I’m sympathetic to the real plight of people being evicted, or even just priced-out of their long-term unit or neighborhood (or city), but I don’t think it’s reasonable to claim that it “is always going to be traumatic”. That’s hyperbole.
And just because this is Sad doesn’t mean there’s any practical way to fix it. It’s not obviously terrible that anyone is ever evicted or priced-out of their apartments or homes.
Do you think it would be ideal if everyone could stay in their current apartment or home forever? Who should be responsible for maintaining the apartment, the apartment building, or the home? Are there any reasonable limits to any of this?
I think of the effective overall form of all the ways that this has attempted to be fixed as basically giving the privileged tenants pretty strong quasi-property rights – while saddling someone else with most of the costs and responsibilities. The big tension is the fairly tight gap between the status quo and the inevitable end game – public housing.
Public housing is pretty terrible; maybe a little better in some cases than the worst ‘private’ rental housing. (I could be very wrong. I can’t think of any particular evidence for this belief.) There doesn’t seem to be sufficiently strong incentives for the relevant authorities to actually do a good job managing their properties. Or perhaps moral hazard is sufficiently significant that better management is just too expensive. I’m skeptical of the net value of public housing, but I still think it’s sad that it’s not better.
But – in the big expensive cities, like NYC, with which I’m most familiar – ‘private’ housing is extremely encumbered (e.g. as a form of ‘property’).. As Matt Yglesias points out in a related post, that’s why real estate development is dominated by ‘developers’ – because navigating the legal and political environment is difficult, risky, and thus very expensive:
No building is allowed in desirable inner-ring suburbs.
No building is allowed in the most expensive parts of the city.
Along a relatively tiny gentrification frontier, a handful of politically well-connected developers can get permits for projects.
Because the permitting process is highly politicized, various activists, neighbors, and politicians try to shake the developer down for side-concessions.
Prices go up and up because this is just way too little new housing to meet demand.
Narrowing the gap between ‘private’ housing and public housing will only exacerbate steps 3-5.
Interviewer – In 2013, you ran on reducing income inequality. Where has it been hardest to make progress? Wages, housing, schools?
What’s been hardest is the way our legal system is structured to favor private property. I think people all over this city, of every background, would like to have the city government be able to determine which building goes where, how high it will be, who gets to live in it, what the rent will be. I think there’s a socialistic impulse, which I hear every day, in every kind of community, that they would like things to be planned in accordance to their needs. And I would, too. Unfortunately, what stands in the way of that is hundreds of years of history that have elevated property rights and wealth to the point that that’s the reality that calls the tune on a lot of development.
And that’s certainly one way to ‘solve’ the problem of being evicted – the municipal government can monopolize evictions! (And also decide who can emigrate to the city and the rents of every unit in the city.)
Kenny, do you have a reason to think that housing construction and rental is a situation where you would expect good outcomes from the government running it?
You might get a bunch of these, and the ones I have seen were somewhat shoddily constructed.
Consider this. There is a ‘model’ free market solution, with Tokyo a model example. In 3 sentences:
The national government handles the rules for permitting, and any developer with plans that meet the codes, which allow extremely high density, will get a permit. Neighbors and local city governments get very little say in large areas, so replacing older homes with new can’t be blocked. The outcome of this policy is that the housing in Tokyo is inexpensive, high density, and most of it is recently constructed. Here’s a video on it.
I think “government running” housing construction and rental management could work – see Singapore for an example in that direction.
But generally, no, I would expect governments to generally lack strong incentives to do as good of a job as private enterprises.
I also am aware of the ‘Tokyo model’ and support something similar (or even mostly the same) in other places (e.g. the U.S.).
Practically tho, it seems like the areas in, e.g. the U.S., where housing is most expensive are stuck in ‘inadequate equilibriums’. Basically, everyone is ‘trapped’ in the status quo. Any significant change is likely to hurt large numbers of people, e.g. repealing or rolling-back rent control and rent stabilization.
I also suspect that it’s a victim of a more general problem whereby it’s extremely useful for political coalitions to ‘covertly’ sustain the problems they’re nominally against and loudly proclaim to want to solve. Were they to actually and effectively solve those problems, they’d suffer politically, because of the loss of a strong plank in their platform. (Charitably, I don’t think anyone believes that about their own causes.)
I’m sympathetic to the real plight of people being evicted, or even just priced-out of their long-term unit or neighborhood (or city), but I don’t think it’s reasonable to claim that it “is always going to be traumatic”. That’s hyperbole.
And just because this is Sad doesn’t mean there’s any practical way to fix it. It’s not obviously terrible that anyone is ever evicted or priced-out of their apartments or homes.
Do you think it would be ideal if everyone could stay in their current apartment or home forever? Who should be responsible for maintaining the apartment, the apartment building, or the home? Are there any reasonable limits to any of this?
I think of the effective overall form of all the ways that this has attempted to be fixed as basically giving the privileged tenants pretty strong quasi-property rights – while saddling someone else with most of the costs and responsibilities. The big tension is the fairly tight gap between the status quo and the inevitable end game – public housing.
Public housing is pretty terrible; maybe a little better in some cases than the worst ‘private’ rental housing. (I could be very wrong. I can’t think of any particular evidence for this belief.) There doesn’t seem to be sufficiently strong incentives for the relevant authorities to actually do a good job managing their properties. Or perhaps moral hazard is sufficiently significant that better management is just too expensive. I’m skeptical of the net value of public housing, but I still think it’s sad that it’s not better.
But – in the big expensive cities, like NYC, with which I’m most familiar – ‘private’ housing is extremely encumbered (e.g. as a form of ‘property’).. As Matt Yglesias points out in a related post, that’s why real estate development is dominated by ‘developers’ – because navigating the legal and political environment is difficult, risky, and thus very expensive:
Narrowing the gap between ‘private’ housing and public housing will only exacerbate steps 3-5.
From a 2017 interview of Bill de Blasio (the then and current mayor of NYC):
And that’s certainly one way to ‘solve’ the problem of being evicted – the municipal government can monopolize evictions! (And also decide who can emigrate to the city and the rents of every unit in the city.)
Kenny, do you have a reason to think that housing construction and rental is a situation where you would expect good outcomes from the government running it?
You might get a bunch of these, and the ones I have seen were somewhat shoddily constructed.
Consider this. There is a ‘model’ free market solution, with Tokyo a model example. In 3 sentences:
The national government handles the rules for permitting, and any developer with plans that meet the codes, which allow extremely high density, will get a permit. Neighbors and local city governments get very little say in large areas, so replacing older homes with new can’t be blocked. The outcome of this policy is that the housing in Tokyo is inexpensive, high density, and most of it is recently constructed. Here’s a video on it.
I think “government running” housing construction and rental management could work – see Singapore for an example in that direction.
But generally, no, I would expect governments to generally lack strong incentives to do as good of a job as private enterprises.
I also am aware of the ‘Tokyo model’ and support something similar (or even mostly the same) in other places (e.g. the U.S.).
Practically tho, it seems like the areas in, e.g. the U.S., where housing is most expensive are stuck in ‘inadequate equilibriums’. Basically, everyone is ‘trapped’ in the status quo. Any significant change is likely to hurt large numbers of people, e.g. repealing or rolling-back rent control and rent stabilization.
I also suspect that it’s a victim of a more general problem whereby it’s extremely useful for political coalitions to ‘covertly’ sustain the problems they’re nominally against and loudly proclaim to want to solve. Were they to actually and effectively solve those problems, they’d suffer politically, because of the loss of a strong plank in their platform. (Charitably, I don’t think anyone believes that about their own causes.)