tag:blogger.com,1999:blog-1141932539860553199.post8110790678288491166..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: Rent controls vs financial crisesMark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1141932539860553199.post-26733922112750596992016-12-21T11:16:12.193+00:002016-12-21T11:16:12.193+00:00MW. In re 'mortgage caps', yes.
As you...MW. In re 'mortgage caps', yes. <br /><br />As you know I am (was) in the mortgage business. There were two waves of wrongness. First wave ended in 1989, but leading up to that event multiples did not really go above 3.5 x main earner + 1 x second earner (From memory. Or perhaps that was just me?). Maybe it was the MIRAS that distorted it.<br /><br />Second wave, which started in 1994, but really only go going under Brown Balls saw multiples go to 5x plus plus. Where in large part they still are.<br /><br />FWIW I did a lot of self cert and up until about 2000 we didn't exceed 3.5X. Most of those borrowers didn't have income that mainstream lenders would look at, even though it was demonstrably there so specialist lenders turned up - UCB for example. This is relevant as their impairment rates were far less than Halifax (say).<br /><br />One of the reasons we now do not do mortgage work is because on any sane measure most mortgages confound my 'prudency' metrics. And the ones that don't we refer out as that is more efficient. Nevertheless, who's the mug? If by borrowing HUUUGGGE amounts you can access tax free gains, why wouldn't you?Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-53291454347539164082016-12-21T10:36:58.459+00:002016-12-21T10:36:58.459+00:00L, agreed. Price controls = bad, but they are one ...L, agreed. Price controls = bad, but they are one way of dealing with monopolies.<br /><br /><br />Rent controls = undersupply = bad, so to compensate they had to have social housing, and you still need mortgage caps etc etc. All in all, the Georgism Lite we used to have 'worked' for most people, putting Bayard's 'frustrated renters' to one side.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-63429108440585953332016-12-21T09:51:36.332+00:002016-12-21T09:51:36.332+00:00I really don't approve of any 'price contr...I really don't approve of any 'price control', therefore rent controls would be a bad thing in my lexicon. However, without compensating LVT there appears to be no alternative.<br /><br />The trouble then is that without LVT but with rent controls bad outcomes happen as the rent controllers never have enough information to set the 'right' rent. Witness all those abandoned brownstone buildings in New York.<br /><br />LVT. You know it makes sense.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.com