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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#441

Post by c22 »

1123581321 wrote: post #311
c22 wrote: post #289

Earlier quoted context omitted.

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.

Perhaps "devaluation"?

Re: California Approves Statewide Rent Control

#442

Post by AmericanChopper »

human20190310 wrote: post #322

There is no functioning market to begin with. Housing prices and rent are through the roof in California, yet supply is not rising to meet demand, largely because existing owners oppose new construction. Turnabout is fair play. If owners organize politically to control supply, tenants can organize politically to control prices.

> yet supply is not rising to meet demand, largely because existing owners oppose new construction.

So when over-regulation drives up prices, the appropriate response is to introduce new regulations to fight the other regulations? Because that’s exactly what this is. It won’t even improve the problem. The problem is that there are more people who want to live in California than there is housing. The reason for that is because regulations prohibit the market from increasing supply at a rate that comes anywhere near keeping up with demand.

Re: California Approves Statewide Rent Control

#443

Post by chillwaves »

joshAg wrote: post #176
tolmasky wrote: post #98

Earlier quoted context omitted.

What in your second paragraph doesn’t apply without rent control? In other words, what makes 7% the magic number? Your entire argument seems based on market forces (if you raise too much, your tenant leaves and if there’s no wealthy people to replace them, you're stuck). How is this not the case without rent control? Do wealthy tenants somehow appear without rent control?

Nothing. 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 change things so that you could make that sort of increase now if you couldn't already make that increase b…

These guys going to pretend they did not raise rents out of the goodness of their hearts and not cold hard economic reality. What's even the point except to spread FUD?

Re: California Approves Statewide Rent Control

#444

Post by zaroth »

ozzyman700 wrote: post #302
ahelwer wrote: post #31

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 affo…

We cannot, landlords are a parasite on productivity whose existence is based on the theft from their tenants. If it was not profitable they would not do it, if it is profitable, it is inherently unethical.

Radically untrue, bordering on nonsense.

Investment requires a return on investment. Return on investment must be commensurate with the risk. Risk adjusted returns are the reason the house/apartment was built in the first place.

Re: California Approves Statewide Rent Control

#445

Post by aianus »

cryptoz wrote: post #433
aianus wrote: post #365

Earlier quoted context omitted.

> Why does rent control deter creation of new housing? If you have a lot of money and you want to build/buy a rental property, would you do it in a) a growing city with no rent control where your discounted future cash flows are unbounded or b) a city where there is a law placing a ceiling on your returns. All else being equal, you are going to choose the city without rent control to build your new housing units in (…

I think your illustration has failed, though, because I would very much choose b). I consider a) as an evil in the world and would avoid participating in that if at all possible. b) sounds like a really good choice for long-term investment in in sustainable society. > All else being equal Okay but all else is not equal, and in the real world, it is never equal. These thought experiments do nothing to improve conditio…

> Okay but all else is not equal, and in the real world, it is never equal. These thought experiments do nothing to improve conditions in the real world, since they are based on flawed models of how people behave.

By that logic, nothing affects anything else and we should all give up trying to think or plan.

Re: California Approves Statewide Rent Control

#446

Post by wincy »

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.

There's plenty of houses if you're willing to move. I live in a house that would cost 1-4 million depending on what part of the valley you want to live in. There's good jobs and the schools are some of the best in the world. But it's a couple hours plane ride from NY and SF. This all just seems like utter madness to someone from the midwest.

Re: California Approves Statewide Rent Control

#448

Post by m463 »

throwaway5752 wrote: post #202
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…

This should be the top comment. The upshot is that if you are a family that is renting, you won't be forced out of your home on short notice. Try - for a moment - to imagine you are living close to your maximum expenses and your landlord increases your rent by 20% next year.

This happened to a family I know, except it was 50%. The building was purchased, "refurbished" and the rent was reset to a very high number.

Re: California Approves Statewide Rent Control

#449

Post by joshAg »

pishpash wrote: post #312
joshAg wrote: post #255

Earlier quoted context omitted.

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 f…

I'm saying that game theoretic situation you proposed where every landlord raises their price by a similar amount is exactly what the law is working to limit to a fixed ceiling because the situation you described already exists in enough areas that there's political will to do something to limit the maximum yearly percentage increase.

And the cap was explicitly set to be below the average rates of increase for many areas because the effects of the higher increases in those areas is what the law is explicitly trying to prevent.

Spreading the increase to a leaner year only works if the unit is below the market rate. If the unit is already within 7% or so of market rate, then market won't bear that increase. Instead the tenant will move out to a market rate unit. If the entire city increases in lockstep that means people near the bottom of the market will be literally priced out and either move to another city or resort to sleeping in their cars or become homeless, but everyone else will just downgrade the size of the unit they rent since once the price of the current unit exceeds their ability to pay. At the very top end of the market that will mean units will have decreasing occupancy rates assuming the landlord refuses to compete on price to increase demand and insists on capturing the 7% increase.

Re: California Approves Statewide Rent Control

#450

Post by zaroth »

baby wrote: post #130
ahelwer wrote: post #31

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 affo…

Agree 100% with you. Treating housing as an investment VS a human right is what got us here in the first place.

Housing in San Francisco is not a human right.

But your anger is misdirected. The distortion in the housing market is the direct and predictable result of specific government policy, of which TFA is just more of the same.

In this case by “more of the same” what I mean is a policy which will do nothing to solve the problem. This particular law seems to be relatively harmless.

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