...

The housing doesn't disappear but it doesn't go on the market like it would under normal equilibrium conditions.

If there are price ceilings and the landlord can't charge more based on market conditions (let's say taxes went up, let's say he has to make repairs and the cost of various inputs are up, and so on) what might happen is his margins could be so low that he decides to convert the apartment into a store, storage, something else. So in the long run price ceilings make renting for the landlord much less appealing leading to fewer apartments being in the market. This is the issue on the supply side.

There are also issues on the demand side. Let's say I want to move to NY and I'm willing to pay 3 grand for an apartment in XYZ neighborhood but the price ceiling is 1.5k. In reality, the people living there because of this will be much less likely to move so many people looking for apartments and even willing to pay more for them would not able to find available ones.

That's why there were such horrible shortages in the USSR under central planning. People had money, the problem is under a planned economy there is no price discovery. There were people lining up for days to buy a car, all had the money but not all would get the product because under a normal economy the price would go up to an equilibrium where the people that most want the car would get it instead of ending up with shortages. Price discovery is one of the most fundamental economic principles that has made capitalism a massive success. Its how corporations know how much product to make. If you fuck with this mechanism, it creates issues that ultimately hurts both the consumers and producers.

Ultimately price ceilings and price floors cause deadweight loss either in the consumer or producer surplus and that's been proven for a long time now.

This post was edited by ofthevoid on Dec 19 2020 01:19pm

Not that many other uses for housing and not really much space to build anything in most major cities.
The caps can work, it just comes down to math, make them too high and they defeat the purpose, make them too low and you remove incentive.

Basically.

You can also pair it with subsidies on housing cost to make it more profitable for developers.

Rent control is a tool. You don't say hammers are ineffective because it broke your window.

"Poison is okay because it didn't kill me"

At the right dose and in the right situation poison is beneficial.

That's the entire basis of pharmaceuticals

The pricing mechanism is what makes the interaction efficient.

You are egotistical so you think you can do better than the market. You are wrong. It is as simple as that.

The market is great at some things. When demand is elastic, knowledge is symmetric, production is simple markets work amazingly.

The further you get from those assumptions the less well the market works. Healthcare fulfills none of them. Housing only fulfills some of them.

The market is often wrong, we took the heavy profits out of healthcare and pharma and everyone benefited.

This post was edited by Plaguefear on Dec 19 2020 10:47pm

earth is Trump-Shaped