how much rent can go up for current tenants, but can reset close to market rate when there's a 'just cause' vacancy. And all buildings built after X date are exempt entirely. (X=2004 in St. Paul, X=1979 in SF). Developers argued that any rent control at all limited their ability to finance housing projects.

I think results of studies like this were hugely influential to the changes in rent control that followed.

Let's just do away with regular renting. Either provide the full service of a serviced apartment, or provide a rent-to-own scheme. In both cases, landlords have incentives to improve the condition of units for better price. In the former case, no equity is built, but you get a much better service, and in the latter case, renters can build equity. And if renters decided to back out halfway, they can sell the paid up equity back to the landlord, some other renter, or to banks who have the capacity to manage the numerous transactions that will happen.

https://news.ycombinator.com/item?id=48524204

Don't use Twin Cities property values in the early 2020s to draw conclusions about anything related to policy or economics. What you're actually measuring is the after shock of race riots.

Also, RHAWA is a landlord lobbying group.

If the construction strike by commercial investors is replaced by public housing then the better outcome can emerge.

I guess I struggle to see how that's controlling enough variables over a long enough time span to be meaningful.

You can almost hear yakitty sax playing in the background. I bet if you met the researchers you could honk their nose.

This to me is the big one. So in addition to rents being more affordable (even if wealthier renters capture most of the gains) limiting the rental market profits also makes houses more affordable to buy? The paper is trying to argue this is bad, but I’m not seeing it.

It’s almost like “rent-seeking behavior” is a negative pejorative of an actor’s actions that negatively influence the market.

> Similarly, we need to consider any one-time confounding events in control cities. Most notably, Minneapolis would be a natural control for St. Paul. However, in addition to the ballot measure on rent control, Minneapolis’s ballot also included referenda on mayoral power and policing. These confounding events mean that if property values in St. Paul changed relative to Minneapolis, we could not attribute the change to rent control.

their mistake is that they excluded Minneapolis for a bullshit reason here. you might as well do the analysis and then tell us. of course, they did, and found all the same effects as st. paul despite no rent control, so they chose not to talk about it.

> Over the nine months following the passage of rent control in St. Paul, Minnesota in 2021, average property values fell by 4.4% to 5.8%.

Why is this bad? Pretty much every Western society has fallen into the trap of raising property prices as a politcal imperative. People who own 1 (maybe 2) homes believe it's good for them but it only benefits very wealthy people who hoard land.

The real problem is that ever-increasing property prices destroys the fabric of society. It's a wealth transfer from the next generation to older and wealthier people that creates a drain on their entire lives. It's justified by people arguing the current young people will be able to do that to the generation after them. But this can't go on forever.

Want to know why eating out is so expensive? Why third spaces have disappeared? Why basically everything has gotten expensive? it's housing prices. Commercial rent is an input into everything that you buy. Higher costs mean higher wages that need to be paid, which is also an input into everything you need to buy. And the only one who is winning out of all of this is the landlord. If the commercial rent is too low well then it'll get torn down or converted into residential real estate because that's more profitable.

You know who realized this? Xi Jinping [1]:

> Houses are for living, not for speculation

So the Chinese property speculation bubble was quietly popped a decade ago and Chinese real estate has been in a severe and prolonged recession ever since as the market corrects. What's funny is media coverage points this out like it's a problem. It's not. It's intentional.

And if you think that's a purely socialist/communist idea, tell that to Adam Smith [2]:

> As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed and demand a rent even for its natural produce.

He had this in common with Mao [3].

So if Marxists, Leninists, Maoists and capitalists all agree that landlords are parasitic, what are we doing?

There's a British former wealth manager and economist named Henry Fudge who has done the math on how the housing market is a "rentier black hole" (as he describes it) on the UK economy and has hollowed out manufacturing as an inevitable consequence when returns on housing exceed all asset classes. It becomes a self-fulfilling prophecies and housing enjoys significant tax advantages and government protections. He calls it The Housing Theory of Everything [4].

Rent control is a bandaid. The solution here is for the government to become a significant provider of housing, as is the case in Vienna [5] and to stop treating housing as a speculative asset. Attacks on rent control are generally a thinly-veiled effort to increase landlord profits however.

We're rapidly re-inventing feudalism here with 1 (and soon more to come I'm sure) trillionaire who will increasingly hoard all the land and assets, leaving the rest of us as impoverished tenant workers who own nothing. Most call this neofeudalism for this reason.

[1]: https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for...

[2]: https://www.prosper.org.au/geoists-in-history/adam-smith-on-...

[3]: https://thirdworldtruth.medium.com/not-just-mao-but-adam-smi...

[4]: https://henryfudgeofficial.substack.com/p/the-housing-theory...

[5]: https://www.theguardian.com/lifeandstyle/2024/jan/10/the-soc...