> Why is the non-price way of rationing better than rationing based on who is willing to pay the most?
It's not. But rationing by price has little advantage if you're not going to allow anybody to build more housing: the basic benefit of the price mechanism is that higher prices recruit more resources to employ towards increasing supply. But if you're going to fix supply though a NIMBY-dominated political process, then every dollar of increased rent is going to end up in the pockets of property-owners, not budging the supply of housing, to the unallayed detriment of renters.
This is a both a partial explanation of why NIMBY-ism is so pernicious and of why capital (foreign or otherwise) is so strongly attracted to NIMBY-dominated, supply-constrained markets like the Bay Area.
The quality of commentary on these issues in the press and in the political process is abhorrent. If anyone with a basic understanding of economics is interested in learning more about the economics of rationing, I recommend starting with Economic Analysis of Property Rights, by Yoram Barzel [0,1].
It's not. But rationing by price has little advantage if you're not going to allow anybody to build more housing: the basic benefit of the price mechanism is that higher prices recruit more resources to employ towards increasing supply. But if you're going to fix supply though a NIMBY-dominated political process, then every dollar of increased rent is going to end up in the pockets of property-owners, not budging the supply of housing, to the unallayed detriment of renters.
This is a both a partial explanation of why NIMBY-ism is so pernicious and of why capital (foreign or otherwise) is so strongly attracted to NIMBY-dominated, supply-constrained markets like the Bay Area.
The quality of commentary on these issues in the press and in the political process is abhorrent. If anyone with a basic understanding of economics is interested in learning more about the economics of rationing, I recommend starting with Economic Analysis of Property Rights, by Yoram Barzel [0,1].
0. Publisher's site: http://www.cambridge.org/us/academic/subjects/economics/indu...
1. Amazon: https://www.amazon.com/Economic-Analysis-Political-Instituti...