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In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws. Then they got sued by the com
by aorloff 18d ago
In the People's Republic of Berkeley, our City Council patted themselves on the back in March 2025 when they passed similar laws.
Then they got sued by the company that was targeted, and immediately waffled and canceled the ban.
What's insane about all of this is that we also have Rent Control. There is no greater price fixing mechanism than Rent Control. Rent Control ensures that all landlords must seek the highest possible rent, because they are (potentially) tethered to it for life (of the tenant).
So if you create an economic system where sellers never will allow prices to go down, why bother banning price fixing -- its practically baked into the housing code.
- Chinjut 18d agoWhy would landlords not seek the highest possible rent without rent control?
- aorloff 15d agoBecause the higher rent you advertise, the longer it takes to find a tenant
- sophrosyne42 18d agoThey would. But second order effects ensure that this very act leads to the decline of housing prices. These effects being eliminated by rent control makes it the premier anti-tenant policy.
- dataflow 18d agoWhat second-order effects...? Feels like such an oddly opqaue way to talk about them. And how do you ignore the effect of the fact that rent no longer rises during the life of the tenant, making it lower after a while than it would otherwise be...? (How) is it so obvious that that is dwarfed by the second-order effects of uncontrolled rent that it doesn't even warrant a mention? Because it isn't to me.
- lotsofpulp 18d agoPrices are a signal, and price changes are how market participants can determine which way supply and demand curves are moving. By legislating prices and price changes, the signal is muddied, and market participants cannot take action to match the movements of the supply and demand curves. Prop 13’s property tax rate increase cap is also price fixing. These kinds of laws are mostly ways to enrich and reward those who got or were born somewhere first, and run counter to the vaunted meritocracy that a so called free market can encourage. Edit: The most helpful thing the government can do is maximize price transparency, so the smaller entity can be on equal footing with the bigger entity about which way prices are moving. Tenant agreements should be public record, like land sales are, and that would not only help cops with kicking out squatters, but also give renters more power in negotiations.
- tyre 18d agoWhen people are trying to afford living, “price transparency” is not the most helpful thing a government can provide. I agree that Prop 13 is god awful.
- lotsofpulp 18d agoThese side effects of these dynamics are not going to be evident or resolved in the short term. It took decades for prop 13’s (and other effects) to compound and become visible, and it will take decades to undo. There is no shortcut though, the incentives have to be set right, and there has to be patience for the results to show. Unfortunately, long term benefit at the expense of the short term is a core weakness in democracy.
- rcpt 18d agoI don't think that's true. Prop 13 for example is priced into the market. Buyers bid higher because their taxes are frozen. This doesn't take decades to correct. Market reactions are instant. Once the policy is fixed we don't have to wait for a generation
- Aurornis 18d agoUnder rent control the highest possible rent is set by laws. If you fall behind on the allowed rent increase you’re usually not allowed to catch up to market rate later, such as when your tenant leaves and you put the unit back on the market. So to avoid getting stuck at below market rate with no legal way to catch up, you have to take the maximum allowable rent increase every year. In some situations it’s better to leave a unit empty and wait for someone be willing to rent at the rate than it is to lower rent, because the consequences of lowering rent will stick with the unit for years. Without rent control, rents can be kept constant, moved up, or moved down without having to consider the consequences for years to come. The ceiling is set by the market rate, but there isn’t a function driving all of the landlords to raise by the annually permissible maximum so they try to discover it instead. Rent control is instituted in cities that have constrained housing supplies, so the demand is there. Landlords switch to raising rents in unison by the maximum allowable amount every year because that’s the only way to operate.
- tyre 18d agoI live in NYC, which has rent control, and the idea that a landlord would otherwise lower rent is hilarious. Landlords raise rent by the max allowed because they can. There is no “catch up” because the purpose is to protect renters against huge jumps. I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent. You can own property to rent out, but in a city with a tremendous shortage of housing, you need to rent it out. I lived in a building with affordable housing units and management decided they would rather not rent them out at all. Horrible.
- Aurornis 18d ago> I think rent controlled units that sit empty should be subject to a tax based on an escalating percentage of the market rent They would just be taken off the market and then relisted later. Forcing people to rent their properties and also forcing the price isn’t something I can get behind. People need to be able to choose what they do with their property.
- 18d ago
- jeffbee 18d agoThe market is 2-sided. They can "seek" whatever they want but they are going to get the clearing price.
- s1artibartfast 18d agoYou might prefer to have the vacancy filled faster rather than waiting for the highest possible price. These algorithmic pricing cases kind of revolve around this concept. It is the value that the service provided the companies. Landlord input a desired vacancy rate or time on Market, and service suggests the right price.
- seanmcdirmid 18d agoWith rent control, you are limited in how you can increase rent later, so it’s to your benefit to let the apartment sit vacant longer until you get a desirable rent. Without rent control, because you can just increase rent next year by whatever, you can rent it at the market rate right away without waiting.
- smitty1e 18d agoTL;DR => Sowell, "Basic Economics".
- stymaar 18d agoA.K.A creationism for economics.
- seanmcdirmid 17d agosupply and demand is about as basic as things get, and its never been proven wrong.
- smitty1e 10d agoBut truth rarely stands in the way of politics.
- petesergeant 18d agoEvery rental unit in the city I live in is rent controlled — the government sets a maximum rental increase per unit per year. This is here in the People’s Republic of … checks notes … Dubai. It works great.
- oopsieDayz 18d ago[flagged]
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- gfdhjd3 18d agoThe Dubai rent control system has some important differences compared to Berkeley. Dubai’s rent change is indexed to the rental market but Berkeley’s isn’t. Berkeley’s max change in a year is like 1% while Dubai’s could be as high as 20% in some cases. Also, in Dubai if the owner wants to sell and not renew the lease they can. In Berkeley it’s not nearly so simple. I would not want to be a landlord in Berkeley.
- jeffbee 18d agoFun fact: in RealPage's brief about the Berkeley law they cited my work that shows rents in Berkeley declining. They never had the power to artificially set rents.
- taurath 18d agoThere are arguments against rent control as an analgesic, but it being a disincentive for landlord/investor altruism isn’t one of them.
- aorloff 15d agoThe primary argument against Rent Control is that it leaves tenants worse off. Look at the places without Rent Control that have adopted a pro-housing development stance - rents are declining ! But, that doesn't keep a large staff of people working for the rent board at the expense of the local housing economy