California Approves Statewide Rent Control • Hacker News Board

Re: California Approves Statewide Rent Control

#821

Post by jeffdavis » Thu, Sep 12, 2019, 2:26 PM UTC

eagsalazar2 wrote: post #561

jeffdavis wrote: post #452

Earlier quoted context omitted.

> Turnabout is fair play. The biggest myth is that this kind of stuff actually helps the less-powerful. In reality, it just means they are hurt twice: government artificially suppressing supply, and government manipulating prices which has bad side effects for mamy even if its good for a few. Also, in reality, the powerful often don't get hurt, and arbitrary market manipulations just introduce new ways for them to ge…

Give me a break. Until suppression of building new units stops (by poor, helpless owners), this is the only recourse. I agree wholeheartedly that the real solution is to build more homes but that doesn't appear to be in the cards. So the idea that rent control doesn't actually help lower income people is _completely_ nuts. I know of many people off the top of my head that no-way would still be living in San Francisco…

> I know of many people...

Visible benefits; invisible costs. Great politics.

Who you don't see are the people outside looking in that want an apartment but can't find one, or can't afford one, or need to sign a new lease at a very high rent.

Rent control doesn't unequivocally help current renters. It also keeps them stuck in one place for a long time, even when it's not a great fit for them.

And pretty much every economist says rent control raises rents and lowers quality overall, hurting those trying to move in.

Re: California Approves Statewide Rent Control

#822

Post by rongenre » Thu, Sep 12, 2019, 2:26 PM UTC

xxxpupugo wrote: post #685

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…

Well said. It is weird to see so many people jumping out to lay the accusations of 'uninformed!', 'never works', etc... In fact, the CA, especially in bay area, the rent is already top among this country. 7% on top of that is still a quite sizable increase. And it is hilarious to see those (aspiring) landlords playing the blame-the-game-not-the-player rhetoric here to blame the government not allowing more houses to…

"blame-the-game-not-the-player" is so typical of polite SF (and greater CA). A lot of homeowners are quietly rubbing their hands knowing their houses suddenly got more valuable.

My experience with SF rent control is that it's really only valuable if you've got limited resources. I lived there for 5 years, saw market rent double, and my landlady politely asked me to pay a "generous discount from market", which was about a 50% increase and I declined - it would have busted my budget.

Then eviction proceedings started: completely made up, and I lawyered up. I was threatened with OMI (there's no defense if they actually do move in), and I negotiated a settlement. Because if I'd won I'd have a super hostile situation ending in OMI, and if I'd lost I'd have killed a substantial portion of my savings.

If I'd had nothing to lose, I'd have hung on for dear life.

Re: California Approves Statewide Rent Control

#823

Post by tathougies » Thu, Sep 12, 2019, 2:27 PM UTC

john_moscow wrote: post #169

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…

>they are now advising a default annual increase of the maximum allowed (7 percent before inflation) Is the property management company collecting an extra commission each time a new tenant moves in? Because all this strategy is going to do is let tenants quit once the rent goes considerably above the market rate. A much wiser strategy, IMO, would be to watch the market rates and keep the existing tenants' rate const…

The entire market is going to do this. Legalizing a 7 percent increase basically means mandating the entire market move at this rate.

Re: California Approves Statewide Rent Control

#824

Post by azernik » Thu, Sep 12, 2019, 2:28 PM UTC

macspoofing wrote: post #705

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…

It is still rent control. The problems you see will not be fixed by the law. >I think one could sanely argue that allowing increases of up to 5% plus inflation is a suitable restrictio Based on what data? And no, it's not a 'sane' argument: 1) if 5% + inflation is above market rates then this rent control is either a no-op or detrimental because it may incentivize landlords to hike rent to maximum because they won't…

> 1) if 5% + inflation is above market rates then this rent control is either a no-op or detrimental because it may incentivize landlords to hike rent to maximum because they won't have have the flexibility to do that in the future if the market changes.

It incentivizes landlords to even out their rent increases over time, and to avoid sudden jumps. Especially for lower-income people, price shocks are devastating; having warning of an expected rise in prices, so that you can move or downsize with a year or two of notice, is a boon, and this kind of measure forces landlords to do that work.

Re: California Approves Statewide Rent Control

#825

Post by Jweb_Guru » Thu, Sep 12, 2019, 2:30 PM UTC

eru wrote: post #739

Jweb_Guru wrote: post #694

Earlier quoted context omitted.

