On ballots that went out last week, voters have two choices to make to determine the future of Seattle’s newest plan for housing.
The first is whether the developer should be funded at all. The next choice — regardless of the previous answer — is how.
Option 1A is with a new employer tax on all salaries over $1 million a year. Backers hope the 5% tax would raise as much as $50 million a year to be spent on buying and, eventually, developing housing that would be cost-controlled and owned by taxpayers.
Option 1B is to fund the developer with $10 million a year in existing city funding — specifically the city’s JumpStart tax on large corporations in Seattle.
Yes.
I do mean that.
The main reason most economists offer to justify being against rent control is that it will drive supply down, ie, disincentivize new construction.
Well guess what?
We currently, and have for the last decade, exist in a world where the capitalist ‘free market’ has … not built anywhere near enough new homes, muchless affordable ones.
That is typically a situation that is referred to in other markets, other realms of the economy, as a market failure, which can only be remedied by significant government intervention.
… We are already in the situation that most economists fear would arise from rent control.
The reality is that the overall economy will just keep draining more and more money via literal rent seeking to the wealthy landlords, until more and more people become homeless or impoverished.
The government absolutely can use emminent domain if it wants to. This only harms extremely wealthy people, and the benefits to the masses, and the actual real economy, massively outweigh the harm.
Give poor people more money via lower rents, they spend it, velocity of money increases, virtuous cycle, economy grows.
Don’t do this, and you get greedier and fatter dragons hoarding more and more money, velocity of money tanks, mass suffering intensifies.
Even Adam Smith, the ultimate grandfather of all modern, western economic theory, really did not like landlords.
Mao’s solution was murder all the landlords.
Smith’s was tax the shit out of the wealthly, unproductive landlords.
I strongly suggest that if you don’t do the latter, more and more people will begin to advocate the former.
… Also this survey is from 12 years ago, run something similar nowadays, in our current completely broken housing market, and I’d bet a significantly greater proportion of economists would be friendlier toward rent control.
Ok so you knowingly want to follow a program you know will not work?
Mao was an idiot economically speaking.
The science behind that survey hasn’t changed. At no point has rent control increase housing in the long term.
We can do what this article suggests and construct social housing as that doesn’t have an absolute shitload of evidence that suggests it is a bad idea like we have for rent control.
The MHA / MFTE program that Seattle has had in place for almost 30 years is, imo, the right framework, but needs to be dramatically upscaled.
It basically is a two option system:
Option 1: Landlords pay a tax upfront that goes toward the funding of your favored social, low income housing.
Option 2: Landlords avoid this tax but willingly agree to a percentage of their units being rent controlled.
This is a good framework, the problem is the numbers aren’t there.
You need a larger percentage of a building’s units to be rent controlled, you need those rent controls to further and lower rents more, you need the other option’s upfront tax to be much higher so as to throw 10x, 100x, 1000x of this pithy $50 million at building low income housing, and probably you also need to expand the MHA / MFTE guidelines to apply to more residential properties than it currently does.
If landlords don’t accept this, fuck em, option 3 is the city emminent domain buys your building for pennies on the dollar and turns it into low income housing, like what happened when I5 came through or any other number of public works bought up land.
Hey, while we’re at it, pass another law that says if you have a home on the market, or unrented apartment, you legally have to lower the price some amount for every month its just vacant, or work in a tax on the home seller/apartment owner that increases logarithmically for every day on the market, something like that.
Huge problem in the housing market right now is everything just sits there, being theoretically worth the asking price (which in reality is being price fixed by computer systems landlords use to keep prices climbing, don’t see you complaining about that) until finally a rich buyer shows up.
Fuck that. If you can’t get a tenant in a rental unit or a buyer into a house, tax the listing seller, the apartment opening, for every day beyond 30 for an apartment or 60 for a house.
That’ll incentivize people to price things more reasonably.
Do something similar with vacant office space, jam up the cost of that untill they start getting converted into apartments (and subsidize/incentivize that!), or lower their prices such that a commercial tennant moves in.
You keep asserting rent control will being rent down that has never been the case. Rent control only makes rent more expensive. That’s why you see such consensus.
Rent control actually always brings down rent prices in the affected units, this is widely agreed on.
It makes non affected units marginally more expensive, and the other widely agreed on malefects are that people in rent controlled units don’t leave as often, and that landlords skimp on maintenance, evict people more frivolously/baselessly, and disincentivizes new construction.
So throw on better tenants rights / eviction protection, crack down on maitenance skimping landlords by making a city hotline / web portal for residents to make complaints to directly, have an actually funded and staffed enforcement agency for that (take away some police funding and move it to that)… and then have a reasonable way to avoid incentivize and fund the new housing construction that the free market won’t want to do.
A reasonable implementation of rent control, as I literally just described, is what Seattle has been doing for 30 years, giving certain new or remodelled buildings the option to either pay a tax that goes toward city built/funded social, low income housing, or forgoe the tax but endure a rent control scheme for some of its units.
This approach just needs to be expanded, augmented, increased in scope, increased in magnitude of the low income housing tax and the required number of rent controlled units, and make those rent controlled units even less costly to renters.
Did you read anything I wrote in my last reply to you?
I did and I don’t believe you are correct as average rent in Seattle hasn’t declined as a result of these policies.
Oh cool, thats wonderful, the only thing impacting the housing market that’s changed in 30 years is the MHA MFTE program, the entire rest of the economy just stayed perfectly static.
Population hasn’t grown, wealth disparity hasn’t grown, construction costs are the same, the unemployment rate never changed, zoning laws are the same, the tech sector is still as small.as it was in 96, no neighborhoods have gentrified, covid never happened, nope, everything affecting housing is all down to a single experimental variable and everything else is a control variable.
Did not realize I was actually talking to a clown.
Honk honk!
In a clown because I don’t believe ypu have proven that rent control has worked? If it had rent should have stabilized lower income housing which it did not. There should be more available affordable housing and there isn’t.
You haven’t proved anything. You have made ton of unsupported claims entirely constructed on “trust me bro”. Do you have any idea how any of this works?