Stanford paper says rent control is driving up cost of housing in San Francisco • Hacker News Board

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

#171

Post by mrgordon » Mon, Jan 08, 2018, 11:07 PM UTC

almost_usual wrote: post #14

mrgordon wrote: post #9

Earlier quoted context omitted.

Everyone who wasn’t gentrified out of their home agrees it’s great. An economist might foolishly brush off everyone being priced out of their neighborhoods as simply “externalities” but San Francisco’s politicians thankfully have a more nuanced view of the situation. And, as ghouse indicates, new housing isn’t subject to rent control so developers make a killing if they get approval.

This addresses active developers who are looking to profit from renters. There are plenty of speculators in the Bay Area who purchase homes without renters or buy them out only to sit on the home and not rent it (since it decreases the value of the home). This isn't a rare thing, there many pre 1978 residences with nobody living in them owned by overseas investors.

This happens to a large degree even without rent control. Miami is full of properties owned by snowbirds who only visit for a few months in the winter or by rich investors who figure a penthouse on South Beach isn’t likely to lose value any time soon. This is especially true of investors from South America who are happy to own a stable investment in US dollars.

I’m not convinced it happens so much more in SF to cause the high rents. I think years of building almost nothing after the 208 crisis while jobs exploded is responsible.

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

#172

Post by tomohawk » Mon, Jan 08, 2018, 11:10 PM UTC

tooltalk wrote: post #134

tomohawk wrote: post #33

Earlier quoted context omitted.

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.

Very much agree. It would be great if laws sunset after no more than 10 years if only a mere majority wanted the law. With a super majority, then the law could last, say 50 years.

This would allow for more experimentation and for consensus building. As it is now, the law is always in the context "and forevermore, it shall be this way". If the context was, let's try this for a few years and see what happens, it would be a less contentious thing. Without the imposed time limits, partisans grab as much as they can whenever they can.

Ancient Isrealite law had something similar with the jubilee. Every 50 years, debt was forgiven and many other things reset. This tended to keep things more balanced.

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

#173

Post by charleslmunger » Mon, Jan 08, 2018, 11:10 PM UTC

hcknwscommenter wrote: post #108

jedberg wrote: post #57

Earlier quoted context omitted.

Why would I build new supply if I'm going to be stuck renting it out under rent control? If I already own a property, how can I build more if I can't raise rents on my current properties to market rates so I can afford to build new buildings at market rates? Rent control causes supply issues. Look at the City of Berkeley. Their supply increased massively right after rent control was lifted in 1997.

New supply is NOT subject to rent control in any way shape or form. Only non-single family housing that was built before 1979 (or maybe 1980) has rent control. Nothing built after that is rent controlled at all.

This is sort of true, but in practice (in the bay area) new construction only happens at the whims of neighbors. Since rent controlled tenants are totally insulated from supply and demand, it's common for tenants to only evaluate their annoyance with new construction, and not the beneficial effects on the rental market. Renters can only be NIMBYs even they're locked in by rent control.

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

#174

Post by walshemj » Mon, Jan 08, 2018, 11:11 PM UTC

nerfhammer wrote: post #153

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…

The term for this is called "labor mobility". Instead of increasing commute times, more typically it involves simply not taking jobs that are further away. Restricting labor mobility is really bad for obvious reasons: people not being able to move where the jobs are means jobs not being filled even as unemployment increases. There is overwhelming evidence that labor mobility has gotten drastically worse in recent dec…

ah but in china not every one is allowed to move to the cities so you get an underclass who work in eh black/grey economy and are paid less because their employer can have them deported

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

#175

Post by almost_usual » Mon, Jan 08, 2018, 11:12 PM UTC

olalonde wrote: post #88

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.

When I moved to SF, I was shocked to find out most 3000+$/month apartments didn't have their own washing machine.

Some people are also surprised to find out they pay 3000+$/month to be in Norteno/Sureno gang territory.

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

#176

Post by imtringued » Mon, Jan 08, 2018, 11:12 PM UTC

s73ver_ wrote: post #49

ghouse wrote: post #7

Earlier quoted context omitted.

But rent control manipulates the free market. With rent control, people who might otherwise move, don't. Further, people who might rent a vacant apartment while they're overseas don't. Or people who start a family and move to the suburbs keep their city place as a pied a tier. So supply is suppressed, but demand is not.

"With rent control, people who might otherwise move, don't." I'm failing to see the problem. Unless those people would have moved for reasons other than soaring rent, them getting to keep their homes is a GOOD THING.

If they truly didn't want to move out because of soaring rent then they would lobby for building more housing. Rent control and prop 13 prevent this from happening. Older residents are now actively fighting to keep their protections and prevent the construction of new housing at the cost of newer residents.

