In economics and in ordinary political speech, a “shortage” can mean two different things, and much of the discussion across these episodes turns on which meaning is in play. Bob Zadek argues that in everyday usage the word is a placeholder for “cheap stuff,” while guests distinguish a colloquial complaint about high prices from the technical notion of a shortage created when government interferes with price.
The everyday meaning: a surrogate for price
In the 2019 episode on rent control, Zadek framed the “housing shortage” as one of the “wrongheaded principles underlying rent control” and asked Charlie Deist to define the phrase, saying he would maintain that it is impossible for there to be a housing shortage. Zadek argued that a housing shortage really means that people cannot find housing at the price they want to pay or can afford, and that by that logic there is also a severe diamond shortage and a shortage of expensive cars and designer clothing. He concluded that there is never a housing shortage, only a shortage of a commodity at a price somebody feels they can pay, and that the phrase is a surrogate for cheap housing The Rent Control Bomb (2019).
Deist’s initial answer was that a shortage can be described when the quantity demanded exceeds the quantity supplied, and that rent control functions as a price ceiling set below the intersection of supply and demand. He added that landlords find ways around rent control, citing New York City landlords who at one time charged key fees of 2,000 dollars, and said that a shortage can meaningfully be said to exist in places like San Francisco where an influx of people is not accommodated by rising rents The Rent Control Bomb (2019).
The economic definition: scarcity versus shortage
Trevor Burrus, in the 2021 episode, drew the distinction Zadek’s framing had left implicit. He said economists use “shortage” in a more specific way than everyday conversation, separating scarcity, which applies to inherently scarce things like platinum or plutonium or diamonds, from shortage, which is a combination of a price and supply. On that definition, Burrus said, shortages can occur when government meddles with the price and creates artificially high demand while restricting supply, and that rent control does create an economic shortage by messing up demand and supply Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021).
Burrus illustrated the point with Lamborghinis: at 500,000 dollars, people who want one at that price buy one, so there is no shortage, but a law capping the price at 200,000 dollars would increase the number of willing buyers while reducing the number sold, and the gap at the mandated price is a shortage. Zadek accepted the mechanism but insisted it is caused by messing around with the price, adding that California has no shortage of water, only a shortage of free water Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021).
Rent control as the cause
In the 2023 episode, Mike Munger stated that there is such a thing as a shortage and that there is a shortage of housing in San Francisco because of rent control, since the price mechanism is not free to adjust and there is not nearly enough housing at the rent-controlled price. He said New York has a terrible shortage of housing because of rent control, and that it is next to impossible to build something if you go to the City Council there, while people live in rent-controlled apartments that poor people cannot find The ‘Broken Window Fallacy’ is Back (2023).
Munger generalized the claim: it is literally impossible to run out of anything as long as the price mechanism is free to adjust, and it only seems like there are shortages because the price mechanism is prevented from adjusting. In the same segment he extended the argument beyond housing, saying that landfill companies adopted rubber membranes to prevent leakage in response to exposure to private liability and the threat of lawsuits rather than because of regulation from the EPA, and that this system is self-correcting as long as prices operate and tort suits for damages remain available The ‘Broken Window Fallacy’ is Back (2023).
Shortage, rent control and the Takings Clause
The 2021 episode connected the shortage claim to the constitutional argument against rent control. Zadek described rent control as a wealth transfer from landlords to tenants, in which government gives a benefit to a tenant without raising broad-based taxes, and said nothing could be more offensive to how Americans see their economic life. He noted that the Constitution prohibits government from taking property except with just compensation and for a public purpose, and that the aftermath of the Kelo case taught that the Takings Clause cannot be used to transfer property merely from one private actor to another Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021).
Burrus set out the framework, quoting the Fifth Amendment’s guarantee that private property shall not be taken except for public use and with just compensation, and describing the Framers’ concern that political actors would misuse their power. He distinguished a pure confiscation, such as the taking of Susette Kelo’s house in the Kelo v. City of New London case, from a regulatory taking, in which regulations destroy essentially all economic use of property or let a tenant occupy it at a lower rent than the owner would charge. He said challenges working their way up in the Second Circuit allege both a regulatory taking and an actual taking because the property is being occupied, and that a case called Pactel was being filed at the cert stage concerning a San Francisco ordinance requiring owners who convert apartment buildings to condominiums to offer existing tenants essentially a lifetime rental contract Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021).
The supply response
Zadek argued that rent control has the opposite effect of what its defenders intend: it prevents houses from being built, because no one would build rental property when limited in what they can charge, and it gives no incentive to improve. He said landlords respond by not building rental housing and by converting rental property to cooperative or condominium housing Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021).
Burrus described the resulting cycle as lawmakers passing one law to band-aid the effects of the last, comparing it to the nursery rhyme about the old lady who swallowed a fly. He said New York has a law requiring that 51 percent of existing tenants vote before conversion, which empowers tenants to determine how a landlord can use their property, and he returned repeatedly to the point that if the public is supposed to care about a goal, the public should pay for it rather than making one person bear the cost Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021).
Across episodes: the same question, sharpened
The same question — whether a housing shortage exists — is argued in all three episodes, and the treatment sharpens rather than changes. In 2019 Zadek pressed Deist to concede that a shortage is only a shortage at a price, and Deist partly resisted while granting that rent control can produce one. In 2021 Burrus supplied the scarcity-versus-shortage distinction that let both positions stand, and Zadek accepted the mechanism while denying the label. In 2023 Munger stated the strongest version, that shortages are literally impossible when the price mechanism is free to adjust, and named San Francisco and New York as places where rent control makes them real. The later episodes do not revise the earlier claim so much as supply the vocabulary for it.
What the sources do not cover
The excerpts do not state the outcome of the Second Circuit challenges or of the Pactel case, nor do they report any holding on the regulatory-takings claims. They do not give the text, sponsor or enactment date of any statute, and the 2019 excerpt breaks off at a heading for a segment on AB 1482 before any discussion of it appears. The sources also do not quantify the housing supply in San Francisco or New York beyond the assertions that not nearly enough housing exists at controlled rents and that hundreds of thousands of people have moved into the Bay Area.