“Your monthly rent .. shall increase from $2145 to $8900” • Hacker News Board

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#521

Post by simoncion » Mon, Mar 16, 2015, 9:13 AM UTC

andylei wrote: post #258

wpietri wrote: post #212

Earlier quoted context omitted.

> The market rent is exactly what other potential tenants are willing to pay. You're not understanding the scam. Suppose you move in to a place and pay the then-market rent of $1000 a month. Let's further suppose that it cost you $2400 to move, plus a shitload of time and effort that you'd rather not repeat. If the next year the market price remains $1000/month, the landlord can still raise the rent on you because yo…

> Suppose you move in to a place and pay the then-market rent of $1000 a month. Let's further suppose that it cost you $2400 to move, plus a shitload of time and effort that you'd rather not repeat. If the next year the market price remains $1000/month, the landlord can still raise the rent on you because you'll be reluctant (and possibly unable) to pay moving costs again many cities do not have rent control. the cit…

> many cities do not have rent control. the city i live in is one such city. the scenario you're describing does not happen here.

Because -as you mention at the end of the comment- your city builds new housing to meet demand. Rent Control was enacted BECAUSE landlords were raising rents to absurd levels in cities that (for a variety of disgusting reasons) found themselves incapable of building new housing to meet demand. :)

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#522

Post by simoncion » Mon, Mar 16, 2015, 9:17 AM UTC

randallsquared wrote: post #294

wpietri wrote: post #212

Earlier quoted context omitted.

> The market rent is exactly what other potential tenants are willing to pay. You're not understanding the scam. Suppose you move in to a place and pay the then-market rent of $1000 a month. Let's further suppose that it cost you $2400 to move, plus a shitload of time and effort that you'd rather not repeat. If the next year the market price remains $1000/month, the landlord can still raise the rent on you because yo…

> The exact amount they can get away with depends on personal tolerance and your time value for money, but given how much moving sucks, in practice it's quite a bit. It is my experience, as you say, that rent tends to increase by a small amount each year, usually about 2%. Even people on fixed incomes tend to get cost of living adjustments, though, and the range is about the same as typical rent increases. I do not s…

> In non-rent-controlled areas, rent is more expensive per month than buying the same sort of place...

Federal intervention has seriously distorted the home buying market with a variety of subsidies and tax writeoffs. Without this assistance, it would likely be substantially more expensive to buy than rent.

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#523

Post by simoncion » Mon, Mar 16, 2015, 9:25 AM UTC

tizzdogg wrote: post #497

brandonbloom wrote: post #94

Earlier quoted context omitted.

1) Landlords can diversify their properties, renters only get one. Everyone needs to live somewhere, nobody needs to be a landlord. 2) You've missed my point about moving costs. Even when the market favors renters, the lease renewal negotiation favors landlords. This is because moving costs time and money payable to third parties. As a result, the landlord can charge higher rents for renewals than they can for new le…

I actually know a few homeowners in San Francisco in this situation right now. They have extra units in their building (which is also where they live), and choose to leave it vacant rather than deal with the hassle of rent control. They do not need the income and would rather not bother with possibly getting a tenant who never leaves. It's not economically rational, but people are not always rational, especially when…

> They have extra units in their building (which is also where they live), and choose to leave it vacant rather than deal with the hassle of rent control.

Good for them. Better that they do this than take the rental income, and later whine about how terribly unfair renter protection laws are. :)

Based on my immensely scientific[0] survey of Internet Message Boards (and personal experience in the American Southeast), it seems that potential landlords sometimes forget that when they rent their property to others for use as the renters' home, the landlord loses almost all control over that property. This is right and just: everyone deserves a safe, secure, private place to live.

> Leaving units vacant is a rational way of dealing with SF's condo conversion laws.

Again, it's good for the landlords that they showed this much restraint.

The condo conversion laws prevent landlords from turning their apartment stock (that pays off smaller amounts over time) into condo stock (that pays off one large lump sum). These are sane and rational laws to have in cities that (for a variety of disgusting reasons) find themselves unable to create sufficient housing to meet demand.

[0] Ha!

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#524

Post by simoncion » Mon, Mar 16, 2015, 9:31 AM UTC

ghshephard wrote: post #92

vertex-four wrote: post #70

Earlier quoted context omitted.

If those landlords don't have clear plans to use the property, that is decidedly irrational.

Highly unlikely that 10,000 landlords with an extraordinary desire to maximize their return are being "irrational". If you rent out the property in San Francisco, you effectively lose control of what you can do with it. By not renting it out, you maintain control, and you can rent to family, make use of it yourself. I'm guessing that airbnb also is an attractive option now to get around the price-control laws.

If you rent out property for residential use anywhere in the US, you do lose control of what you can do with it, outside the bounds of your leasing agreement and local law regarding the topic.

Most jurisdictions recognize the need for a person to have a safe, personal, private space in order to have a happy and productive life. It is a recognition of this fact that causes most places to agree that a man's home is his castle, even if he is renting his home from another.

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#525

Post by davidw » Mon, Mar 16, 2015, 9:35 AM UTC

aceperry wrote: post #466

tptacek wrote: post #415

Earlier quoted context omitted.

