California Approves Statewide Rent Control • Hacker News Board

Re: California Approves Statewide Rent Control

#671

Post by namesbc » Thu, Sep 12, 2019, 7:48 AM UTC

adamsb6 wrote: post #662

ac29 wrote: post #321

Earlier quoted context omitted.

The point was that this CA statewide bill is quite different from places like SF. New state law: 5% + inflation SF: 60% of inflation. This has has never been over 2.9% a year since the law changed in 1992 from a fixed 4% [0]. I think one could sanely argue that allowing increases of up to 5% plus inflation is a suitable restriction, while limiting increases to significantly below inflation is not. [0] https://sfrb.or…

What if the market clearing price increases at greater than 5% plus inflation? This isn’t a free lunch, the tradeoff of a price cap is under provision of a good.

We currently have a drastic under provision of a good to the tune of 3.5 million homes in CA alone.

This under provision is not because building new homes isn't profitable, it is because realtors, landlords and homeowners are actively blocking new supply in order to extract above market rents from desperate people.

Adding a rent cap of MORE THAN DOUBLE inflation will have no affect on supply, it is ridiculously profitable to rent out your property right now.

CA would have to do something like cap rents at less than $500 per bedroom before profit margins would affect supply.

Re: California Approves Statewide Rent Control

#672

Post by negamax » Thu, Sep 12, 2019, 7:51 AM UTC

Most new (first time tenants) will get a cliff rent with next few years of upside factored in. But this will benefit existing tenants. I still think right law to change would be to allow high rises and right government intervention would be to create large scale new units

Re: California Approves Statewide Rent Control

#673

Post by pmiller2 » Thu, Sep 12, 2019, 7:54 AM UTC

macinjosh wrote: post #220

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…

So does this bill automatically expire at some point? If not, why not? Not many laws are easily repealed as the side effects they create work to entrench them in society. A bad person is a person that think they can engineer other people's lives for the better through legislation.

Yes, it does. As currently written, it expires in 2030.

Re: California Approves Statewide Rent Control

#674

Post by mratzloff » Thu, Sep 12, 2019, 7:55 AM UTC

adamsb6 wrote: post #665

joshAg wrote: post #159

Earlier quoted context omitted.

There's certain hot zones in cities where the rent can increase by much greater than 7% YoY. In those hot zones no one's wages are rising at the same rate, so that law is the only thing that prevents the people previously living there from being forced to move even if they would rather stay. Essentially, it's the policy that is in response to all the stories about retirees being forced out of a home they rented for d…

What happens to the people that want to live there and are willing to pay a higher price for it?

"What happens to the firemen and teachers?" is a more important question than "What happens to the tech workers?"

Re: California Approves Statewide Rent Control

#675

Post by ovi256 » Thu, Sep 12, 2019, 7:57 AM UTC

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 maximum 5% increase per year, it takes 37 years for a $500 unit to catch up to the $3000 market price. So this law doesn't help that much with that particular case.

Re: California Approves Statewide Rent Control

#676

Post by nostrebored » Thu, Sep 12, 2019, 8:14 AM UTC

mratzloff wrote: post #664

heyoni wrote: post #653

Earlier quoted context omitted.

Yea but moving as an individual is stressful and 10x moreso for families. We’re trying to keep people off the streets and from having to make bad decisions without hurting the landlords ability to capitalize on their investment. This is a compromise.

Not to mention a sudden, unexpected expense in a situation where renters are on a tight budget and likely don't have much or any savings.

What are you talking about... One of the nicest things about being a renter is being able to choose to live in a place where you can get those savings.

Re: California Approves Statewide Rent Control

#677

Post by strstr » Thu, Sep 12, 2019, 8:17 AM UTC

kortilla wrote: post #618

manfredo wrote: post #428

Earlier quoted context omitted.

Housing cannot be both affordable and and a good investment. The definition of a good investment is a piece of property that has a price that increases over time. The nature of exponential growth means that eventually housing will become unaffordable if it is perpetually a good investment. Society's expectation that housing is a good investment results in people taking on significant debt to buy increasingly expensiv…

You’re conflating “an investment” with “an exponentially growing investment”.

That's sort of the classic interpretation of investment. AFAIK, the first question most people ask about investments is "what is the expected rate of return (relative to the risk)?".

I would not describe my car as an investment, since it's basically guaranteed to depreciate. Housing could be expected to behave in a similar manner (although that would likely require a decrease in population growth).

Re: California Approves Statewide Rent Control

#678

Post by mratzloff » Thu, Sep 12, 2019, 8:22 AM UTC

dcolkitt wrote: post #487

dgzl wrote: post #409

Earlier quoted context omitted.

Construction isn't easy anymore. we've taxed and regulated it into a luxury.

Maybe, but construction may not even be necessary. Shipping containers can now be easily retrofitted into stylish apartments. They can easily be stacked eight stories tall. 95% of the work can be done in overseas factories and is subject to the same globally competitive downward price pressure as every other manufactured good. Build them in Shenzen at a wholesale cost of $30,000 per pod, ship them to San Franciso for…

Oh my god. When Hacker News begins literally suggesting the Stacks from Ready Player One as a solution to anything it's time for me to close my browser.

Re: California Approves Statewide Rent Control

#679

Post by [deleted] » Thu, Sep 12, 2019, 8:23 AM UTC

adamsb6 wrote: post #662

ac29 wrote: post #321

Earlier quoted context omitted.

The point was that this CA statewide bill is quite different from places like SF. New state law: 5% + inflation SF: 60% of inflation. This has has never been over 2.9% a year since the law changed in 1992 from a fixed 4% [0]. I think one could sanely argue that allowing increases of up to 5% plus inflation is a suitable restriction, while limiting increases to significantly below inflation is not. [0] https://sfrb.or…

What if the market clearing price increases at greater than 5% plus inflation? This isn’t a free lunch, the tradeoff of a price cap is under provision of a good.

[deleted]

Re: California Approves Statewide Rent Control

#680

Post by Katzenjammer » Thu, Sep 12, 2019, 8:25 AM UTC

The same thing will happen as does in NYC.

1. Single people live in large apartments, but don’t move because they are paying way below market, what a smaller place will cost.

2. Because people aren’t moving, there is limited availability so new comers pay very high rents.

3. Landlords won’t rent to bad credits because its hard to evict.

4. Builders won’t build for rental because they don’t want to deal with rent control. (In nyc, new housing is not rent controlled.).

Basically, it’s good for people who have apartments, but bad for people who are looking.