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Oregon passed sweeping housing crisis laws

latimes.com

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Re: Oregon passed sweeping housing crisis laws

#231

Post by quickthrower2 »

BurningFrog wrote: post #71
pchristensen wrote: post #45

Here’s an anti rent control argument I haven’t heard (this applies to stricter rent control regimes like NYC, SF - not sure about this new OR law). Getting a spot in a rent-controlled apartment is a valuable, non-transferable asset. If you buy a house and it gains $100,000 in equity, you can sell it and buy a bigger house, sell it and cash out while getting a smaller house, borrow against it. With a rent-control asse…

Your observation also highlights how rent control is institutionalized privilege. Those who already have a home are given an ownership right to that status, while those without a home are being permanently excluded.

In a fair system we’d all need to take turns in being homeless and share our homes around.

Re: Oregon passed sweeping housing crisis laws

#232

Post by freewilly1040 »

seizethecheese wrote: post #227

Everyone is commenting about rent control, but the cap is very high. 7% + inflation. The real news is banning single-family home zoning.

I wonder if that figure will hold though. The progressive strategy may well be to get any sort of limit passed now, and lower it later.

Re: Oregon passed sweeping housing crisis laws

#233

Post by pchristensen »

Dumblydorr wrote: post #51
pchristensen wrote: post #45

Here’s an anti rent control argument I haven’t heard (this applies to stricter rent control regimes like NYC, SF - not sure about this new OR law). Getting a spot in a rent-controlled apartment is a valuable, non-transferable asset. If you buy a house and it gains $100,000 in equity, you can sell it and buy a bigger house, sell it and cash out while getting a smaller house, borrow against it. With a rent-control asse…

Great idea, I second that! Could there be a special marketplace for rent controlled places? Could allow people to swap with each other and/or use public servant status as a credit, to help teachers, firefighters, etc get living in very pricy districts.

This article does a good job explaining the problems with that approach - https://pedestrianobservations.com/2019/06/22/teacher-housin...

Re: Oregon passed sweeping housing crisis laws

#234

Post by nostrademons »

sampo wrote: post #2

> Lawmakers passed a first-in-the-nation cap on rent increases Unfortunately, rent control will have the opposite effect of what Oregon thinks, and only make housing scarcity worse. https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent... https://www.governing.com/gov-institute/voices/col-rent-cont... > in an effort to spur new homebuilding, became the only state to eliminate single-family-only zoning in many…

Limits on rent increases (at levels well beyond the rate of inflation) don't have the same negative effects as rent controls.

To actually resolve the housing crisis, you need there to be sufficient profit potential that private landlords are incentivized to build more housing. Rent control forbids this. Limits on rent increases, however, don't, really. Building a new apartment complex usually takes 3-4 years from permitting to completion to move-in. If rent increases are capped at 7% annually, then by the time your new project is ready for move-in, you can count on rents having gone up by 30-40%, assuming that that's where the market-clearing price would be. And if they haven't, they'll be higher the next year, and so on, until they equilibrate.

The idea behind caps on rent increases is to slow the bleeding and minimize disruption to families - having your rent go up 7% for 5 years is a lot less of a problem than having it go up 35% in one year and getting a month to decide whether to renew your lease, because it gives you time to look for alternatives and figure out what else in your life needs to change to make the numbers work.

Re: Oregon passed sweeping housing crisis laws

#235

Post by AnimalMuppet »

quickthrower2 wrote: post #231
BurningFrog wrote: post #71

Earlier quoted context omitted.

Your observation also highlights how rent control is institutionalized privilege. Those who already have a home are given an ownership right to that status, while those without a home are being permanently excluded.

In a fair system we’d all need to take turns in being homeless and share our homes around.

Maybe, for some definitions of "fair". There are other definitions where that wouldn't be fair at all.

Re: Oregon passed sweeping housing crisis laws

#236

Post by kspaans »

nostrademons wrote: post #234
sampo wrote: post #2

> Lawmakers passed a first-in-the-nation cap on rent increases Unfortunately, rent control will have the opposite effect of what Oregon thinks, and only make housing scarcity worse. https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent... https://www.governing.com/gov-institute/voices/col-rent-cont... > in an effort to spur new homebuilding, became the only state to eliminate single-family-only zoning in many…

Limits on rent increases (at levels well beyond the rate of inflation) don't have the same negative effects as rent controls . To actually resolve the housing crisis, you need there to be sufficient profit potential that private landlords are incentivized to build more housing. Rent control forbids this. Limits on rent increases , however, don't, really. Building a new apartment complex usually takes 3-4 years from p…

Yup, this is how "rent stabilization" works in Ontario, Canada. When a tenant has a lease, rent increases are capped to a rate set by the government. When a tenant leaves, there is "rent decontrol" and the landlord can charge whatever the market will bear for the next tenant. Similarly newly built units for rent get market rates. No one dictates what a landlord can charge, only how much they can increase rents for existing tenants.

Of course this does lead to shenanigans to get old tenants out, but it's not rent control in the sense that all rents are everywhere anytime are set by the government.

