San Francisco to Ban Rent-Setting Software Amid Gouging Worry • Hacker News Board

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#41

Post by jjav » Mon, Aug 05, 2024, 9:46 PM UTC

kspacewalk2 wrote: post #24

Eumenes wrote: post #19

Earlier quoted context omitted.

Assessments should be done when a home is sold, not based off speculative real estate market. This hurts everyone, esp those on fixed incomes.

Okay, maybe I'm making unwarranted assumptions that assessments are done the same everywhere, and property taxes are decided on the same way everywhere. Here's how it's done in Ontario where I live: 1. Assessed value ≠ market value. Assessed value is determined by some criteria such that sqft, #rooms, desirability of neighbourhood, pools, etc correlate with the final value. 2. Actual value doesn't matter at all. If e…

> Is it different in California?

It is different in California on all three points listed.

In California the assessed value is the purchase price (thus, market value) on year zero (when you buy it). From there on assessed value goes up 2% every year.

The base tax is 1% of the assessed value. (Actual property tax is higher because they can tack on all kinds of fees).

So if you buy a $1M home, your taxes this year are $10K (plus other local fees). Next year it will be $10.2K and so on.

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#42

Post by davidw » Mon, Aug 05, 2024, 9:59 PM UTC

janalsncm wrote: post #37

dmoy wrote: post #20

Earlier quoted context omitted.

GP has confused percentage of purchases in some recent year(s) with percentage of ownership. Also conflated "private equity" with all investor-owned homes (which includes a huge chunk of publicly traded REIT stuff too). Investor-owned in some recent year(s) exceeded 25% of purchases. Private equity was a subset of that. Overall private equity owns like... 1-1.5% of housing units (which includes a ton of apartments).

Yes, 25% of current ownership seems high to me. Most homes have been owned for decades. But percent of new purchases is a leading indicator of where the market is heading.

It's a trend because housing is scarce. Some of these companies come right out and say this stuff in their SEC filings. They're telling you that they will lose money if more housing comes online.

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#43

Post by paulryanrogers » Mon, Aug 05, 2024, 10:30 PM UTC

gsk22 wrote: post #17

ToucanLoucan wrote: post #11

Earlier quoted context omitted.

I mean, 1 in 4 family homes in America is owned by a private equity firm now. That's certainly not helping .

Where are you getting that statistic? I have seen considerably lower numbers. For example, [1] indicates only 1 in 60 rental homes are owned by private equity. That doesn't even include owner-occupied homes. [1]: https://ourfinancialsecurity.org/2022/06/letters-to-congress...

Regardless it's a growing and worrying trend. Especially as they target and exploit the most vulnerable like mobile home parks and nursing homes.

No one would mind if they were building new homes or significantly improving the facilities in proportion of their rent increases.

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#44

Post by rented_mule » Mon, Aug 05, 2024, 10:36 PM UTC

larsiusprime wrote: post #31

kspacewalk2 wrote: post #24

Earlier quoted context omitted.

Okay, maybe I'm making unwarranted assumptions that assessments are done the same everywhere, and property taxes are decided on the same way everywhere. Here's how it's done in Ontario where I live: 1. Assessed value ≠ market value. Assessed value is determined by some criteria such that sqft, #rooms, desirability of neighbourhood, pools, etc correlate with the final value. 2. Actual value doesn't matter at all. If e…

In California Prop 13 makes it so people who bought their properties decades ago essentially have their assessments frozen whereas people who bought more recently get assessed closer to market value. This means that two side by side buildings can have assessed values differing by orders of magnitude. This has all the inequitable downstream consequences you would expect.

Yep, and that's one of many parts of the supply issues in California. We bought our house 25 years ago. The house right next door is half the size of ours and just sold. Their property tax will be ~3x what ours is.

We might consider moving to a looser market, and therefore opening up one more house in a tight market, but we're retired and a large increase in property tax (plus potentially larger increases every year if it's outside California) is a serious disincentive for us.

Prop 13 is friction that resists the smoothing out of conditions across regions. It reduces market efficiency.

p.s. - It doesn't help the housing situation that we have access to incredible natural features all around us, but that's more about California's demand side.

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#45

Post by blackhawkC17 » Mon, Aug 05, 2024, 10:40 PM UTC

falcolas wrote: post #40

davidw wrote: post #36

Earlier quoted context omitted.

The claim that "supply and demand" somehow do not apply to housing as they do most goods is an extraordinary one, and extraordinary claims require extraordinary evidence. Once again, yes, RealPage might be able to push things a few percentage points up and that's bad, but it is simply not capable of turning Houston prices into Los Angeles prices.

