Merc sweeps it under the rug
The Merc blithely continues its practice of tilting its housing coverage in a way that silences counter-narrative facts. Last week, our paper of record's most recent story on rent control initiatives in the Bay Area refused to acknowledge the most salient fact: There's consensus amongst economists and housing experts that rent control actually decreases housing affordability. We daylight what the Merc hides.
Economists agree rent control doesn't work
In 2012, economists were polled with the following question:
Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them.
Eighty-one percent of them disagreed.
--Foundation for Economic Education
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Rent control undermines the benefits of zoning reform
Case study SF: Rent control is always going to disincentivize housing construction, regardless of how tight or loose the zoning code is. Repealing zoning restrictions will allow for more housing. It will also make the supply-killing effects of rent control all the more apparent and relevant.
--Reason mag
Argentina got rid of rent control. Rent prices plummeted
Since Millei's repeal of rent control laws took effect on December 29, the supply of rental housing in Buenos Aires has jumped by 195.23%, according to the Statistical Observatory of the Real Estate Market of the Real Estate College (CI).
The debate over rent control is not specific to Argentina. In the U.S., where housing affordability is a major issue, the Argentine example is drawing attention. The libertarian Cato Institute in Washington D.C. pointed out that Argentina's experience shows the inherent problem of price controls, which in the case of housing can both limit supply and worsen affordability problems more broadly.
"Milei cut rent control and other tenancy regulations. The result confirmed economic theory: the supply of rental accommodation is surging, and rents have fallen," said Ryan Bourne, chair for the public understanding of economics at Cato.
--Newsweek
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