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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#631

Post by optimusclimb »

m463 wrote: post #448
throwaway5752 wrote: post #202

Earlier quoted context omitted.

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.

> The building was purchased, "refurbished" and the rent was reset to a very high number.

And if someone was willing to pay that number, then that's what the place was worth.

Re: California Approves Statewide Rent Control

#632

Post by kelnos »

joshAg wrote: post #294
closeparen wrote: post #256

Earlier quoted context omitted.

Many landlords are not paperclip maximizers. REITs are, but small time families often charge below-market rents to the long term tenants they personally like or can’t be bothered to replace. They feel comfortable doing this because they can always revert to market rate later. With that long-term optionality going away, some will revert to market rate or as close as legally possible right now.

Sure some absolutely will, but there were enough paperclip maximizers relative to the total available rental units that a law limiting their maximizations had enough political will to actually pass through the legislature even though it's blindingly obvious that putting a limit on rent increases encourages all landlords to always increase rent by the maximum allowed.

If eligible landlords in SF all started raising rents by 7% per year, every year, the city would empty out. As much as housing is crazy expensive in SF, there's no way the market would bear those kinds of increases

Re: California Approves Statewide Rent Control

#634

Post by robomartin »

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…

At a basic level I would not have any issues with these laws if they also limited expenses. In other words, if you are going to use force to limit income then landlords ought to have the right to limit expenses proportionately. For example, make tenants responsible for wear and tear on the property, just like you pay for mileage on a rental car and are responsible for damages.

As it is, they are using force to limit income while expecting the landlord to offer the same product and services and foot the bill on unlimited expenses.

How about legally limiting salary increases while requiring the same or more work? And, when you change jobs, you are only allowed to make 10% more. Oh, yes, but you have to spend thousands to renew your credentials.

And how about truly severe penalties for tenants who destroy or damage property?

Anyone who has been a landlord for with more than a handful of properties knows how much of a nightmare it can often be.

Try running 10, 20 or 100 units and see how quickly you are going to bug out once even this mild form of rent control rears it’s ugly head. Because you know, with almost absolute certainty, that this is the proverbial slippery slope. And nobody wants to be the guy waiting for the last seat out of the Titanic.

Oh, yeah, unintended consequences: If Airbnb is more profitable than conventional renting...

Re: California Approves Statewide Rent Control

#635

Post by mlyle »

joshAg wrote: post #628
yojo wrote: post #595

Earlier quoted context omitted.

I am a CA landlord of a single house. Keeping track of “market rate” is an annoying exercise and I tend to just leave the rate unchanged for multiple years (3-5) then bring it up in one go. The last time I did this the rent increased ~12%. Before, the tenant was happy because they got below market rent for 4 years, and I was happy because I could defer pricing work without long term penalty or risking a move-out duri…

You can still do it that way. But instead of raising the rent 12% in one year, you can just raise it by 7% one year and then by 4% the next year. The tenant still gets below market rent for 4 years, you and can defer pricing work for as long as you want without penalty or risking a move out during a busy year. I think you might be overly worried for your situation. Your 12% example is an amortized difference of at mo…

The point is, if you decline an increase now-- and costs increase unexpectedly, you have a hard cap on how much you can do to adjust. This incents landlords to be more aggressive with pricing, because a mispricing now can extend to be mispriced for many years.

It also may change the equilibrium behavior, because it upsets a social norm and affects landlords' estimations of what other landlords will do.

Re: California Approves Statewide Rent Control

#636

Post by mlyle »

kelnos wrote: post #632
joshAg wrote: post #294

Earlier quoted context omitted.

Sure some absolutely will, but there were enough paperclip maximizers relative to the total available rental units that a law limiting their maximizations had enough political will to actually pass through the legislature even though it's blindingly obvious that putting a limit on rent increases encourages all landlords to always increase rent by the maximum allowed.

If eligible landlords in SF all started raising rents by 7% per year, every year, the city would empty out. As much as housing is crazy expensive in SF, there's no way the market would bear those kinds of increases

SF already has rent control, which limits most landlords to increasing rent at 60% of inflation.

Needless to say, costs are increasing faster than 60% of inflation... In turn, landlords are only willing to write leases at very high prices and the supply of rental units is even lower than it would be otherwise...

Re: California Approves Statewide Rent Control

#637

Post by anthony_doan »

optimusclimb wrote: post #631
m463 wrote: post #448

Earlier quoted context omitted.

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.

> The building was purchased, "refurbished" and the rent was reset to a very high number. And if someone was willing to pay that number, then that's what the place was worth.

That doesn't help the housing issues... which is the whole point of this article and the comment your replied to.

While what you're saying isn't false it's not going to solve anything. Unless you don't think there is a housing issue.

Re: California Approves Statewide Rent Control

#638

Post by foobar1962 »

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…

> The real solution to a housing problem is to incentivize and facilitate the building of more housing.

This argument comes up here in Australia with regards to Sydney and Melbourne in particular -- the two largest cities.

Building more houses only makes more sprawl. Increasing density causes problems for current residents and puts enormous strain on existing infrastructure[1].

The only real solution is to get people to live in other places that have more and cheaper housing.

[1] Not just utility infrastructure like water, sewer, power, gas, (roads, sanitation, what the Romans did for us etc) but natural environment and leisure like sport and recreation areas, parks and bush land, and (particularly in Sydney) beaches. It's really hard making new beaches for the increased population.

Re: California Approves Statewide Rent Control

#639

Post by inferiorhuman »

aswanson wrote: post #364
zamfi wrote: post #355

Earlier quoted context omitted.

> Housing in Silicon valley doesn't grow at the same rate as number of people coming here Bingo. And why not?

Existing homeowners don't want their living space turned into downtown Manhattan because there's a temporary exorbitant demand for ad click optimization and pic sharing networks.

Unfortunately for you San Francisco hasn't been a sleepy little fishing village for nearly 200 years. Its popularity isn't a temporary trend.

Of course I wouldn't mind becoming more like Manhattan in some ways. Compared to how pedestrian hostile the Bay Area is, Manhattan is heaven.

Re: California Approves Statewide Rent Control

#640

Post by d_burfoot »

> “The housing crisis is reaching every corner of America, where you’re seeing high home prices, high rents, evictions and homelessness that we’re all struggling to grapple with,” said Assemblyman David Chiu, a San Francisco Democrat who was the bill’s author.

If your new law is such a good idea, why do you have to lie so blatantly to promote it?

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