Yes, the real solution is to make life as easy as possible for real estate developers and strip tenants of their rights. That is definitely good for tenants, according to landlords such as yourself. For the rest of us, I hope you understand why this sounds fairly nonsensical. "More housing" does not automatically translate to "affordable housing" and many regulations are there for a reason--including regulations prot…

How does more housing not translate to more affordable housing? Do rich people to afford that extra housing get created out of thin air?

The government is perfectly capable of paying for housing if it is so inclined. It is also capable of providing incentives for creating new housing in certain markets, such as discounts; the idea that this can only be incentivized by charging new and existing tenants insanely high rents is the problem. Perhaps it could get some of the money required to do this by extracting it from the tremendous number of wealthy people living in SF, many of whom are probably browsing HN right now. It would likely be easier to do that if their rents weren't so astronomical, of course...

As for "does not translate to affordable housing"--right now landlords and property developers have two ways of extracting money from the system: charge high rents, or pass the property on to other landlords. Maximizing profit on either of these requires rents to keep going up, and for the second there's no particular reason to actually have tenants. Beyond that, "market rate" in SF right now is nowhere close to affordable for most people and will not be for the foreseeable future, even if building greatly increases, which means that the people currently protected by rent control--those who can't afford "market rate", like the vast majority of people in the U.S.--aren't helped one bit by the creation of new housing.

Re: California Approves Statewide Rent Control

#826

Post by rdtwo » Thu, Sep 12, 2019, 2:30 PM UTC

Retric wrote: post #752

bko wrote: post #746

Earlier quoted context omitted.

> Landlords already charge as much as the market can bear. Coordination isn't really necessary. This statement doesn't mean anything. Consider a game where you try to maximize revenue. You play along with other players with the same goal. If you set your rent too high, other players undercut you. You set the price too low, you leave money on the table. Now consider a rule that says you can at most raise the prices x%…

With rent if the increase is above what the market accepts, units will stay empty. That limits price increases to what the market will accept.

The cost of moving is always a factor, rent will be at market the first year then above market thereafter until it rises to the point that the cost of moving is worthwhile.

Re: California Approves Statewide Rent Control

#827

Post by bgorman » Thu, Sep 12, 2019, 2:30 PM UTC

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.

The US healthcare system is not a free market. In many parts of the country building a new hospital requires government permission. Pharmaceutical drug companies are allowed to set prices at higher prices here than the rest of the world and block imports. Most customers get their healthcare from their employers (due to tax law), so they do not shop around for the best price. Doctors are heavily regulated and it is very difficult for qualified foreign doctors to immigrate to the US.

Re: California Approves Statewide Rent Control

#828

Post by briandear » Thu, Sep 12, 2019, 2:31 PM UTC

mratzloff wrote: post #669

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…

Was the tenant happy when you increased it? Increasing rent 12% in one go effectively kicks out most tenants. A smaller annual increase will give them time to adjust to market conditions and choose over a longer period whether or not to move and to save up to do so. You are doing no one any favors except short-term renters who never get an increase. In other words, your so-called benefit is actually a detriment to lo…

Could the tenant not save the amount of money the rent was not going up to be prepared for the day when rent did go up? The tenant could have saved 5%’s worth of increase, invested it in an index fund for the day that the rent eventually did rise. A 12% rise after 3-5 years would be no big deal since the tenant would have been prepared.

Re: California Approves Statewide Rent Control

#829

Post by andrewla » Thu, Sep 12, 2019, 2:31 PM 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…

For those like me who do not subscribe to the nytimes, the text of the bill is here: https://leginfo.legislature.ca.gov/faces/billCompareClient.x...

Re: California Approves Statewide Rent Control

#830

Post by Jweb_Guru » Thu, Sep 12, 2019, 2:31 PM UTC

icebraining wrote: post #708

Jweb_Guru wrote: post #693

Earlier quoted context omitted.

Rents are growing insanely fast in SF compare to anything else. The idea that landlords can't afford to make repairs because they aren't extracting maximum rent from the property is completely ludicrous on the face of it. Do you actually believe these arguments?

Are you talking about all rents, or controlled ones? The post above wrote that rent control rules in SF limit increases to "60% of CPI, so it can’t even match inflation". If that's false, then my post doesn't apply, sure.

Rent is far above its CPI-inflated average right now, so saying that rent increases must match inflation makes no sense. The time to do that would've been long ago. But in any case I'm pretty sure rent increases are capped at much higher than inflation.