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Stanford paper says rent control is driving up cost of housing in San Francisco

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Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#121

Post by linkregister »

icelancer wrote: post #109
linkregister wrote: post #64

Earlier quoted context omitted.

Exactly! If the landlord can get a tenant to pay $5000 per month, then the market rate for that particular unit is $5000 per month.

No, not exactly. In the scenario above, the landlord obviously has to keep the property vacant for some time at $5000/month, much longer than at $3000/month. But because it is a near-certainty the real price would go to $5000/month in 5 years - but he is unable to increase rent to that if he rents out today at $3000/month due to rent control (and this is critical) - he would rather keep it vacant until someone comes…

I was going to refute your (uncited) comment, but it appears that San Francisco's vacancy rate has increased from 4.9% to 8.3% over ten years, affirming your position.

http://www.bayareacensus.ca.gov/counties/SanFranciscoCounty....

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#122

Post by peterjlee »

fnord77 wrote: post #28

I believe most of the people living in SF are renters. Getting rid of rent control will never happen, politically.

Rent control is only available in units built before 1980. So renters who were not lucky enough to find a rent controlled housing has an incentive to vote against rent control. Though, any politician who leans one way or the other will piss off the other group and could be a political suicide.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#123

Post by noobermin »

icelancer wrote: post #114
noobermin wrote: post #93

Earlier quoted context omitted.

Your comment doesn't really address my point. The argument the article presents has less to do with free market fundamentalism than it does with landlords trying to get tenants of rent controlled units to leave in order to get market rates. That seems like the issue. Blaming rent control sounds a lot to me like blaming the victim for the crime.

>>landlords trying to get tenants of rent controlled units to leave in order to get market rates. That seems like the issue. This is a simple incentive. To expect landlords not to act in this manner is to ignore Economics 101. If you design policies and laws in such a manner that rational actors will... act rationally... and this is bad, then the problem is how you designed the laws, not the rational actors - no matt…

Let's teach our daughters not to wear short skirts, because that increases the chances they'll be raped. Sounds like a similar argument.

With less hyperbole, you can use this argument regarding externalities involved in capitalism from the exploitation of workers to pollution of rivers. The way you change incentives is you add regulation.

Regardless, this thread is floating away from my point. No one is addressing the actual article here, which is really discouraging and fits with the trend of discourse on HN for the last year or so.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#124

Post by dragonwriter »

sbov wrote: post #119
dmix wrote: post #10

Earlier quoted context omitted.

> Sometimes the cost of intervention outweigh benefits, sometimes they don't. + Sometimes it works for a short period, as the policy reflected the economy at the time of creation, then becomes irrelevant via technology/market reaction to policy/general progress... but yet stays a policy for decades. The important point is that we rarely ever measures whether it does work or not, and policy tends to have an extremely…

Prop 13 was a pretty good temporary measure. But after passing a permanent solution should have been put in place. Housing prices in California increased a crapload in the years before prop 13 was enacted. Real people with good jobs in new, modest houses they recently bought - not just granny in her 50 year old home - were in danger of being driven from their homes due to increases in property taxes.

> Prop 13 was a pretty good temporary measure.

No, it wasn't.

> Housing prices in California increased a crapload in the years before prop 13 was enacted. Real people with good jobs in modest houses they recently bought - not just granny in her 50 year old home - were in danger of being driven from their homes due to increases in property taxes.

It would be very easy to address that problem with a much smaller policy change than Prop 13. For one thing, the described problem doesn't justify any alteration to non-residential property taxes.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#125

Post by 8ytecoder »

seandougall wrote: post #87
8ytecoder wrote: post #39

Another point which is usually not well-discussed, the houses/apts in SF are really bad in terms of quality, amenities and features. With new housing, this is starting to change a little bit. But, overall, rent control results in really bad maintenance. Landlords do the absolute bare minimum to not get sued/fined. For the rent people in SF pay, the value they derive is almost a joke.

> Landlords do the absolute bare minimum to not get sued/fined. IME, this is a pretty universal statement. Hop across the bridge to cities without rent control and you'll see the same thing. The problem isn't any specific policy, it's the power balance between landlord and tenant created by a market with limited supply and ever-growing demand.

Those are typically cities with lower demand. I'm on the other side of the bay as well and my building was recently renovated and upscaled quite a bit to take advantage of the new demand.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#126

Post by baddox »

mnemonicsloth wrote: post #110
dmix wrote: post #10

Earlier quoted context omitted.

