Path: utzoo!utgpu!water!watmath!looking!brad
From: brad@looking.UUCP (Brad Templeton)
Newsgroups: can.politics
Subject: Re: rent review
Message-ID: <1454@looking.UUCP>
Date: 4 Mar 88 17:50:43 GMT
References: <1988Feb24.140628.28040@jarvis.csri.toronto.edu> <1433@looking.UUCP> <2680@dciem.UUCP>
Reply-To: brad@looking.UUCP (Brad Templeton)
Distribution: ont
Organization: Looking Glass Software Ltd.
Lines: 30

In article <2680@dciem.UUCP> mmt@dciem.UUCP (Martin Taylor) writes:
>
>Brad Templeton presents the conventional view, which I believed until
>recently, that the lack of rental accomodation is a consequence of
>rent controls.  Apparently this is not so.  The Globe and Mail had
>an article a few weeks ago (which I didn't keep, so I have no specific
>reference) that said that the crunch started before rent controls
>came in.  I grant that all the things Brad said sound reasonable
>on the surface, but if rent controls started *after* the rental
>accomodation began to be scarce, then they can hardly be blamed for
>the present situation, can they?

Indeed, there are many factors.  Temporary shortages of housing
are possible in any kind of market.  After all, there is only so much
land per square mile. (One square mile, in fact!)

In a free market, land developers see a housing shortage as a financial
opportunity, and they build.  This takes around a year.  Smart land
developers see housing shortages a year in advance, but not everybody is
that smart.  Only if land is running out will you see a long term
shortage in a free market.

As land runs out, other solutions, based on technology come into play.
In particular, better transportation to the 'burbs and high-rise dwellings.

The point is that, in a free market, a housing shortage is a signal to build
more housing.  Rent control removes or reduces that signal, and makes a
temporary shortage into a permanent one.
-- 
Brad Templeton, Looking Glass Software Ltd. - Waterloo, Ontario 519/884-7473