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okaycuckoo

Rent Control

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Ah, Chris Dillow - a left libertarian with a constant flow of good thinking:

However, I don't think it follows that there is a case for such controls. For one thing, they have perverse redistributional effects: stories of New York millionaires living in mega-cheap apartments aren't wholly apocryphal. And for another thing, there is a massive difference between there being an optimal rent control in theory and governments having the wisdom and honesty to implement it in practice.

A far better policy to reduce rents would - of course - be to massively increase housebuilding. But the power of the home-owning lobby seems to rule this out.

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2013/08/a-case-for-rent-control.html

For ref, here's Adam Smith on building rent and tax on that rent (v.2.67 & 70) - bloody communist!

A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be any thing very unreasonable. It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.

http://www.econlib.org/library/Smith/smWN21.html

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Rent controls are a stupid idea. Always have been and always will be.

Either they will be:

- Set too high, which is pointless (ie. it does nothing).

- Set just right, which is what the market should figure out anyway.

- Set too low, which will constrain supply, leading to shortages.

Price fixing just doesn't work.

As for taxing land, it is thinking about it the wrong way. It isn't about taking a 'fair share' fro the rich, it is about those who are monopolising land (read: locations) compensating those displaced by their actions.

Someone drawing a metaphorical line around some land then declaring it is 'theirs' in perpetuity, is hardly a strong claim on ownership. If it was at the expense of killing/turfing off the previous users, even less so.

Communities should grant the right of someone to monopolise some land, not the reverse.

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Land 'owner' dictates how the community accesses the land.

I still don't get the distinction on how land rights are monopolised.

Anyway - I quoted Adam Smith to show that a drag on land rents has historical pedigree for true conservatives. I can't include the Tories (or UKIP) in that category by any measure.

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Rent controls are a stupid idea. Always have been and always will be.

Either they will be:

- Set too high, which is pointless (ie. it does nothing).

- Set just right, which is what the market should figure out anyway.

- Set too low, which will constrain supply, leading to shortages.

Price fixing just doesn't work.

As for taxing land, it is thinking about it the wrong way. It isn't about taking a 'fair share' fro the rich, it is about those who are monopolising land (read: locations) compensating those displaced by their actions.

Someone drawing a metaphorical line around some land then declaring it is 'theirs' in perpetuity, is hardly a strong claim on ownership. If it was at the expense of killing/turfing off the previous users, even less so.

Communities should grant the right of someone to monopolise some land, not the reverse.

I dont know. Its such a messed up market its hard to say whether the effects would be negative or positive. For example, i would tend to be in favour of road privatization, but for the fact the planning system makes it basically impossible to build more roads. So monopolies and price gouging would likely result. Same with housing, maybe its not perfect, but anything that prevents price gouging cant be all bad.

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I dont know. Its such a messed up market its hard to say whether the effects would be negative or positive. For example, i would tend to be in favour of road privatization, but for the fact the planning system makes it basically impossible to build more roads. So monopolies and price gouging would likely result. Same with housing, maybe its not perfect, but anything that prevents price gouging cant be all bad.

If you are not going to have rent controls and also not do something increase the elasticity of supply so the market can respond to price, then one should at least consider house rationing. No more holiday homes and large BTL portfolio's to be broken up and sitting tenants given first option under a private Right To Buy.

I wasn't aware of this but the French instituted some rent controls in large towns and cities a few years ago, not sure how successful those were.

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Rent controls are a stupid idea. Always have been and always will be.

Either they will be:

- Set too high, which is pointless (ie. it does nothing).

- Set just right, which is what the market should figure out anyway.

- Set too low, which will constrain supply, leading to shortages.

Price fixing just doesn't work.

As for taxing land, it is thinking about it the wrong way. It isn't about taking a 'fair share' fro the rich, it is about those who are monopolising land (read: locations) compensating those displaced by their actions.

Someone drawing a metaphorical line around some land then declaring it is 'theirs' in perpetuity, is hardly a strong claim on ownership. If it was at the expense of killing/turfing off the previous users, even less so.

Communities should grant the right of someone to monopolise some land, not the reverse.

Agreed. If we want rents to come down we need to abolish planning restrictions and all the associated taxes so as to increase supply.

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I wasn't aware of this but the French instituted some rent controls in large towns and cities a few years ago

last year

, not sure how successful those were.

Not very

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I wasn't aware of this but the French instituted some rent controls in large towns and cities a few years ago, not sure how successful those were.

News to me as well.

Quick google gives this:

http://www.metropolitiques.eu/Rent-control-a-miracle-solution-to.html

Hmmm. I reckon the UK is not as immune from euro influence as it pretends. Watch that space.

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I still don't get the distinction on how land rights are monopolised.

Anyway - I quoted Adam Smith to show that a drag on land rents has historical pedigree for true conservatives. I can't include the Tories (or UKIP) in that category by any measure.

You have two main ways in which land use can be organised:

1. Someone claims to own said land and demands that everyone else pays rent in order to access it.

2. No one claims to own said land and anyone who wishes to use should compensates others who are then unable to use it.

As claims of 1 are weak at best (got their first and/or used violence to throw other users off it etc), 2 should be considered. Locations existed prior to usage (or humans, in fact) so no one can claim the mixing of labour with some raw material to create a location.

That's not to say that people can't claim a plot of land in 2, it just means that if they do, they should realise that others have had to sacrifice access. In other words, others need compensating in some way.

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You have two main ways in which land use can be organised:

1. Someone claims to own said land and demands that everyone else pays rent in order to access it.

2. No one claims to own said land and anyone who wishes to use should compensates others who are then unable to use it.

As claims of 1 are weak at best (got their first and/or used violence to throw other users off it etc), 2 should be considered. Locations existed prior to usage (or humans, in fact) so no one can claim the mixing of labour with some raw material to create a location.

That's not to say that people can't claim a plot of land in 2, it just means that if they do, they should realise that others have had to sacrifice access. In other words, others need compensating in some way.

One thing which is often overlooked is that some rent controls in the UK already exist in the form control on rent increases for housing association properties.

http://www.adviceguide.org.uk/england/housing_e/housing_renting_a_home_e/renting_from_a_social_housing_landlord.htm

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One thing which is often overlooked is that some rent controls in the UK already exist in the form control on rent increases for housing association properties.

http://www.adviceguide.org.uk/england/housing_e/housing_renting_a_home_e/renting_from_a_social_housing_landlord.htm

Infact, I'd argue that the very existence of a social housing sector indicates that not only can rent control work but it's at least in some cases necessary.

Affordable rent

Affordable rent is a type of social housing provided in England by social housing landlords.

The rent is called ‘affordable’ but it is a higher rent than would normally be charged for social housing. The landlord can charge up to 80% of what it would cost if you were renting the property privately. The extra money from affordable rent homes goes towards building more new social housing.

In most cases, tenancies on affordable rent terms are granted by housing associations. Where the landlord is a housing association, the type of tenancy granted is either an assured or an assured shorthold tenancy. In some cases, a local authority may grant a tenancy on affordable rent terms. Where it does, the tenancy type is either a secure or a flexible tenancy.

An affordable rent can be increased once a year. The maximum amount that an affordable rent can be increased by is Retail Price Index (RPI) + 0.5 %.

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