Re: Oregon passed sweeping housing crisis laws

#237

Post by arkem »

mdorazio wrote: post #120
pchristensen wrote: post #45

Here’s an anti rent control argument I haven’t heard (this applies to stricter rent control regimes like NYC, SF - not sure about this new OR law). Getting a spot in a rent-controlled apartment is a valuable, non-transferable asset. If you buy a house and it gains $100,000 in equity, you can sell it and buy a bigger house, sell it and cash out while getting a smaller house, borrow against it. With a rent-control asse…

I would love to see that data as well, but can’t find any reliable numbers that control for newness/niceness of the apartments. Anecdotally, I pay about $1000 a month less than market rate on the west side of LA due to rent control, which realistically is a big reason I haven’t already left LA entirely. It would take an offer in the $50k range to buy me out. Landlord offers tend to be lower than that [1]. [1] https:/…

I'm in a similar position. I was thinking about finding a new smaller place in the west side perhaps one with an in unit laundry or better air-conditioning.

Looking around I've realized that rent control has me paying significantly less than market and that even if I downsized I'd probably end up paying $1000/month extra if I moved. After realizing this I'm unlikely to move until/unless I decide to leave LA.

I'm happy I'm getting a good deal but it doesn't feel very efficient for the housing market over all.

Re: Oregon passed sweeping housing crisis laws

#238

Post by toomuchtodo »

coredog64 wrote: post #223
toomuchtodo wrote: post #196

Earlier quoted context omitted.

The other option is to simply default and walk away from the property if you can't find a tenant, and you can't afford to eat the loss of selling it.

Not every US state is a non-recourse state.

Speaking from experience, you can still default in a recourse state with little consequence.

Re: Oregon passed sweeping housing crisis laws

#239

Post by wpietri »

AnthonyMouse wrote: post #104
wpietri wrote: post #31

Earlier quoted context omitted.

> Unfortunately, rent control will have the opposite effect of what Oregon thinks, and only make housing scarcity worse. It depends on the kind of rent control. Housing has important asymmetries it's reasonable to address through legislation. One is asymmetry in scale: you have one unit; landlords have many more. This gives them stronger negotiating power. Another is cost of change. It's much more expensive for me in…

> The first 15 years of a new building are free from rent control, and after that they can increase rent at 7% above CPI, meaning in real terms rents can still double circa every 10 years. And if a tenant moves out, landlords can raise rents as much as they like. There are two possibilities here. One is that the maximum rent control rate is above the market rate of housing cost increases, in which case those rent con…

I think there are plenty more than two possibilities, because there are many kinds of "good" that we could be pursuing, some which conflict and some which reinforce.

As an example, One of the major problems for developers in building both housing and office space is how cyclical the markets are. When prices are spiking, developers rush to build. This can lead to gluts, causing big price crashes later on as they try to pay their mortgages.

It's perfectly possible that smoothing out the spikes of short-term price increases results in a more stable, predictable market. That would not only mean it'd be better for tenants, but it'd be better for landlords in that they are more confident they'll have good ROI over time. Risk mitigation can be very valuable in long-term investments.

And of course there are many more possible complex interactions. E.g., if lower turnover means richer social connection and better neighborhoods, then renters might be willing to pay more over the long term, keeping landlord property values up. Or more stable prices mean that people are less likely to, say, vote to expropriate large landholdings and shift to the sort of socialized housing we see in other countries.

So no, I don't think there are two possibilities here.

Re: Oregon passed sweeping housing crisis laws

#240

Post by wpietri »

BurningFrog wrote: post #61
wpietri wrote: post #31

Earlier quoted context omitted.

> Unfortunately, rent control will have the opposite effect of what Oregon thinks, and only make housing scarcity worse. It depends on the kind of rent control. Housing has important asymmetries it's reasonable to address through legislation. One is asymmetry in scale: you have one unit; landlords have many more. This gives them stronger negotiating power. Another is cost of change. It's much more expensive for me in…

> One is asymmetry in scale: you have one unit; landlords have many more. This gives them stronger negotiating power. This is one of those theoretical arguments that sounds good but have no empirical foundation at all. If it was true the gigantic Walmart could completely dick me around when buying socks and toilet paper. In reality prices are very competitive. It also completely ignores that fact that most landlords…

> If it was true the gigantic Walmart could completely dick me around when buying socks and toilet paper. In reality prices are very competitive.

If you switch TP vendors, that's not a big deal for either Walmart or you, so yes, prices are competitive. But if you switch housing, you are switching 100% of your housing, which will be ~30% of your total budget. I've had 13 landlords, and not one of them has had only one unit. And small-time landlords tend to have other work, so regardless, it's a much smaller deal to them to have a tenant move.

> It also completely ignores that fact that most landlords are small operations, and often the tenants are richer than their landlords.

I look forward to your citations on both points.

I'm sure the average landlord doesn't own more than, say, 10 units. But in major markets there are a small number of large rental companies, so I suspect the average unit is not owned by a small landlord.

I'm entirely skeptical about your claim that tenants are "often" richer than landlords, but would be happy to be corrected with data.

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