Average Rent in San Francisco Has Dropped $1k This Year • Hacker News Board

Re: Average Rent in San Francisco Has Dropped $1k This Year

#211

Post by jeffbee » Mon, Dec 28, 2020, 5:12 PM UTC

daniellarusso wrote: post #195

jjoonathan wrote: post #164

Earlier quoted context omitted.

Well, here's the thing: pipes can be built. Big pipes can replace small pipes. Plant capacity can be upgraded. Shocking, I know, but it's true.

So, rip up all the roads, start digging, and start upgrading? So, who pays for that? All the taxpayers, or the builders, or the potential new tenants?

Here's the thing: maintenance of existing infrastructure that serves existing residents is almost entirely paid for by astronomical "impact fees" paid by new developments. In the East Bay, 85% of EBMUD's maintenance (not capital!) budget is funded from impact fees. These can be really high. Any new dwelling in the East Bay pays a minimum of $26000 for water capacity and a minimum of $4100 for wastewater capacity. It's a big pyramid scheme and the existing residents better get a clue and permit some new construction, or the public utility districts are going to have to change their strategy and get all that money from annual assessments on existing properties.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#212

Post by 0xffff2 » Mon, Dec 28, 2020, 5:13 PM UTC

WhompingWindows wrote: post #170

legolas2412 wrote: post #58

Earlier quoted context omitted.

I am in bay area, but my apartment complex refused to readjust rent to reflect the drop in rent (2500$ to 1800$!). I decided to break the lease and move to a better area.

Great on you! To complete the math, what was the "break" penalty and how much did your new rent save you? These economics are fascinating, SF is crazy.

Unless the lease had other terms written in, California generally allows landlords to continue to charge rent until the unit is rented again (or the end of the lease term).

Re: Average Rent in San Francisco Has Dropped $1k This Year

#213

Post by daniellarusso » Mon, Dec 28, 2020, 5:13 PM UTC

jeffbee wrote: post #191

daniellarusso wrote: post #140

Earlier quoted context omitted.

So, the infrastructure can handle double its current utilization? Aren’t the sewers in SF literally over a century old? No issues with adequate water supply and sewage treatment?

These are bad faith arguments and therefore you are either debating in bad faith, or a dupe. San Francisco's gross water demand has been falling consistently for the last 50 years. Not per-capita. Gross. In 1998 the demand was 82 million gallons per day and in 2019 it was 63 million, with a population 17% greater. The more people you pile into a city, the less demand there is, because grossly wasteful activities like…

Now, that is half a response.

You failed to address anything regarding wastewater treatment.

80 million gallons per day treated with no rain, but rain, it can be 500 gallons.

So, will climate change put additional pressures on wastewater treatment as well?

Also, has SF only recently had a handle on wastewater treatment?

Was 1998 wastewater treatment capacity inadequate?

Also, if you have historical data on wastewater metrics, I would like to take a peek.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#214

Post by fennecfoxen » Mon, Dec 28, 2020, 5:14 PM UTC

oconnor663 wrote: post #133

mym1990 wrote: post #82

Earlier quoted context omitted.

Those landlords don't try to sell that small kitchen, they DO sell that small kitchen. When I was shopping for an apartment in SF 2 years ago there was no spot that did not have at least 2 other parties looking at it. There was no room for negotiation or to even take a day to think it over, if you walked away from it, there were 2 people right behind you to take it.

> There was no room for negotiation or to even take a day to think it over, if you walked away from it, there were 2 people right behind you to take it. Naive question maybe, but if demand is that high, why don't prices rise even higher to balance it out a bit? Presumably most landlords would prefer another hundred or two a month at the cost of a few extra days on the market?

> Naive question maybe, but if demand is that high, why don't prices rise even higher to balance it out a bit?

It's not always legal to charge more in San Francisco.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#215

Post by epistasis » Mon, Dec 28, 2020, 5:14 PM UTC

daniellarusso wrote: post #195

jjoonathan wrote: post #164

Earlier quoted context omitted.

Well, here's the thing: pipes can be built. Big pipes can replace small pipes. Plant capacity can be upgraded. Shocking, I know, but it's true.

So, rip up all the roads, start digging, and start upgrading? So, who pays for that? All the taxpayers, or the builders, or the potential new tenants?

I'll tell you who won't pay for it: existing homeowners, because they rely on new buildings' property taxes for anything to work. And in SF, they rely on payroll taxes from high income earners.

