By that logic, the construction of housing by the private sector would never make rents drop either. There’s no difference whether the government or the private sector does it.
The landlords will still be in competition, anyone who breaks with the conventional wisdom will have an easier time getting tenants. It would probably raise prices, but the laws of supply and demand don’t just go away.
It doesn't because of the constrained housing regime. All marginally available money flows to landlords. Anything that begins to cost less simply raises rents.
I don’t see how it would reduce the power of landlords. If more people want to live in an area than housing can support, rents will increase to whatever level they can sustain to find the equilibrium where fewer people can afford it. If fewer people want to live in an area than housing supports, rents will fall.
Well, instead of companies paying employees money which goes to rent, the city could tax those companies to subsidize the housing instead. That would make similar amounts of money available but the city would have more control over who gets the rent money. Unforeseen consequences abound, I'm just pointing out that rent doesn't have to go up forever.
That is only true when housing supply is unlimited and competition between landlords drives prices down. (In that case, housing stays cheap and there is no problem to solve.)
When housing is limited, excess demand (competition among tenants) already pushes prices above the landlord’s costs. As a result, the landlord pockets an unearned profit.
In such a situation taxing landlords does not change prices paid by tenants because they are already paying as much as the demand side of the market will bear. It just redistributes the profit toward public uses.
Why would you need rent control if you had active building policies that ensured supply kept up with demand? The price of housing wouldn’t change, so there would be no need to mandate a specific below market price.
Eliminating rent control wouldn't do much to lower rents given the relatively small numbers of units. They should definitely end it going forward, though.
Getting rid of rent stabilization, which is roughly half of all rental units in NYC IIRC, would have a huge effect, both positive and negative.
My prediction is that after a few years of adjustment following its end, the average paid rent would be about the same but the average advertised rent would be much lower.
All renters would equally feel the misery of rising rents, so I'd expect the political landscape would be very different with regards to feelings towards building more housing.
A good example would be single family homes in SF. Currently no rent control. If the rent control laws were changed to include SFHs, you’d see a pretty drastic decrease in the value of them, since yes, currently they are valued based on expected future rent increases.
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