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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#801

Post by devtul »

dragonwriter wrote: post #785
34679 wrote: post #764

Earlier quoted context omitted.

The lack of affordable housing always has been and always will be a supply problem. When demand for homes outpaces the number of homes being built, prices go up. Plain and simple. Homes that are built for renting (mainly apartments and condos, but some houses, too) are built for profit. If you make it less profitable to build, fewer will be built. If fewer homes are built, the problem is compounded, not rectified. If…

> The lack of affordable housing always has been and always will be a supply problem. Yes, but in the expensive parts of California the limiting supply factor isn't how much people want to build but how much they are allowed to build because of zoning and other constraints, so there is a fairly large range where reducing the incentive to build will have no effect on actual results. But, anyway, does this really reduc…

Doesn't zoning fall under the same category as high permit prices when it comes to roadblocks for new units? Even when you say

> It seems to me rent control and eviction restrictions of this type increases the expected profits for new construction

Zoning and high fees will still be a problem, new units can be rented/sold at a premium but then we have the issue of it being affordable in rent or credit. My guess is that the new rule protects(temporarily) whoever is already in the game, any new comer will still get screwed.

Re: California Approves Statewide Rent Control

#802

Post by xvector »

Romanulus wrote: post #465
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.

That seems like a really clumsy way of pretending to be in a free market.

Few markets are really free, and that’s a good thing. Free markets tend to be very ugly in reality.

Re: California Approves Statewide Rent Control

#803

Post by ApolloFortyNine »

Won't this slow down gentrification of a neighborhood? There's neighborhoods in most cities that 10 years ago were 'the bad neighborhood' that have become walkable and popular again.

It's hardly unfeasible for the bid area to have a rent of <$500, but after gentrification could easily pull $1500. At a 5% cap a year, it would take considerably longer to reach this price, which will likely slowly down the conversion of these areas, as the demographics would change much more slowly.

Re: California Approves Statewide Rent Control

#804

Post by cat199 »

34679 wrote: post #764
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…

The lack of affordable housing always has been and always will be a supply problem. When demand for homes outpaces the number of homes being built, prices go up. Plain and simple. Homes that are built for renting (mainly apartments and condos, but some houses, too) are built for profit. If you make it less profitable to build, fewer will be built. If fewer homes are built, the problem is compounded, not rectified. If…

> If you make it less profitable to build, fewer will be built.

.. and fewer will be speculated on, driving up the underlying price, which is then translated into rent.

this is my problem with simple smithian models of real estate - they ignore the wider capital market impacts.

not a fan of rent control, but also not a fan of fund fueled real estate bubbles, and both influence the cost of rent.

Re: California Approves Statewide Rent Control

#805

Post by sct202 »

eru wrote: post #741
pmikesell wrote: post #188

Earlier quoted context omitted.

That would remove rental units from the market and further increase cost of living for folks who can’t purchase. What would be the positive effects?

It also takes a tenant out of the market. So the net effect on other renters is pretty slim.

In Chicago, a lot of multi-units (2+ flats) are converted to single large SFH, so the net effect could be worse especially if prices were to go down that it would be attainable to do that.

Re: California Approves Statewide Rent Control

#806

Post by xvector »

seph-reed wrote: post #296
mabbo wrote: post #286

Earlier quoted context omitted.

Not enough to fix the housing problems CA has. Not nearly. And if that's the problem, tax empty homes. But even then, even if there are empty homes, building more will still fix the problem. Let those foolish owners leave the homes empty- we can build more anyways.

I really dislike the notion of clearing more land and putting up more cookie cutter houses and apartments for the sake of saturating the housing market in order to get people to rent for reasonable prices.

I really dislike the fact that I’d have to save for decades just to afford a decent house in California.

The land isn’t doing anything just sitting there. I am totally fine with clearing it out so people can actually afford houses.

Re: California Approves Statewide Rent Control

#807

Post by mcv »

eru wrote: post #730
mcv wrote: post #709

Earlier quoted context omitted.

True, but if someone is already using it, it's shitty to increase the price that much. It makes it a bait-and-switch: offer for a reasonable price first, and once the family is all settled, jump a massive price increase on them. That's absolutely something that needs to be banned by law.

