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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

#291

Post by taysic »

taneq wrote: post #282
joejerryronnie wrote: post #263

Earlier quoted context omitted.

The price of basic necessities is based on what people will pay for it (or what merchants can charge for it). If everyone has $10 today to buy groceries and all of a sudden, tomorrow everyone has $100 to buy groceries, what do you think is going to happen to the price of groceries?

Nothing much in the long run, competition between supermarkets is pretty cutthroat and it should level out not too far from where it is now.

If UBI is paid for with inflation than prices will go up to capture an equivalent in value. If UBI is paid for by increased taxes then all businesses will need to raise prices.

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

#292

Post by bigmanwalter »

In Montreal, we have rent control that has worked spectacularly. Rent is significantly below what it costs in comparable cities across Canada, the United States and even Europe. This all stems from our laws originating in French common law which is decidedly more for-the-people than British law.

Our rent control works because it applies between leases. Last year rent increases were frozen at 0.5%. In the apartment that I moved into, the landlord is not allowed to increase the rent more than 0.5% above what the previous tenant was paying. Increase are also allowed in order to reflect any major renovations performed to the unit. Increases due to renovations must be anchored to the cost of the renovation, and distributed over the next 10 years of rental. This system works spectacularly for renters. Some people may argue that this leads to more slums, but it effectively incentivises landlords to renovate their units in order to maximize their returns.

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

#293

Post by carlmr »

kelnos wrote: post #214
cowsandmilk wrote: post #97

Earlier quoted context omitted.

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…

Except that in SF, a landlord can get a tenant for nearly any price, because demand really is that high, and supply really is that low. On the occasion that a rent controlled apartment goes back into the market in SF, it's snapped up within a week, even if the listing price is set above market rate. A savvy renter (which you have to be, if you want to get a place in SF) will know that they're paying a higher price fo…

>in SF, it's snapped up within a week, even if the listing price is set above market rate

That makes it the market rate for the apt though. You'd be above market rate if it didn't get rented out in a normal timeframe.

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

#294

Post by Decade »

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.

Don’t count on it.

https://alamedasun.com/news/appeal-costa-hawkins-rent-contro...

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

#295

Post by pm24601 »

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…

Home ownership causes the same problem.

So does:

* good quality schools, rather commute long distances than change schools;

* a really good city with a nice downtown;

* a spouse's job location;

* friends' location;

* ... point is there are many reasons for someone to not want move closer to the current job.

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

#296

Post by Decade »

glitch003 wrote: post #234
horsecaptin wrote: post #205

What are the chances that the number of rent controlled homes will go down in the next five to ten years?

This number will always go down, because in SF only houses built before 1980 are subject to rent control. Therefore, no houses are being added to rent control. And the number can only stay constant or go down.

Except that demolishing a rent-controlled apartment is practically illegal.

And in response to the state law requiring ADUs to be legalized in single-family homes, the Board of Supervisors wrote a law requiring ADUs in most single-family homes to be rent-controlled.

Now one of Supervisor Safaí’s friends is even proposing a new building voluntarily put under rent control. It may get killed by city politics, though.

http://www.sfchronicle.com/bayarea/article/Developer-wants-t...

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

#297

Post by patricius »

bigmanwalter wrote: post #292

In Montreal, we have rent control that has worked spectacularly. Rent is significantly below what it costs in comparable cities across Canada, the United States and even Europe. This all stems from our laws originating in French common law which is decidedly more for-the-people than British law. Our rent control works because it applies between leases. Last year rent increases were frozen at 0.5%. In the apartment th…

How does it work from the landlord’s perspective?

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

#298

Post by Decade »

mrgordon wrote: post #171
almost_usual wrote: post #14

Earlier quoted context omitted.

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 housing crisis is much, much, much older than the 2008 crisis. The underbuilding has been going on for as long as almost everybody can remember.

https://twitter.com/enf/status/764614550750494721

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

#299

Post by crdoconnor »

0wing wrote: post #26
crdoconnor wrote: post #17

Earlier quoted context omitted.

>Rent control removes the incentive to build new apartments. Not even 1% as much as untaxing land and property does.

Actually the opposite, by taxing land in high demand urban cores it would incentivize more efficient use of the land - i.e. building up to support more occupants or higher value economic activity. [1] Deregulating the zoning restrictions would allow more buildings to be built. [2] Here is a startling fact: in 2014 there were 142,417 housing starts in the city of Tokyo (population 13.3m, no empty land), more than the…

>Actually the opposite, by taxing land in high demand urban cores it would incentivize more efficient use of the land

That's exactly what I was saying. The owners of inner city land pay very little cost for monopolizing land that could be put to better use. It's a store of value that is unlikely to go down in value. There is nothing to offset the instinct to hoard.

>The same generation has now pulled the ladder up behind them to spit down on future generations.

All of the "it was boomers what done it" is just the 1% playing identity politics as a means of scapegoating and divide and conquer.

At the end of the day, the 1% millenial children of 1% boomers are going to be the beneficiaries of this ladder pull-up.

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

#300

Post by lern_too_spel »

hindsightbias wrote: post #59
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…

I'm all for getting rid of rent control - as long as she gives up Prop 13 too.

Get rid of both, but there's no reason to gate one on the other.
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