California Approves Statewide Rent Control • Hacker News Board

Re: California Approves Statewide Rent Control

#271

Post by fountainofage » Thu, Sep 12, 2019, 1:57 AM UTC

lbacaj wrote: post #254

justinhj wrote: post #194

Earlier quoted context omitted.

Which is why vacant property tax makes sense for popular areas

It’s not so easy, how do you prove this? What if someone’s on vacation or has mail being delivered there etc. or comes in once in a while or Airbnb’s it’s much harder to impliment I think than it sounds.

Well, what you do is get rid of prop 13 and do yearly appraisals. Then you just tax the property on what it's worth, and if a landlord refuses to rent, then the tax is now a vacancy tax.

The real problem is we're not taxing these properties at the true value they could provide to society, so a massive market inefficiency exists.

Re: California Approves Statewide Rent Control

#272

Post by holy_city » Thu, Sep 12, 2019, 1:58 AM UTC

ng12 wrote: post #247

holy_city wrote: post #161

Earlier quoted context omitted.

After taxes it's a bit under $6,900 so 40% of that is ~$2,700. Browsing Zillow/Apartments.com/Padmapper shows several thousand listings for studios under $2k and single bedrooms around $2.2-2.7k, depending on area. SF proper seems pretty tiny and the most expensive, is everyone just trying to cram in there? Do people try not to commute?

It's closer to $6,600, and that's without spending a dollar on retirement or benefits. > Do people try not to commute? Spoken like someone who's never tried to commute in SF. Public transportation options are extremely limited, owning a car is extremely expensive.

I mean I'm being open here and saying I don't understand why CoL is so high in SF, since researching it from afar doesn't make it look that much pricier than what I've seen living in other cities.

And I commute in LA, it's not exactly enjoyable or cheap. But it's cheaper than living within walking distance of my office.

Re: California Approves Statewide Rent Control

#273

Post by mike_d » Thu, Sep 12, 2019, 1:59 AM UTC

zuminator wrote: post #225

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.

Landlords want to be able to raise rents at whatever rate maximizes profit without generating turn over - except when they want turn over (to get renters out).

When the market will bear an increase less than rent control, it gives landlords something to point at as justification and help mitigate turn over. When the market will bear a greater increase, it is unfair and harmful to communities, etc. etc. etc.

Re: California Approves Statewide Rent Control

#274

Post by track_me_now » Thu, Sep 12, 2019, 1:59 AM UTC

joshAg wrote: post #180

mc32 wrote: post #87

Earlier quoted context omitted.

I think your argument is contradicting itself at least partially because you say if an LL (landlord/landlady) was already getting market price, they’d price themselves out of the market so the 7% cap is more than enough... so in essence you’re saying the market will tell the LL not to raise the rent... which then means you’re relying on market forces... but you’re saying despite that you need a YoY cap... so somethin…

No no that's not my argument here at all. I'm not making any argument about whether the cap is enough or needed. The parent comment was arguing that because the law now says that rent couldn't increase by more than 7% they were now being advised to increase rent by that much every year (ostensibly because they are now planning to do this), and my response is that it's absurd to claim that anything in the law will cha…

what you are arguing is the captured surplus under the supply curve. We can assume that demand is essentially inelastic for a relatively large price range (hence the introduction of rent control) so the extracted value is the area under a curve that changes rapidly over the short term, or a less volatile curve that shifts out 7% every year. I don't see how either of you can be confident in the expected future actuals.

Re: California Approves Statewide Rent Control

#275

Post by pcwalton » Thu, Sep 12, 2019, 1:59 AM UTC

rayiner wrote: post #170

As a Marylander, I’m okay with this. Let California destroy itself. Better for the rest of us.

An allowable increase of 5% per year plus inflation that expires after 10 years and exempts single-family homes and new construction isn't going to destroy anything. That amount is in line with the amount market rate rents have been rising on their own. We're not talking San Francisco rent control here.

Re: California Approves Statewide Rent Control

#276

Post by kissickas » Thu, Sep 12, 2019, 2:00 AM UTC

> California lawmakers approved a statewide rent cap on Wednesday covering millions of tenants, the biggest step yet in a surge of initiatives to address an affordable-housing crunch nationwide.

As though California is at all symptomatic of the problem of providing affordable housing in the rest of the nation. They might as well say it's the biggest step taken in an affordable-housing crunch globally.

A whole article about California's housing problem without a single mention of Prop 13, though? That's some impressive willful ignorance.

Re: California Approves Statewide Rent Control

#277

Post by jquery » Thu, Sep 12, 2019, 2:00 AM UTC

phil248 wrote: post #138

I'm shocked at the ideological fervor here and the fact that virtually no one seems to have looked at the details of the actual bill. This is nothing like the rent control ordinance in SF that has caused $3000 units to get stuck at $500 rents. That will never happen under this law. The allowable increases are so much higher than "normal" rent control laws that any given unit will catch up to market rates in a matter…

Are there any provisions for periods of high inflation in the market?

Re: California Approves Statewide Rent Control

#278

Post by travisjungroth » Thu, Sep 12, 2019, 2:01 AM UTC

cko wrote: post #239

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.

As a landlord this doesn’t make too much sense. The value of the property is net operating income divided by cap rate, so vacancies would lower value. It doesn’t matter what the gross scheduled rent is in that calculation.

You can also look at the value as discounted future cash flow. And in that calculation, an empty apartment that the buyer is confident they can fill quickly and rent for $5k is worth more than a full one renting for $4k.

Also, if you take your reasoning to the extreme then an empty apartment building has a negative value.

Re: California Approves Statewide Rent Control

#279

Post by seph-reed » Thu, Sep 12, 2019, 2:01 AM UTC

mabbo wrote: post #43

It seems more and more clear that California, or at least those in power in California, don't want to fix the housing problem. Because if you're a land owner, the only problem is people trying to spoil the good times. All this VC money pouring into the pockets of tech employees, and a larger and larger fraction going straight into landlords' pockets. What's not to love? If actually you want lower home prices, build m…

Are there really not enough houses? I've always been under the impression that there exists more than enough housing, but a lot of it is empty.

Re: California Approves Statewide Rent Control

#280

Post by mythrwy » Thu, Sep 12, 2019, 2:01 AM UTC

wanderer2323 wrote: post #227

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

Increased land or property taxes (while eliminating income taxes) might help.

Make it undesirable to sit on large amounts or expensive property, reduce the propensity to resell for gain and put a stop the home ownership casino which in some ways looks like bitcoin speculation over the past two decades.

Give credit for primary residence (and or legit Ag or industrial use, but maybe collecting land taxes from industry is preferable to capital gains even.).

After these deductions tax like crazy for the privilege of squatting on what I think truly is, by nature, communal social property (land). That should dampen down the speculation and return prices to earth while encouraging primary single residence ownership.

Oh, and stop inflating financial bubbles that distort the price of a basic human need. For starters.