And in SF, the "dig once" policy means that anytime something substantial is done, nearly everything is redone, which is why Van Ness has been under construction for sooooo long: utilities.

The property wealth in SF appreciates at absolutely massive rates, but they rely on poorer new entrants to fund everything. And that old property wealth is the same political power that stops the city from a accommodating new people, restricting entry to ever more wealthy new entrants.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#216

Post by imtringued » Mon, Dec 28, 2020, 5:14 PM UTC

sokoloff wrote: post #189

renewiltord wrote: post #127

Earlier quoted context omitted.

Land owners are not in the business of giving money away. That's precisely why increased taxes will not result in increased rents. After all, if they could increase rents and the market would clear it when there's a tax, why wouldn't they when there's no tax? They're not selling at cost-plus, they're trying to maximize profit.

Because renting in SF trades off in part against buying in SF at the margins (and against renting nearby to SF and against moving out of SF entirely). If buying in SF becomes more expensive due to an LVT, then renting becomes more competitive on the margin. I find it to be strangely magical thinking that land-value-taxes will precisely and surgically extract 100% of their value from landlords with no players in the g…

The idea behind the LVT is not about making rent cheaper. It's to reward landlords for using land more efficiently. If the land costs a fixed amount you want to build as many units as possible and make each unit as attractive as possible.

Compare that to a conventional property tax where you have to pay more tax for each unit of housing you build. You also have to pay property taxes for home improvement meaning old properties won't be renovated ahead of time and therefore won't be rented them out. Instead the house will only be available for sale with the hope that the buyer will renovate the property.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#217

Post by chillacy » Mon, Dec 28, 2020, 5:15 PM UTC

daniellarusso wrote: post #153

oconnor663 wrote: post #133

Earlier quoted context omitted.

> There was no room for negotiation or to even take a day to think it over, if you walked away from it, there were 2 people right behind you to take it. Naive question maybe, but if demand is that high, why don't prices rise even higher to balance it out a bit? Presumably most landlords would prefer another hundred or two a month at the cost of a few extra days on the market?

Time is money. Why hold out and continuously interview potential tenants, when multiple people are literally asking you to take their money? Cash today is better than cash in a few days.

Yes this: in real estate investing this is called the vacancy rate and it eats into profits, sometimes significantly. Too much vacancy and you can’t cover the mortgage.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#218

Post by toiletfuneral » Mon, Dec 28, 2020, 5:15 PM UTC

oblio wrote: post #124

RhodesianHunter wrote: post #96

Earlier quoted context omitted.

> unwilling to give up on their single family homes I think that expecting people to "give up their homes" is more than unreasonable. The reasonable compromise being that builders can build in more densely once the current owners sell it.

I think the point is: what if they don't sell it, at all? Kids move out of the house, parents retire at 65 and live to 85+. That's 20 years, a whole generation.

[dead]

Re: Average Rent in San Francisco Has Dropped $1k This Year

#219

Post by runarberg » Mon, Dec 28, 2020, 5:15 PM UTC

fennecfoxen wrote: post #120

robbyt wrote: post #99

Dear SF, More apartments built will not help make housing more affordable for normal people. Learn about the NYC real estate market- even pre covid apartment vacancy was extremely high, and the true numbers are unknown because building developers are manipulating the market by releasing units slowly. With all the excessive inventory in NYC, you'd think that a normal person (defined by median income) could afford to b…

Dear SF, More apartments built are the only thing to make housing more affordable for normal people. But, when you think of them, you're thinking way too small. You need to think in terms of, like, literally doubling the number of apartments available, and they may then be in reach of normal people once more. You also need to get yourself together and reverse that trend where your transit system has carried fewer peo…

> More apartments built are the only thing to make housing more affordable for normal people

What? No! Rent control is among other something that can lower the rent for normal people. I know SF has rent control, but currently it only applies as long as you don’t move.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#220

Post by nostrademons » Mon, Dec 28, 2020, 5:16 PM UTC

cogman10 wrote: post #109

shortandsweet wrote: post #104

Earlier quoted context omitted.

What should we do robbyt?

Taxing unoccupied homes and apartments will fix things real fast.

Land value tax would be simpler. Tax everything based on the unimproved value of the land. Unoccupied homes and apartments become money-losers, and owners are forced to sell them to people who would rent them out or occupy them, or else it becomes a money-losing enterprise. No need to figure out what's occupied or unoccupied, and no loopholes. Just tax the externality and let the market figure out the rest.