California Approves Statewide Rent Control • Hacker News Board

Re: California Approves Statewide Rent Control

#281

Post by tmh79 » Thu, Sep 12, 2019, 2:02 AM UTC

0xEFF wrote: post #162

tmh79 wrote: post #56

Earlier quoted context omitted.

this doesn't impact new buildings (only buildings older than 15 years old), its impact on housing creating is miniscule compared with the regulatory barriers of zoning and cost barriers of impact fees and construction costs.

The value of a new building is lower because it’s expected future value is lower.

The value of a new building (for finance purposes, IE getting a loan for construction) is based on the DFCF over the next 15 years, this is an industry standard. This rent control implementation doesn't start until the building is 15 years old, it will not impact real estate finance for new buildings.

Re: California Approves Statewide Rent Control

#282

Post by pcwalton » Thu, Sep 12, 2019, 2:02 AM UTC

skybrian wrote: post #36

Before anyone gets too excited, the cap is apparently 5% plus inflation per year [1] which seems pretty mild? (For comparison, Oregon's rent control is at 7% plus inflation, and San Francisco varies but is below 3% [2].) [1] https://la.curbed.com/2019/9/10/20857225/california-rent-con... [2] https://sfrb.org/topic-no-051-years-annual-allowable-increas...

San Francisco is 60% of inflation, which is the cause of all the problems. It's not even in the same league.

Re: California Approves Statewide Rent Control

#283

Post by deelowe » Thu, Sep 12, 2019, 2:02 AM UTC

freehunter wrote: post #251

fuzzieozzie wrote: post #115

This rent control is a result of populism - plain and simple. Rent control works for those already renting - and that is about it! Everyone else suffers: those moving to the area, the landlords and those wanting to build more.

It's interesting that some people in this thread are claiming rent control hurts landlords, while others here are discussing how it helps landlords increase profits.

Hurts new or potential landlords. Helps those who already have good cash flowing properties.

Re: California Approves Statewide Rent Control

#284

Post by pcwalton » Thu, Sep 12, 2019, 2:05 AM UTC

inlined wrote: post #181

I recently bought a house in CA. Knowing this legislation was pending I didn’t get roommates. I’d rather AirBnB than be forced into rent control. That’s now two rooms off the market.

Did you buy a single-family home? The bill exempts single-family homes.

Re: California Approves Statewide Rent Control

#285

Post by rackad » Thu, Sep 12, 2019, 2:05 AM UTC

This is a good idea. I don't know about the state of California. I have lived in NY and rent was crazy. Since I signed my lease in the early 90s, I was paying peanuts compared to my "new" neighbors who used to pay twice the amount.

Re: California Approves Statewide Rent Control

#286

Post by mabbo » Thu, Sep 12, 2019, 2:06 AM UTC

seph-reed wrote: post #279

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.

Not enough to fix the housing problems CA has. Not nearly. And if that's the problem, tax empty homes.

But even then, even if there are empty homes, building more will still fix the problem. Let those foolish owners leave the homes empty- we can build more anyways.

Re: California Approves Statewide Rent Control

#287

Post by raldi » Thu, Sep 12, 2019, 2:07 AM UTC

spaceflunky wrote: post #264

raldi wrote: post #133

This is a misleading headline. The problem with rent control is that it allows many well-off individuals to collect ever-growing rent subsidies, to the point where after 10 or 15 years their rent is a joke compared to what their (often less-fortunate) neighbors are paying. This bill does not have that flaw. Crucially, it sets the maximum allowable rent increase to be well above, not below, the historic long-term rent…

What you're ignoring is voters resoundingly rejected Prop 10, the rent control measure that went on the ballot LESS THAN ONE YEAR AGO. Which was pretty close to AB1482. Yet, despite the majority of voters saying no, the legislature felt it necessary to push forward with legislation anyways. Above all else, the government ignoring a direct vote from the people is most disgusting of all and reason enough for why this s…

AB-1482 is nothing like Prop 10.

Re: California Approves Statewide Rent Control

#288

Post by lawnchair_larry » Thu, Sep 12, 2019, 2:08 AM UTC

dgzl wrote: post #259

I'm a renter in Oregon and I've been outspoken about this long before the laws were passed. From my experience, people who support heavy laws, regulations and taxes don't spend enough time considering potential side effects. They feel like with enough support, they can just force anything they want to happen, while completely disregarding the market. I feel like an amount of the general public just wants Big Daddy go…

That’s definitely the general mentality in Portland, so I’m not surprised.

Re: California Approves Statewide Rent Control

#289

Post by c22 » Thu, Sep 12, 2019, 2:08 AM UTC

1123581321 wrote: post #213

c22 wrote: post #111

Earlier quoted context omitted.

You don't need to confiscate anything. We have an abundance of housing stock (nationwide, many more existing homes than families to fill them). If you make it impossible to be a private landlord then these properties will decrease in value until most citizens can afford to buy a house. Public housing will only be necessary for a small percentage of outliers. New housing will be built to be sold at a modest profit and…

Using the law to destroy the value of someone’s asset until they abandon it is confiscation, just indirectly.

Sorry, it might be rude, it might be unfortunate for existing landlords, it might even be a terrible idea, but I don't see how you can call it "confiscation". If the defacto situation is maintained ownership until a decision is made to sell that is not confiscation.

If the city builds a trash transfer center right next to my house causing my property value to plummet I might be upset, but nothing has been confiscated from me because I do not own "the character of the neighborhood" except in some small collective part.

Re: California Approves Statewide Rent Control

#290

Post by ac29 » Thu, Sep 12, 2019, 2:08 AM UTC

bsder wrote: post #156

tolmasky wrote: post #134

Earlier quoted context omitted.

Losing an entire year of 1.2K rent breaks even with 1.7K rent after roughly 3.3 years , breaks even (1.7(x-12)=1.2x, x = 40 months). And that’s if the new tenants stay with no churn and you don’t play the same game forcing them out for another year. Had they just raised your rent $200, the break even point becomes almost 6 years. I don’t understand your landlords at all. With regard to the story before it, it sounds…

There's some weird legal implications that I know that I don't understand. I see this all the time where a large ownership company will leave apartments or commercial real estate totally unoccupied rather than allow a cheaper rent. I don't understand what they gain.

Losses on rental, including depreciation and fixed costs like property tax can be counted against profits on other units. These losses can be carried forward and applied against future taxes indefinitely in the US.

So, leaving an apartment empty that could be rented for $X isnt quite a straightforward loss of $X, since you also gain the ability to offset future taxes.