Instead of letting the bubble pop when it's harmless it's growing more and more and when it does pop it is going to be extremely painful.

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

#177

Post by walshemj » Mon, Jan 08, 2018, 11:14 PM UTC

oldsklgdfth wrote: post #104

dmix wrote: post #50

Earlier quoted context omitted.

> I usually conclude that small societies are optimal for quality of living. I came to the same conclusion. Sadly many 'libertarians' often gets dismissed as disliking all forms of government and regulation, which is not the case, rather preferring a limited one. But I guess intentional/unintentional misrepresentation is a savvy and common political tactic because it's effective. My question to you is how do you achi…

I think that you can't, PERIOD. Catalonia was attempting to have a small local government and got shut down. Also, revolutions don't benefit the masses, only a different small group of people. The american revolution displaced the english royalty with new american power. The rebels become the new establishment. I think the only way to guarantee that you don't government overreach is not have a sociaety where all memb…

I thought it was a rich part of Spain didn't want to subsidize the poorer bits - like say the south east of the UK wanted to dump the poor parts of the north.

If the opposition is boycotting the referendum its sort of obvious the promoters of the referendum and a hidden objective

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

#178

Post by tomohawk » Mon, Jan 08, 2018, 11:16 PM UTC

dragonwriter wrote: post #83

tomohawk wrote: post #33

Earlier quoted context omitted.

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.

> The way it is now, everything is geared towards "doing" things, and credit is received for "accomplishments" Repealing a law is doing something, and people frequently point to it as an accomplishment (or goal, if not yet done) if they think the law is unpopular with their constituency.

Just because it can be explained in that way does not make it so. Getting rid of things is much harder that adding things. We see this in systems all the time. Layers and layers and layers are added, but seldom taken away. We also see this in the law.

Probably the last politician who was proud of saying no was Calvin Coolidge. The vast majority of politicians are wired the other way.

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

#179

Post by knodi123 » Mon, Jan 08, 2018, 11:16 PM UTC

CryptoPunk wrote: post #162

knodi123 wrote: post #103

Earlier quoted context omitted.

> UBI - it will surely have huge second-order effects I absolutely agree, and I think these justifiable and yet ill-defined concerns are shared by a lot of UBI opponents. I just hope anyone trying to come to an informed decision remembers to include unrestrained capitalism's second-order effects on the pro/con list.

>>unrestrained capitalism It sounds scary when put like that but it just means people free to interact, while secure from other social actors in their person and property. By the nature of voluntary configuration, interactions have a tendency toward being mutually beneficial, and there are corrective feedback loops that naturally exist in a voluntary society to reduce those that aren't (e.g. scammy operators increasi…

> so there is no fundamental deficiency in unrestrained capitalism

Except a tendency toward consolidation and monopolies. And, inherent in the word "unrestrained", a tendency to use corporate money to unduly influence politics to benefit the corporation at the expense of the public interest.

> it just means people free to interact, while secure from other social actors in their person and property

It's kind of irrelevant anyway, all I really meant was UBI should be evaluated in comparison to "the status quo", whatever you choose to label it.

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

#180

Post by rayiner » Mon, Jan 08, 2018, 11:16 PM UTC

mywittyname wrote: post #157

rayiner wrote: post #65

Earlier quoted context omitted.

> they ignore the importance of income and social stability They don't ignore it, they're just not ignorant about the costs of income and social stability. For example: I grew up in a relatively modest house (3BR, 1,100 square feet) about 40 minutes outside of D.C. Growing up, there were quite a few young families in our neighborhood. Average household income was probably about $70k/year in today's money--relatively…

The population has grown such that urban areas have far less acreage per person than they use to, so there's more competition for housing in that neighborhood. Plus, income distributes follow a pareto distribution: in DC a 60th percentile family earns between ~35% more money than an 50th percentile family does, and a 70th percentile family earns ~35% more than a 60th family does, etc. Those two factors are behind the…

> The solution is to tear down low-density suburbs and replace them with high density residencies. But there's no incentive to do this because people are more than willing to just spend more time commuting so they can have a yard to mow on the weekends.

It’s hard to tell what people actually want. The lots in my neighborhood, laid out in the 1930s, has a standard plot size of 1/15 of an acre. This is a suburb of detached single family homes. A few people have doubled up the lots, but for the most part people just deal with having no yard. Today, the minimum lot size is five times bigger, 1/3 of an acre! So is there no incentive to build denser because people are willing to commute more to have the space, or because it’s illegal to do anything other than build ultra low density housing?