A better way for him to have put it would have been: "Just like the Indiana state legislature can't by statute declare pi to be 3.14, San Francisco cannot repeal the law of supply and demand". Rent control or not, the law of supply and demand still applies; it just expresses itself in more dysfunctional and unproductive ways. That's the problem with rent control. Reasonable people can disagree about whether the publi…

"Rent control or not, the law of supply and demand still applies... or about whether rent control works. It doesn't work." Without rent control, I'm pretty sure that a LOT more people would be pushed out of San Francisco. It seems to me that places like San Francisco, New York, and a few other places are not typical of what other areas experience. I know it's fashionable amongst the libertarian set to blame problems…

Yes, there is a lot more going on:

http://techcrunch.com/2014/04/14/sf-housing/

Rent control isn't the answer, though. More housing is.

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#526

Post by simoncion » Mon, Mar 16, 2015, 9:38 AM UTC

cookiecaper wrote: post #510

vertex-four wrote: post #77

Earlier quoted context omitted.

Property ownership is an abstract concept enforced by law in the first place. There are theoretical economic models which do away with it to varying extents, or implement alternative ownership models. Why is it so mind-boggling to modify how it works in one specific instance? Actually, almost everywhere, when you have a tenant, you lose some ownership rights already, by law. For example, except in an emergency, you g…

The issue is not that acquiring a tenant restricts some rights that the owner would otherwise have; this is a compromise that the landlord knowingly makes when he rents. That control is relinquished for a pre-agreed, limited period of time , after which control will be returned to the owner, is the essence of renting. The issue is that some people seem to believe that once they are on someone's property, that person…

> The issue is that some people seem to believe that once they are on someone's property, that person loses the future ability to determine how that property is used...

Here's the thing, though. It's not as if existing rent control regulation catches landlords by surprise. If a prospective landlord is so unprepared as to be unaware of the rent control status of a property that he's planning on purchasing, then he's likely to do very poorly with pretty much all of the tasks that being a landlord requires of him.

In short, the fact that landlords rent out rent-controlled units is proof positive that they understand and accept the restraints imposed on them by rent control regulations. The fact that rent controlled apartments continue to be rented in SF (rather than withdrawn from the market for five years and converted into condos, as the law allows) is proof that rent control is not draining the lifeblood out of landlords.

The insane rents in SF are not due to rent control (how could they be?), but due to the pathological lack of new residential construction.

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#527

Post by simoncion » Mon, Mar 16, 2015, 9:43 AM UTC

cma wrote: post #430

vertex-four wrote: post #112

Earlier quoted context omitted.

Yes, they do have that right. They can use the building themselves, rent it to someone more trusted (family/friends), or sell it. They don't have to rent it out in the first place, so the building never has to come under rent control.

Yes, you technically can rent it for a limited time of zero, meaning they do have the right to rent it for a limited time, in some weird mathematical field theory of rental treating that as the additive identity element or something.

It's those exceptions that you glossed over in your initial comment that cause your assertion to be incorrect.

Landlords have a variety of legal options to terminate a rent-controlled lease. Those options are almost always less palatable than continuing the lease. This is by design, and -in areas with obscene housing supply issues- good for society. Housing security is far more important for societal well-being than the fullness of a landlord's wallet.

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#528

Post by kristopolous » Mon, Mar 16, 2015, 9:45 AM UTC

punee wrote: post #518

kristopolous wrote: post #465

Earlier quoted context omitted.

No they won't. Type in "econometrics of rent control" into your search engine. It's a fairly well studied question with a fairly consistent conclusion.

"econometrics of rent control" brings here. The fairly consistent econ 101 conclusion about rent control is that it never works. If you're talking about another conclusion, what is it?

Huh? The idea was without rent stabilization or leveling, rent would magically be more stable then if mechanisms were in place.

We don't need to argue about this. Rent control has been removed from many communities, and the rent becomes much more volatile without the stabilization control.

There's lots of actual case study literature on this.

These things aren't mere untested hypothesis where our personal politics come in to play - they are well studied.

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#529

Post by simoncion » Mon, Mar 16, 2015, 9:48 AM UTC

mod wrote: post #57

x0x0 wrote: post #9

Earlier quoted context omitted.

The law was passed in 1979. It's hard to seriously claim landlords could possibly be unaware of the law before becoming a landlord. If for some reason they just can't possibly see themselves in any other career, they may also choose to solely invest in buildings built since 1980.

Maybe I'm a bit ignorant here, but I don't always know the laws about things I'm doing before I do them. If I wanted to rent my apartment out I wouldn't go searching for laws--I'd go searching for tenants (and a basic lease agreement I could modify). If there's a required course or something, I guess it would make sense then.

Holy shit.

>If I wanted to rent my apartment out I wouldn't go searching for laws...

This is a dangerous level of ignorance.

When you rent a space that you own to another for residential use, you forfeit the vast majority of your privileges as a property owner. Pretty much every jurisdiction recognizes that a person requires a secure space to come home to in order to have a chance at a decent life.

If you're thinking about renting out your property, you're setting yourself up to be royally fucked if you don't familiarize yourself with the relevant laws.

Re: “Your monthly rent .. shall increase from $2145 to $8900”

#530

Post by jsprogrammer » Mon, Mar 16, 2015, 9:49 AM UTC

WalterSear wrote: post #232

jsprogrammer wrote: post #207

Earlier quoted context omitted.

It also conveniently omitted any calculation about how the owner is 'losing money', despite there being a ~$14,000 positive difference between what the tenant is paying per year and the taxes due.

Nelson: Hey, look how much Skinner makes. 25,000 dollars a year! Bart: Lets see, he's 40 years old, times 25 grand.. woah! He's a millionaire!

Do you imply that someone should be able to be a millionaire, or even 'rich', solely by collecting rent on real property? Real property that is apparently not even properly maintained?

Talk about market inefficiencies.