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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#31

Post by ahelwer »

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 affordable. How can you possibly have affordable housing in a system where housing increases in value (cost) at 5% a year? Who could possibly afford it after several decades of compound growth?

Re: California Approves Statewide Rent Control

#32

Post by bradlys »

Prop 13 but for renters now too!

I wonder if this was pushed by landlords. It's easier to push a 5% hike in rent every year than random 10-20% hikes. Especially in a nearly tapped out market. The prices are already astronomical and the home prices are fluctuating/faltering. In 10 years, the rent will be 63% higher. And that's after inflation. Your $3,000 1-bedroom will be nearly $4900 after 10 years. Unbelievable. Will FAANG prop up landlords by adding 5-10% TC increases every year? Startups certainly won't. They stopped increasing comp a few years ago.

Re: California Approves Statewide Rent Control

#33

Post by tmh79 »

melling wrote: post #16
tmh79 wrote: post #10

Earlier quoted context omitted.

To be clear, this is a 20 year old article, the literature on rent control has changed a lot since this was written. Basic economic consensus rn seems to be that rent control is a poor long term solution to rising housing costs but a necessary short term solution as the required supply shock wouldn't even be able to happen in the near term even if regulatory barriers are eased due to labor, construction, and land cos…

It’s a 20 year old story about rent control in San Francisco. So, we are talking about a long term problem? “ A few months ago, when a San Francisco official proposed a study of the city's housing crisis, there was a firestorm of opposition from tenant-advocacy groups. ”

yes, and there was a huge well funded study a few stanford professors conducted of rent control in SF in 2018 that is a much more accurate study of the affects of rent control policies.

"Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighborhood."

To be clear, the rent control studied was a yearly rental increase of ~2/3 CPI, or 1-2% annually, while market rents increased at about 7% annually since the 50s in SF. The proposed policy is a rent cap of around 8%, which is higher than the aggregate rent increase in the SFBA over the past 30 years or so (also 7%). This isn't a rent control law as much as it is an anti gouging law, disallowing landlords from increasing rent 10-20% YoY, which happens to maybe 1-3% of the market.

https://www.brookings.edu/research/what-does-economic-eviden...

Re: California Approves Statewide Rent Control

#34

Post by baby »

bgorman wrote: post #27

One thing I have noticed as I have become more aware is that many of our laws are aimed at trying to freeze a moment of time, often by piling on contradictory policies on top of each other. Subsidize home loans Ban new construction Ban rent increases It is no wonder why housing prices/rents continue to rise in these markets. In software engineering sometimes conclude that a rewrite is necessary. How can we completely…

So are you saying that landlord should be able to double your rent like that?

Re: California Approves Statewide Rent Control

#35

Post by pitaj »

tmh79 wrote: post #18
souprock wrote: post #12

Oh joy, politicians trying to get votes from the economically unaware. If you thought there was a housing crisis, just wait. It's going to be crazy. Here is a different article, more tolerant of private browsing: https://www.forbes.com/sites/adammillsap/2019/09/04/more-ren...

Limiting rent increases to max 8% (what this bill encodes) is only going to affect maybe 1-3% of lease agreements annually. This isn't about vast controls of housing stock, it about limiting 20% rent spikes people experience.

At the cost of further disincentives to actually building more housing. What a great idea.

Every field of economics agrees that rent control causes harm to the people it's supposed to help.

Re: California Approves Statewide Rent Control

#36

Post by skybrian »

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...

Re: California Approves Statewide Rent Control

#38

Post by dawhizkid »

DevKoala wrote: post #22

Rent control is abused in SF. Every engineer I know, who has been living in SF for over 5 years is currently paying an absurd amount compared to their monthly income. I even sub-leased an apartment from a friend who took off a sabbatical, and he didn’t want to lose his rent control. I don’t know who rent-control is supposed to benefit, but it seems broken. Eventually these places end up in the hands of people who kno…

Rent wasn’t that much cheaper 5 years ago, if at all, save renting one of the luxury high rises.

Re: California Approves Statewide Rent Control

#39

Post by phil248 »

baby wrote: post #23

I’m surprised to read negative opinions about rent control. The alternative to rent control is having one’s rent double next week. I’m amazed that rent control was not a thing!

Most rent control implementations are far too restrictive and create severe market distortions that can last generations. This one, thankfully, is not, and the allowable increases mean units are unlikely to get too far out of whack with market rates.

Re: California Approves Statewide Rent Control

#40

Post by [deleted] »

dawhizkid wrote: post #24

For those living in SF, this significantly expands the number of eligible apartments for rent control. Right now only multi-unit homes/apartment complexes built before June 1979 have rent control. Now everything (except single family homes/owner occupied duplexes) built within last 15 years on rolling basis is eligible. Given how slowly SF builds housing, the fact that anything built 2004 and earlier is eligible basi…

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