> Sometimes the cost of intervention outweigh benefits, sometimes they don't. + Sometimes it works for a short period, as the policy reflected the economy at the time of creation, then becomes irrelevant via technology/market reaction to policy/general progress... but yet stays a policy for decades. The important point is that we rarely ever measures whether it does work or not, and policy tends to have an extremely…

1) a well-staffed multi-partisan agency entirely dedicated to reviewing policy, with a mandate of removing any policy having a net-detrimental effect on society. By launching scientific studies of the effects with subpoena power over other agencies, making policy recommendations, and potentially the power to temporarily suspend regulations until reviewed by congress. I know this sounds like a good idea. It almost sou…

I think it is flawed at an even more fundamental level: what does “multi-partisan” mean, and how do you achieve it?

It seems like the term was used simply to mean “fair and not favoring any particular political agenda,” but that is a huge hand-wave. Who decides the members of this agency? If we had a good method to establish this fair agency, we could just use that method to establish the entire government.

This proposal just pushes the entire problem of governance back one step. I see this a lot in discussions about improving government: proposing some oversight committee to keep the government (which we all agree has flaws and biases) in check. Even the entire idea of checks and balances between branches of government is based on this concept, and is flawed for the same reasons (although that’s a bigger discussion). If you can make the oversight committee fair and efficient and effective, just do that for the whole government!

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#127

Post by 8ytecoder »

danieldisu wrote: post #86
tomohawk wrote: post #35

Price controls always end up creating artificial scarcity. The solution to lower housing costs is more housing, not less.

Maybe we need something deeper than that, you have 3/4 of your country that are almost a wasteland and you insist on cram all the people in 4 or 5 cities. Maybe we need to start to incentive moving people to other more empty places...

Environmental advocates I have spoken to are generally of the opinion that vertical building is better than sprawl and less number of cities are better than building in every nook and cranny of available space in the country. (of course we have to balance health, open space, happiness and other concerns)

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#128

Post by gamblor956 »

civilian wrote: post #99
dmix wrote: post #10

Earlier quoted context omitted.

> Sometimes the cost of intervention outweigh benefits, sometimes they don't. + Sometimes it works for a short period, as the policy reflected the economy at the time of creation, then becomes irrelevant via technology/market reaction to policy/general progress... but yet stays a policy for decades. The important point is that we rarely ever measures whether it does work or not, and policy tends to have an extremely…

Yes! Another thing you could do is including the reasoning for a law, and have the review address that. Like-- let's take on Oregon's statute banning self-pumping. Most of the reasons are safety related: https://www.oregonlaws.org/ors/480.315 It'd be cool to have a system where a private citizen would be allowed to file a lawsuit if they thought the justifications didn't have evidence. So the case would look at the j…

For the better part of 2 centuries, the legislative histories at the state and federal levels have included the justifications for the law, and the discussions wherein the evaluate different provisions. They keep these in different legislative records because they're significantly more voluminous than the laws themselves.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#129

Post by noobermin »

kinkrtyavimoodh wrote: post #60
ThrustVectoring wrote: post #43

Another second-order effect of rent control is increased traffic. Suppose you have two residents with significantly below-market-rate housing at the same quality level, one in downtown SF and another in Mountain View. The former starts a new job at Google in Mountain View, the latter starts a new job at a trendy start-up in downtown SF. Since they're paying significantly below market rate, they're unable to trade apa…

There is a lot of stickiness and inelasticity when it comes to housing, especially when other factors such as kids and schools and spouse's commute and all come up.

Can a free-marketeer address this? I thought stuff like this were obvious rebuttals but look at the top posts in this comment section.

It's starting to feel like articles and posts like this aren't driven by discussion or curiosity but just political fights.

Re: Stanford paper says rent control is driving up cost of housing in San Francisco

#130

Post by IWeldMelons »

danieldisu wrote: post #86
tomohawk wrote: post #35

Price controls always end up creating artificial scarcity. The solution to lower housing costs is more housing, not less.

Maybe we need something deeper than that, you have 3/4 of your country that are almost a wasteland and you insist on cram all the people in 4 or 5 cities. Maybe we need to start to incentive moving people to other more empty places...

Many people in SF, Chicago etc. depend on public transit. Wastelands do not have it, usually.
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