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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#221

Post by taffer »

ahelwer wrote: post #31

Perhaps an alternative real solution to the housing crises is the abolishment of professional landlords themselves. Why should we support a system where people can own many properties, each feeding them 1/2 of someone else's paycheck? Public-owned housing is the future. It works in Europe and it can work here. Treating housing as an investment vehicle is fundamentally incompatible with the ideal of housing being affo…

> Why should we support a system where people can own many properties, each feeding them 1/2 of someone else's paycheck?

That doesn't make much sense to me. 1/2 of the paycheck is only true for a few places with limited housing supply, which is the root cause of the problem. One could apply the same logic of "x% of the paycheck" to other spending items such as food and conclude that the state should also produce our food.

> Public-owned housing is the future. It works in Europe and it can work here.

Public housing in European countries accounts for less than 10% of the overall market and is mainly aimed at poor people. I do not see how this would be a general solution to the shortage of housing.

> Treating housing as an investment vehicle is fundamentally incompatible with the ideal of housing being affordable. How can you possibly have affordable housing in a system where housing increases in value (cost) at 5% a year?

True, but here, too, the cause is a lack of supply due to zoning, minimum parking requirements, minimum lot sizes and other restrictions.

Re: California Approves Statewide Rent Control

#223

Post by olliej »

gbacon wrote: post #203
olliej wrote: post #90

Earlier quoted context omitted.

Here's the problem: Prop 13 amended the CA constitution to prevent the state from increasing assessed property value by more than 2% a year. Landlords recognize that the real value is actually increasing faster than 2% and so increase the rent at the actual market rate. Given living costs make up the single largest force controlling cost of living, including for tax payer funded workers: police, firefighters, teacher…

So tax-control bad, rent-control good? Owners’ properties benefiting from services that they aren’t paying for also bad? Renters benefiting from services they aren’t paying for doubleplus good?

Renters are paying for services though - that’s part of what the rent they are paying to their landlord is for. But landlords currently aren’t paying that so the burden has been shifted to tenants income. So tenants are currently having to pay market rates for rent, and increased income tax to subsidize their landlord.

Re: California Approves Statewide Rent Control

#224

Post by macinjosh »

baby wrote: post #165
Mountain_Skies wrote: post #42

Earlier quoted context omitted.

Sorry if this comes off snarky but perhaps others posting here can see past next week. All too often these quick fix Band-Aids end up causing more problems in the long run while also spreading the problem far beyond where it had previously been contained.

Sure. In the mean time I’m not renting your place if it doesn’t have rent control. And anybody who does is insane.

Market solutions in action in these last 2 posts!

Re: California Approves Statewide Rent Control

#225

Post by zuminator »

bhauer wrote: post #21

I am a landlord in Oregon, but not California. The curious, although ultimately predictable, outcome of the new rent control measure in Oregon is that while I have historically had an arrangement with my property management to be restrained in annual rent increases, they are now advising a default annual increase of the maximum allowed (7 percent before inflation). This is because larger adjustments cannot be made if…

If it's true what you say that "the result will be more profitable for landlords, and hurtful to tenants," then it seems odd that landlords are not universally applauding rent control.

Re: California Approves Statewide Rent Control

#226

Post by thaumaturgy »

Litmus2336 wrote: post #93
thaumaturgy wrote: post #83

HN: According to the simple laws of supply and demand, housing prices would go down if we just increased supply to meet demand. Also HN: These rent controls are just going to make the housing problem in this state even worse. I don't get it. If the situation were really as simple as the first statement implies, then if this particular law was really going to have a catastrophic effect on housing, that would just mean…

I think you're intentionally misrepresenting the opposing viewpoint. If rent control artificially reduces the price of housing, more people will want to live in CA. Less houses will be built, as less profit is being made. Therefore, prices will be lower for those already housed, yet more people will be unable to purchase a home. Of course the million dollar question is how many less units will be built if they're les…

> If rent control artificially reduces the price of housing, more people will want to live in CA.

There were two other comments in this same subthread pointing out that people are in fact moving out of California. (One of them has been deleted.)

It's almost as if f(california_net_migration) is multivariate.

> Less houses will be built, as less profit is being made.

Residential construction in California has been approximately steadily climbing since 2008 [1]. Even if I believed your premise -- which I don't -- reality disagrees with it. The conditions surrounding new residential construction are so much more complex than merely "omg rent control".

A San Jose Mercury News article published last year discussed some of the influences in new residential construction: https://extras.mercurynews.com/blame/

Strangely absent from that article though is that people don't want to just "live in California"; they want to live in the same places where everyone else is already living. There is plenty of affordable land in the central valley, in Kern County, and lots of other places with stagnant economies and depressing downtowns. But if you want to live in San Francisco, expect to pay a stupid amount of money for a vacant lot [2]. Again: this is not a situation that rent control is going to have any effect on whatsoever.

> Therefore, prices will be lower for those already housed, yet more people will be unable to purchase a home.

Funny, this sounds quite a bit like the situation that Proposition 13 created back in 1978 [3].

And yet, proposition 13 is rarely cited as a significant contributor to California's housing issues, especially by the "this is simple supply and demand" crowd. Personally, while I suspect proposition 13 has contributed, there are lots of other factors, including foreign investment [4].

But maybe we'll soon see just how much of an effect that particular factor has had in housing costs [5].

Sure though, rent control is gonna have a huge impact on California's housing prices. Totally.

[1]: https://journal.firsttuesday.us/the-rising-trend-in-californ...

[2]: https://sanfrancisco.cbslocal.com/2016/10/21/san-francisco-v...

[3]: https://en.wikipedia.org/wiki/1978_California_Proposition_13

[4]: https://calmatters.org/housing/2018/03/data-dig-are-foreign-...

[5]: https://www.cnbc.com/2019/07/17/foreign-purchases-of-america...

Re: California Approves Statewide Rent Control

#227

Post by wanderer2323 »

claudeganon wrote: post #222

The real solution is to decommodify housing. >The landlords, like all other men, love to reap where they never sowed, and demand a rent even for the natural produce of the earth. -Adam Smith

>decommodify housing

genuinely curious what would that entail, in practical steps

Re: California Approves Statewide Rent Control

#228

Post by tmh79 »

pcwalton wrote: post #216
refurb wrote: post #186

Earlier quoted context omitted.

It also results in a lot of empty units. I was talking with a real estate agent in SF and he said it’s not unusual for landlords looking to sell their rent controlled building to just let units sit empty. Why? Because it can increase the value of the building by hundreds of thousands of dollars. Losing out on $24k worth of rent each year is easy if you know it comes with an extra $300k in your pocket when you sell.

Vacancy rates in San Francisco are very low compared to the rest of the state and the country. Rent control in SF is problematic not because it leads to vacancies but because the allowable increase is far too low, way below inflation.

yea, vacancy rates in SF are 2 - 3%, way way below the national median, and way below the california median as well

Re: California Approves Statewide Rent Control

#230

Post by notimetorelax »

nerfhammer wrote: post #171
baby wrote: post #119

Earlier quoted context omitted.

Rent control is a thing world wide. It’s not populism. It’s the same concept as free healthcare or free education. It’s here to ensure people can still find affordable places to live. You can’t make everything an investment if you want a healthy society.

It will not help you find an affordable place to live, it will help those who already have existing leases hold on to them forever. Rent control does not create an abundance of housing, it just creates a constituency of people that gets a better deal than those who don't.

It’s probably the case in CA now. Just want to mention that rent control in Switzerland extends to future tenants. It can be implemented so that it gives protections.
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