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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

#131

Post by wincy »

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...

It's not really a wasteland, though. My wife moved here from New York to Kansas City, and her old friends act like there are cows walking down the street or something.

If you're willing to live with diversity of political affiliation (it's a pretty even mix of Democrat and Republican around here, and I've heard people on HN say they'd be absolutely unwilling to live somewhere like that), you can get a 2200 square foot house in a nice neighborhood for around 250,000. We have an airport, IKEA, two art museums, and all sorts of interesting exhibits to see and things to do year round. I plan on having at least four kids, if I went to work for Google to have a house the same size would cost something like $2,800,000? (from a quick Zillow search of somewhere like Sunnyvale if I wanted a similar commute) So 11x more expensive? It seems like madness to me.

I know a guy who lives here but works for a big company on the coast, and he lives in a mansion in one of the nicest neighborhoods around, and even the local mid level tech jobs easily pay 6 figures.

I mean, I guess the weather is nice, but other than that I don't really get it.

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

#133

Post by kemiller »

michaelchisari wrote: post #18
theduro wrote: post #12

Rent control is a failed experiment. All it does is force land lords to massively increase rent amounts when someone moves out to account for multi-year market increases. Basically, if the real market price of an apartment is ~$3,000/mo, but in 5 years it realistically would be $5,000, they will simply list it for $5,000 now, to mitigate the loss. My mother-in-law is a land lord in Los Angeles (a very fair one at tha…

My mother-in-law is a land lord in Los Angeles I'm a tenant in Los Angeles, and a staunch supporter of rent control. Knowing that my rent (which is already high) can only go up so much year-over-year provides some bit of stability as the tech industry devours eastward from Santa Monica.

Would you rather have rent control, or just lower rents overall? For the sake of argument. Because that's the thesis: rent control is partially responsible for the out of control rents.

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

#134

Post by tooltalk »

tomohawk wrote: post #33
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…

Heinlen in "The Moon is a Harsh Mistress" introduces the idea of a legislature with 2 chambers. One for creating laws and the other for getting rid of them. The threshold for creating them being higher. The way it is now, everything is geared towards "doing" things, and credit is received for "accomplishments". Its usually much harder to undo things. It would be refreshing to have specialists in undoing things.

IMO, there should be automatic sunset provision in every law passed in this country, like the one existed for the Patriotic Act, and reviewed, renewed or expired every 5 or 10 years.

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

#135

Post by ddebernardy »

cowsandmilk wrote: post #97
nicholas73 wrote: post #38

Earlier quoted context omitted.

Landlords will rent at whatever they can a tenant to pay for, not some number in their mental ledger.

What your response misses is the time component of vacancy. If I have rent control, I will list at a higher price and let the property sit vacant for longer to find a tenant because the law says that I am limited in the ability to later adapt the rent to the market. Without rent control, there is much less incentive to leave a property vacant, looking for a tenant willing to pay a higher price point. Most microeconom…

So... in other words, what you're missing is a punitive tax on vacant property, as an incentive to rent asap - at any price.

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

#136

Post by AnimalMuppet »

classwarsteve wrote: post #37
theduro wrote: post #12

Rent control is a failed experiment. All it does is force land lords to massively increase rent amounts when someone moves out to account for multi-year market increases. Basically, if the real market price of an apartment is ~$3,000/mo, but in 5 years it realistically would be $5,000, they will simply list it for $5,000 now, to mitigate the loss. My mother-in-law is a land lord in Los Angeles (a very fair one at tha…

>All it does is force land lords to massively increase rent amounts Ah yes, the landlords are forced to massively raise rents, unlike the tenants, who are allowed to choose whatever price they want. Simple reliance on a profit model for housing is never going to adequately meet housing needs.

> Simple reliance on a profit model for housing is never going to adequately meet housing needs.

Can you give something to justify that statement, something more than just a bare assertion? To me, it looks like reliance on something other than the profit motive (that is, rent control) is what's causing the problems here.

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

#137

Post by taoistextremist »

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...

Cramming people into cities is more efficient from an energy and environmental footprint standpoint, and if there's enough vertical construction, it can be plenty comfortable.

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

#138

Post by noobermin »

paulgb wrote: post #21
bendmorris wrote: post #13

Earlier quoted context omitted.

>My mother-in-law is a land lord in Los Angeles ... She is a staunch opponent of rent control. Is this supposed to be surprising...? Regardless of whether it works for tenants, obviously rent control isn't there for the landlord's benefit.

Having read up on some of the building purchases in my own neighborhood (East Village of NYC), it seems that rent control is bad for honest landlords and good for the slimey ones who are willing to "encourage" people to leave. And thanks to Coase's theorem the building sales are usually in that direction.

Wouldn't the fix be to stop the slimey ones from "encouraging" people to leave in the first place?

It sounds like blaming the game rather than striking out against those who abuse it.

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

#139

Post by taoistextremist »

tomohawk wrote: post #35

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

So maybe more should be done to incentivize vertical construction. From what I understand about San Francisco, though, it's actually kind of discouraged because of historical preservation stuff. I can also imagine established landlords without the capital to do large construction projects would still oppose measures to incentivize it, as well.

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

#140

Post by spike021 »

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…

I believe this is exactly my current dilemma:

I live in San Jose, I commute to SF 3 days a week (super thankful for the chance to work remote 2x a week). My current apartment (a 1BR I live in by myself) costs a bit less than 1k a month and is rent-controlled. The equivalent in SJ is probably worth 2-2.5x as much per month, and in SF (or somewhere in-between) it can be worth anywhere from 2.5-4x as much.

I've been hunting for an apartment more on the peninsula since I don't necessarily need or want to live right in the city, just closer (especially in case I switch jobs eventually), but I definitely want to halve the commute time at least (Caltrain plus door to door is nearly 1.75hrs each way).

But why would I want to leave my rent-controlled steal and be spending over half my monthly income for the equivalent? It's ridiculous.

So now it's a matter of figuring out the cost analysis of moving into a better area that's closer to work, and therefore an increased quality of life, or stay where I'm at where I can save much more money and have a rather crappy quality of life (I don't care for where I live now strictly other than the cheap price of the rent).

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