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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#71

Post by pitaj »

cryptoz wrote: post #45
pitaj wrote: post #19

Earlier quoted context omitted.

Rent control deters the building of more housing. It's literally part of the problem.

Can you explain what you mean? I don't follow. Rent control is a bandaid that provides a level of stability to the lower classes. They can live without daily anxiety of being rudely defacto 'evicted' by radical, surprise rent increases. This enables a society to continue to grow and function at a somewhat more sustainable pace, letting cities and counties grow without intense boom-bust and crash cycles, with a more s…

Rent doesn't get changed daily, only when a lease is up for renewal.

Rent control deters the creation of new housing. This reduce in supply raises the price, which is bad for the poor - exactly the people it is meant to help.

Re: California Approves Statewide Rent Control

#72

Post by cryptoz »

pitaj wrote: post #67
cryptoz wrote: post #61

Earlier quoted context omitted.

The market is not working when actors frequently intentionally cause trauma and unexpected financial and life emergencies to tenets. The 'market' is not some divine thing that cannot go wrong; rather, trying to make the 'market' work is exactly why we have runaway climate change and incredible wealth disparity that's causing unnecessary pain and upheaval in the US today. There's no need to swear at people, this is an…

The reason the market is not working is because of onerous regulation by the government in the first place.

Not all regulations are equal. Merely because some past law was bad does not mean all future laws will be bad. Saying that rent control is bad because past zoning (or other law) was bad doesn't make sense.

Re: California Approves Statewide Rent Control

#73

Post by joshAg »

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 entire point of the law is to prevent you from being able to make those larger adjustments, though.

How often do you replace tenants? And what's your occupancy rate? If you're in a situation where you can reliably raise rent 7% YoY indefinitely without decreasing your occupancy rate, then you were severely underpriced for the market (and you should probably fire that management company for pricing you that absurdly low). 7% YoY after inflation is a big increase that outstrips average wage increases.

If you aren't severely underpriced, then what's going to happen is that when you increase by 7%, the tenants will choose to end the lease because they can find something cheaper (or they emmigrate from the city because nothing is affordable), and you'll struggle to replace them with wealthier tenants willing to pay what you think is market price, so you'll have to lower rent to attract a tenant. Once you get to the point where your price is roughly in line with what the market will bear, you'll only be able to squeeze one or two years of rent increases out of a tenant before the non-monetary costs of moving are outweighed by the cheaper rent, so constantly trying for 7% YoY post inflation will just mean a decrease in your occupancy rate, both because you'll be replacing tenants more frequently and because finding new ones will take longer.

Re: California Approves Statewide Rent Control

#74

Post by sologoub »

gregs1986 wrote: post #68
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…

Landlords who choose to increase rents at the maximum rate permitted each year do so at the risk that they will be undercut by competing property owners who do not do so. Given this, I think that your property management company is offering you bad advice. Most landlords already increase rents at the maximum rate that the market will bear. Capping annual increases at 7% just ensures that in a year when the market wou…

That’s how large corporations behave, but what the OP is voicing is a common sentiment for smaller investors or people doing landlording as a side gig or housing hack to financial independence.

If the market can support it, these laws guarantee the maximum increase. If the market cannot, well you are already at the top of the market aren’t you? So no benefit here.

Re: California Approves Statewide Rent Control

#75

Post by cryptoz »

pitaj wrote: post #71
cryptoz wrote: post #45

Earlier quoted context omitted.

Can you explain what you mean? I don't follow. Rent control is a bandaid that provides a level of stability to the lower classes. They can live without daily anxiety of being rudely defacto 'evicted' by radical, surprise rent increases. This enables a society to continue to grow and function at a somewhat more sustainable pace, letting cities and counties grow without intense boom-bust and crash cycles, with a more s…

Rent doesn't get changed daily, only when a lease is up for renewal. Rent control deters the creation of new housing. This reduce in supply raises the price, which is bad for the poor - exactly the people it is meant to help.

I was under the impression that some rents can be increased during the lease. I do not think it is only a renewal event, by law.

> Rent control deters the creation of new housing.

I keep seeing this repeated but I don't understand. Why does rent control deter creation of new housing?

> This reduce in supply raises the price

But you've glossed over why supply is reduced. I don't see any reason that supply would be reduced with basic moderate rent control like this one.

Edit: I have tripped some wire (?) and am not allowed to post any more. In response to the comment below,

> https://www.google.com/url?sa=t&source=web&rct=j&url=https:/...

That seems to be Washington, not California. According to http://www.hrc-la.org/doc.asp?id=36 it seems to read that some leases allow rent increases mid-lease.

Re: California Approves Statewide Rent Control

#76

Post by WheelsAtLarge »

I agree that at this point rent control is a good option. Housing prices are going up so fast that rents need to go up too. The higher rents then give an incentive for house prices to go up. It becomes a cycle for both to increase. But rent control by itself is not enough. The other leg of the solution is to increase housing via governmental incentives. Otherwise, rent control will make the situation worse since there is no incentive to increase housing.

Re: California Approves Statewide Rent Control

#77

Post by neonate »

baby wrote: post #25
DevKoala wrote: post #22

Rent control is abused in SF. Every engineer I know, who has been living in SF for over 5 years is currently paying an absurd amount compared to their monthly income. I even sub-leased an apartment from a friend who took off a sabbatical, and he didn’t want to lose his rent control. I don’t know who rent-control is supposed to benefit, but it seems broken. Eventually these places end up in the hands of people who kno…

Abused? When I moved here I heard horror stories of rent increasing suddenly. I did what any sane person would do. I looked only for rent controlled places before moving in.

Certainly it gets abused. People keep their apartments even though they're not living in them, because otherwise the rent would go up. I know someone who did that for 20 years with an apartment on Russian Hill. She would sublet the place for a year or two and then come back.

Re: California Approves Statewide Rent Control

#78

Post by pg_is_a_butt »

joshAg wrote: post #73
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 entire point of the law is to prevent you from being able to make those larger adjustments, though. How often do you replace tenants? And what's your occupancy rate? If you're in a situation where you can reliably raise rent 7% YoY indefinitely without decreasing your occupancy rate, then you were severely underpriced for the market (and you should probably fire that management company for pricing you that absurd…

... in a vacuum in space
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