It's bad behaviour all right, but that doesn't automatically mean a law is the best fix. Tenants could ask for contract terms that forbid such raises. Or, if landlords are not forthcoming, they could take out insurance. And yes, such insurance would need to have its terms written carefully. And it probably doesn't exist as a product at the moment. But eg sponsoring the development of such insurance would be an easier…

I'm not sure what insurance is going to accomplish here. Tenants could negotiate it in the contract, but most people are not lawyers who will understand and negotiate the finer details on a contract.

The law is not automatically the best fix for all kinds of bad behaviour, and in many cases it clearly isn't, but I think this is one of those cases where it really is. Dramatically raising rent prices on someone who is already living there, is taking of a situation where the other party cannot simply refuse the offer, because moving every year gets really expensive quick. With many other kind of subscriptions, if the vendor suddenly doubles the price, they're easy to cancel. But not when it's the place where you live. It's taking advantage of a kind of vendor lock-in. A kind of monopolistic abuse.

And it's exactly the kind of thing that many countries do try to protect tenants from.

And no, the problem here is not pent up demand for building. That would be a likely cause when it's the initial rent for a new tenant that's too high. That's a sign there are simply not enough houses and too many potential tenants. But when the initial price is low, the landlord clearly does want to rent it to you. And when they then dramatically raise the rent, they're taking advantage of the power they have over your living situation. Preventing that by law is entirely reasonable.

Re: California Approves Statewide Rent Control

#808

Post by kube-system »

baby wrote: post #118
pitaj wrote: post #50

Earlier quoted context omitted.

Prices should increase in the case of increased demand. Prices must increase in that case if you want the supply to increase, which is the only way to actually meet demand. It's how the market works ffs.

I guess it shows how out of touch you guys are. When I moved here EVERYONE told me to find a rent controlled place. After hearing some horror stories I think you would be crazy to live in a non-rent controlled place. Heck, I’ve never heard of non-rent control before moving to the US. No surprise there’s so many homeless people. PS: look at what your free market did to the US healthcare.

Rent controlled places are great for the person living there. But, they’re bad for the supply of housing, which compounds the need for rent controls in the first place.

I live in a city where there are more residential properties than families. Prices are a tiny fraction of what y’all on the coasts cite. Apartments under $1000/month in trendy neighborhoods is common here. I’ve rented small apartments here for $500/month.

Rent controls may slow price increases, but encouraging supply decreases price. You can’t fix the problem until you treat the root cause rather than the symptom.

Re: California Approves Statewide Rent Control

#809

Post by noxToken »

folkrav wrote: post #772
34679 wrote: post #764

Earlier quoted context omitted.

The lack of affordable housing always has been and always will be a supply problem. When demand for homes outpaces the number of homes being built, prices go up. Plain and simple. Homes that are built for renting (mainly apartments and condos, but some houses, too) are built for profit. If you make it less profitable to build, fewer will be built. If fewer homes are built, the problem is compounded, not rectified. If…

Not American, so my knowledge on the matter is limited. Is it that expensive even outside SF and LA areas? Also, AFAIK, these two areas (and surroundings) are very, very stressed in terms of traffic, and more housing means more people, and more cars. Can those cities deal with more traffic?

Very expensive. When you leave a lot of major metro areas, housing costs way less. There are 3+ BR homes on ½ acre of land (approx half an American football field or half a soccer pitch) in the South roughly 15 minutes from downtown areas for $125k - $175k USD. The cost of living in areas like SF and NYC are very high compared to the rest of the country. Housing is a major part of that cost of living hike.

Re: California Approves Statewide Rent Control

#810

Post by FussyZeus »

eloff wrote: post #789
FussyZeus wrote: post #779

Earlier quoted context omitted.

> Homes that are built for renting (mainly apartments and condos, but some houses, too) are built for profit. If you make it less profitable to build, fewer will be built. If fewer homes are built, the problem is compounded, not rectified. Arguments like this continue to be made for more and more aspects of our market: pharmaceuticals, heathcare services, elder care services, and now housing. Everywhere you look the…

Markets are hardly perfect, but in this specific case it should be the most efficient solution to the problem - if you could fix the zoning and other laws that distort it so badly that it's dysfunctional. And your still going to want to add incentives for things you value but the market does not - perhaps like lower income housing. In some of the other cases you mentioned markets are not necessarily the best solution…

What are the zoning laws you see as the problem? Serious question, I'm not in that area and don't know much about SF's zoning issues.
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