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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#311

Post by 1123581321 »

c22 wrote: post #289
1123581321 wrote: post #213

Earlier quoted context omitted.

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 confiscat…

What term do you propose? I agree confiscation is imprecise, but I can’t think of another word that means an intentional act by a government to deprive a citizen of their property, or the value of their property.

Re: California Approves Statewide Rent Control

#312

Post by pishpash »

joshAg wrote: post #255
pishpash wrote: post #212

Earlier quoted context omitted.

The thing that would be different is the game theoretic situation where every landlord feels compelled to do that so the market rate increases by 7% per annum.

They could already do that. Nothing was stopping them from forming an oligopoly or landlords association/guild or whatever you want to call it and raising rent in lockstep by 7% each year. The entire point of the 7% cap is to stop that from happening above 7%, because certain hotzones experience that already, not because of a formal agreement, but because the demand outstrips supply by that much and supply can't (or…

Let me put it more simply, all that rent control does is put a damper on large increases [1], but the rental market will still seek a market price. The only way to do that is to spread the increases to leaner years where the natural rate increase would be lower than the cap. Every landlord would independently conclude the same, no collusion needed.

To undercut that this year would mean being below market price in a future year. The only arbitrage would be between present and future prices. Perhaps some subset of landlords only seek to rent out for the front-end years, so they would have a different calculus, but all that would do is to pull down the average transaction price by a little, according to their size in the market. So if the current price demands a natural increase of 2%, maybe the market will clear at 5% instead of the 7% max, but it remains the case that there will necessarily be years where the clearing price is higher than without rent control.

[1] This is assuming the government "guesses" it right that 7% is the average rate of increase over the long term. If it is below average, then the market gets severely distorted.

Re: California Approves Statewide Rent Control

#314

Post by refurb »

justinhj wrote: post #194
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.

Which is why vacant property tax makes sense for popular areas

So solve a problem created by regulations with more regulations?

Re: California Approves Statewide Rent Control

#315

Post by dragonwriter »

joshAg wrote: post #255
pishpash wrote: post #212

Earlier quoted context omitted.

The thing that would be different is the game theoretic situation where every landlord feels compelled to do that so the market rate increases by 7% per annum.

They could already do that. Nothing was stopping them from forming an oligopoly or landlords association/guild or whatever you want to call it and raising rent in lockstep by 7% each year. The entire point of the 7% cap is to stop that from happening above 7%, because certain hotzones experience that already, not because of a formal agreement, but because the demand outstrips supply by that much and supply can't (or…

> Nothing was stopping them from forming an oligopoly or landlords association/guild or whatever you want to call it and raising rent in lockstep by 7% each year

Well, “Nothing” is an unusual way of referring to the Sherman Anti-Trust Act.

Re: California Approves Statewide Rent Control

#316

Post by claudeganon »

dgzl wrote: post #267
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

I don't understand how that's possible. Housing is a good/service, how can that be decommodified?

Social housing exists in many forms across the developed world. As I commented up-thread, look into its history in places like Vienna.

Re: California Approves Statewide Rent Control

#317

Post by MagnumPIG »

bsder wrote: post #148
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…

> they are now advising a default annual increase of the maximum allowed (7 percent before inflation). 7 percent is a pretty high allowed increase. I suspect that it really doesn't do much except stop gouging in the case of someone who had really cheap rent in a place that gentrified suddenly.

Agreed, here in Montreal it's something like 2%.

Re: California Approves Statewide Rent Control

#318

Post by seanmcdirmid »

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…

Have there been leasing periods in your past where rent increases exceeded 7 percent? Is that common?

Also, I assume there is some market pressure to consider, if your increases outpace supply and demand, then tenants would simply move, right?

Re: California Approves Statewide Rent Control

#319

Post by mactrey »

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.

From the article: "[The measure] was unopposed by the state’s biggest landlords’ group."

It shouldn't be a surprise that more landlord-friendly rent control measures get less resistance from landlords.

Re: California Approves Statewide Rent Control

#320

Post by raldi »

cybersnowflake wrote: post #299
raldi wrote: post #292

Earlier quoted context omitted.

I didn't say that. But the fewer Republicans there are in Sacramento, the better the chances of SB-50 (or something like it) getting passed.

Ummmm...you do realize the Dems hold supermajorities in both houses right? Do republicans have psychic powers they're using to control the Dems now?

A single state senator (one of the few Democrats who opposes SB-50) blocked the bill from being voted on.

The supermajority was irrelevant.

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