“7% plus the Consumer Price Index for All Urban Consumers, West Region (All Items), as most recently published by the Bureau of Labor Statistics, or 10%, whichever is lower.”
I guess the argument is that they will raise rent by the maximum, even at excessive risk of losing tenants? Because if the tenants will pay that much, why wouldn’t the landlord charge that anyway?
Not OP but ill do you one better and link the free online textbook that is used at a number of universities.
Look up “The core Economy 1.0” chapter 11, section 10. Case study on fixing rent prices and the following consequences, along with a step by step diagram.
Never discuss that with anyone who hasn’t studied economics - the same as how we will deliberately reduce GDP to increase the unemployment rate, or sometimes a country is better off by axing a productive market and putting 50k people out of work. They don’t see how and will only take it out on you.
Maybe the point is such a system that only works on numbers is inhumane and should be avoided? Economics people want to argue within economic frameworks which don’t work well if some assumed market conditions don’t exist. I have never seen reality work quite as described when free market breaks down and MNCs control government policymaking
People don’t like applying economic theory because it reminds us of the core part of being human - I only care about myself and will act in a way that benefits me. Even altruistic people act as they do because they want to disadvantage themselves to help others and you can’t force them to change.
Rent caps are one of those that sound good in theory - like telling ticketmaster to lower the price of tickets, or 0% unemployment. But doing so just means other things suffer.
Rent control is literally the textbook case of making a bad situation worse via unintended consequences.
If it’s textbook, can you describe the textbook examples?
Sure, so Oregon did the same thing in 2019.
“7% plus the Consumer Price Index for All Urban Consumers, West Region (All Items), as most recently published by the Bureau of Labor Statistics, or 10%, whichever is lower.”
https://www.oregon.gov/das/oea/pages/rent-stabilization.aspx
So 10% in 2024, 14.6% in 2023, 9.9% in 2022.
What this does is encourage landlords to increase rent by the maximum allowed, because they don’t know how much they can increase it next year.
Even in years where they might not have had a reason to increase rent, or increase it minimally, they take the maximum.
https://www.opb.org/article/2022/09/13/oregon-maximum-rent-increase-announced/
I guess the argument is that they will raise rent by the maximum, even at excessive risk of losing tenants? Because if the tenants will pay that much, why wouldn’t the landlord charge that anyway?
Yup, it incentivizes the landlords to maximize increases.
I bought a house in October of '21, I had been renting an apartment for $1,800 a month. My mortgage is just over $2,000 and is locked in for 30 years.
I looked up my old apartment for funsies recently… $2,300 a month.
Which tracks…
$1,800 in 2021. 2022 - 9.9% increase +$178.2 = $1,978.2
2023 - 14.6% increase +$288.82 = 2,267.02
2024 - 10% increase +$226.70 = $2,493.72
Not OP but ill do you one better and link the free online textbook that is used at a number of universities.
Look up “The core Economy 1.0” chapter 11, section 10. Case study on fixing rent prices and the following consequences, along with a step by step diagram.
You forgot the other thing they teach.
Never discuss that with anyone who hasn’t studied economics - the same as how we will deliberately reduce GDP to increase the unemployment rate, or sometimes a country is better off by axing a productive market and putting 50k people out of work. They don’t see how and will only take it out on you.
Its just not worth the arguement.
Maybe the point is such a system that only works on numbers is inhumane and should be avoided? Economics people want to argue within economic frameworks which don’t work well if some assumed market conditions don’t exist. I have never seen reality work quite as described when free market breaks down and MNCs control government policymaking
People don’t like applying economic theory because it reminds us of the core part of being human - I only care about myself and will act in a way that benefits me. Even altruistic people act as they do because they want to disadvantage themselves to help others and you can’t force them to change.
Rent caps are one of those that sound good in theory - like telling ticketmaster to lower the price of tickets, or 0% unemployment. But doing so just means other things suffer.