tag:blogger.com,1999:blog-5404820640426099135.post3112361672227555070..comments2023-10-31T00:46:35.316+13:00Comments on Anti-Dismal: Rent controls are efficient Paul Walkerhttp://www.blogger.com/profile/13731003529546075700noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5404820640426099135.post-1295431951000851972014-03-12T02:01:31.342+13:002014-03-12T02:01:31.342+13:00Given there is an allocation of property rights, a...Given there is an allocation of property rights, and there is, the transfer is not the problem, thats just someone gets X and someone pays X, net zero. The issue is here is the allocation of property rights in the first place. Under rent controls the allocation could be inefficient for the reasons stated. It is hard to see a permanent excess demand as an equilibrium,<br /><br />The right for an owner to let a tenant use his property is fine as long as the terms of the contract are freely agreed to. Under rent control they are not. The price (rent) is not the market price, its below the equilibrium rate in a situation where the landlord would clearly prefer, and could get, the market rate, if it was not for the rent control.<br /><br />As an NZer its hard for me to see anyone wanting any part of the West Island at any price!! But a peppercorn rent could be the market price for ACT!Paul Walkerhttps://www.blogger.com/profile/13731003529546075700noreply@blogger.comtag:blogger.com,1999:blog-5404820640426099135.post-54947534729193706112014-03-12T00:51:43.649+13:002014-03-12T00:51:43.649+13:00Paul, you can't say "The price paid is ju...Paul, you can't say "The price paid is just a transfer between the parties with no implications for efficiency" and then quote a bunch of reasons it is inefficient. It's either just a transfer or it's not. <br /><br />I think you miss the bigger picture point that freehold rights are also a form of 'rent control' in that the freehold owner is given the rights to extract all the rent. <br /><br />Your last paragraph simply reiterates the belief that freehold title is somehow a 'natural right' and that any other form of right, say to tenants, is somehow unnatural and inefficient. <br /><br />In many places all property is held in leasehold title from the government on long term leases for peppercorn rents (for example, the whole of the ACT). Is this also inefficient? Because it is an identical situation with two different parties. <br /><br />Would you think the efficiency impact would be different if the tenant could trade their lease?<br />Cameron Murrayhttps://www.blogger.com/profile/08737859133901303110noreply@blogger.com