> The claim that "supply and demand" somehow do not apply to housing as they do most goods is an extraordinary one, and extraordinary claims require extraordinary evidence. The extraordinary evidence is the proof of collusion - which we have. That's all that it takes to corrode away the basic tenants of a free market, and it's why collusion is policed the way it is. It is, frankly, a mistake to play down the impact t…

> Once again, yes, RealPage might be able to push things a few percentage points up and that's bad, but it is simply not capable of turning Houston prices into Los Angeles prices.

You didn’t address the point though. If the issue is collusion, why haven’t landlords hiked mid-tier city rents to San Francisco levels?

Or maybe it’s simply supply and demand.

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#46

Post by davidw » Tue, Aug 06, 2024, 1:18 AM UTC

paulryanrogers wrote: post #43

gsk22 wrote: post #17

Earlier quoted context omitted.

Where are you getting that statistic? I have seen considerably lower numbers. For example, [1] indicates only 1 in 60 rental homes are owned by private equity. That doesn't even include owner-occupied homes. [1]: https://ourfinancialsecurity.org/2022/06/letters-to-congress...

Regardless it's a growing and worrying trend. Especially as they target and exploit the most vulnerable like mobile home parks and nursing homes. No one would mind if they were building new homes or significantly improving the facilities in proportion of their rent increases.

> No one would mind if they were building new homes

I get what you're saying - producing new homes is actually what we need and would be more beneficial compared to just buying up existing housing stock - but the same NIMBYs who I mentioned further up would actually be upset about people building new homes.

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#47

Post by Lammy » Tue, Aug 06, 2024, 1:19 AM UTC

SoftTalker wrote: post #3

Ignoring the elephant in the room which is that by their own doing the housing supply is woefully inadequate.

Relevant: in 1959 the Army Corps of Engineers predicted SF's 2020 population to be 1,018,000 while the actual 2020 census SF population was 873,965 https://archive.org/details/futuredevelopmen00unit/page/n31/...

The Bay Area as a whole is an even more striking difference — 1959's estimate for 2020 was 14.4 million (same link above), and the actual 2020 population of the nine counties was almost exactly half that at 7.7 million https://vitalsigns.mtc.ca.gov/indicators/population

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#48

Post by SoftTalker » Tue, Aug 06, 2024, 3:17 AM UTC

falcolas wrote: post #30

SoftTalker wrote: post #28

Earlier quoted context omitted.

Unless you have people willing to sit with unrented houses, no it won't. Some big rental owners might be able to afford that but the guy with one or two rentals he manages himself cannot afford to let them sit empty. RealPage may maximize rents but the maximums will be lower if there is more supply.

Over half of the for-profit rental stock in the US is owned by people or companies with over 25 units. And they are more than happy to let empty units stay empty if it will keep the value of their other units high. It's not the "1-2 house landlords" driving prices up. https://www.pewresearch.org/short-reads/2021/08/02/as-nation... "Individual investors owned nearly 14.3 million of those properties (71.6%), comprising…

If true I guess one way to address that is to tax vacant rental units so there's a penalty for leaving them vacant. That seems to me to be hard to administer though.

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#49

Post by 7e » Tue, Aug 06, 2024, 8:59 AM UTC

SoftTalker wrote: post #3

Ignoring the elephant in the room which is that by their own doing the housing supply is woefully inadequate.

SF is still a desirable place to live. That doesn't mean residents are willing to make it undesirable by changing the character of the city and make it unlivable. Building housing is like building roads: it doesn't fix the problem. The problem simply expands to fill available supply. People reproduce to fill all available housing, and prices stay sky high again, only now the city is shittier. Habitat control is the only option to preserve livable cities.

Re: San Francisco to Ban Rent-Setting Software Amid Gouging Worry

#50

Post by falcolas » Tue, Aug 06, 2024, 3:23 PM UTC

blackhawkC17 wrote: post #45

falcolas wrote: post #40

Earlier quoted context omitted.

> The claim that "supply and demand" somehow do not apply to housing as they do most goods is an extraordinary one, and extraordinary claims require extraordinary evidence. The extraordinary evidence is the proof of collusion - which we have. That's all that it takes to corrode away the basic tenants of a free market, and it's why collusion is policed the way it is. It is, frankly, a mistake to play down the impact t…

> Once again, yes, RealPage might be able to push things a few percentage points up and that's bad, but it is simply not capable of turning Houston prices into Los Angeles prices. You didn’t address the point though. If the issue is collusion, why haven’t landlords hiked mid-tier city rents to San Francisco levels? Or maybe it’s simply supply and demand.

Or maybe people living in mid-tier cities can't afford San Francisco grade rents? If we need to pull out a catchy (if overly simplified) Econ 101 principle, we could use "What the market can bear," and Houston jobs don't pay as much as jobs in San Francisco.