Feb 21, 2023Liked by Cameron Murray

I guess the argument would be that competition reduces prices through an iterative and dynamic process, so a first mover captures rents and then prices gradually get bid down. It's a classic fallacy of composition/coordination problem that it's profitable for an individual firm to reduce prices but it will damage them all in the long run.

Expand full comment
Feb 22, 2023·edited Feb 22, 2023

Equating market forces to rent controls is also flawed. The difference is that in the latter case the effect is exogenous.

The former can simply be a consequence of shifting preferences, saving rates, or what have you, a symptom of organic changes in the market.

Expand full comment

Your third argument is flawed. Higher rents might not benefit owners if the total housing stock is low. Upzoning can easily benefit both renters and owners (assuming supply increase).

Expand full comment
Feb 22, 2023·edited Feb 22, 2023Author

Surely if upzoning benefits renters by lowering the rental price for all housing, then owners of all the existing homes will not benefit, but lose out (unless there is a way that developers or new homes compensate the owners of existing homes, or some such thing).

Expand full comment

The owners of existing and not yet existing homes are not distinct groups.

Existing homeowners might be better positioned to benefit from an increase in the overall market size.

Specifically to your point on lobbying, bigger players where the interests are concentrated, the ones that are expected to lobby, are also likely to be better positioned to benefit from an increase in the rental market.

Expand full comment