California Approves Statewide Rent Control • Hacker News Board

Re: California Approves Statewide Rent Control

#911

Post by irq11 » Thu, Sep 12, 2019, 5:08 PM UTC

refurb wrote: post #895

ryan_lane wrote: post #879

Earlier quoted context omitted.

A lot of what you're saying in here is blatantly incorrect or misleading. Water is frequently covered in utilities, but other utilities generally are not. Leases are very specific on the number of people in a unit for rent controlled apartments and is one the few things a tenant can be evicted for. The board frequently approves pass throughs. Increases tend to be higher than inflation. If you lease out your house and…

You need to do more research. The rent increase law is 60% of CPI. Look it up. SF introduced a new law a couple years ago that additional people can live in a unit even if they are not on the lease. They only instituted caps on how many. Google search it. Plenty of apartments have not only water, but also heating included in the rent. If that goes up drastically, the rent board will likely tell the landlord “tough”.…

You need to exaggerate less.

The maximum rent increase rate is 60% of the trailing twelve months CPI in the bay area. But landlords’ costs do not scale with the CPI. Mortgage rates are fixed (if a landlord has a mortgage at all), taxes are independent of CPI, and principal+interest+taxes are the vast majority of a landlord’s expenses. Maintenance is typically a small fraction of that number.

Landlords are not obligated to pay your heat or water under rent control. Mine certainly never did.

The roommate law changes you mention are not rent control, but tenant protections applicable to all rentals in SF. The 2015 change brought rent controlled units up to par, because landlords were evicting people for doing things like getting married or switching roommates (horrors!) Basically: preventing predatory landlords from being scumbags.

I’m going to go with the GP on this and say that if you think people should have their rent hiked for getting married or changing roommates or having a kid, you have poor morals.

In essence, you don’t like being told what you can do, you have a theory that it hurts the housing market, and you’re inventing reasons to justify your theory of reality.

Re: California Approves Statewide Rent Control

#912

Post by vproman » Thu, Sep 12, 2019, 5:09 PM UTC

closeparen wrote: post #256

joshAg wrote: post #176

Earlier quoted context omitted.

Nothing. The parent comment was arguing that because the law now says that rent couldn't increase by more than 7% they were now being advised to increase rent by that much every year (ostensibly because they are now planning to do this), and my response is that it's absurd to claim that anything in the law will change things so that you could make that sort of increase now if you couldn't already make that increase b…

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.

You can still revert to market rate if your tenant leaves. As a landlord who values consistent occupancy over maximizing profit, I am fine with this. And I agree with above comment, if you are raising rent 7% every year then you or your prop manager lowballed your rent, that’s not the fault of rent control.

Re: California Approves Statewide Rent Control

#913

Post by afpx » Thu, Sep 12, 2019, 5:10 PM UTC

thorwasdfasdf wrote: post #891

This is a disaster. Have we learned nothing at all? Rent control won't help anyone except those who already have a low rent place and it'll only help for the short term until they need to move. After 50 years of ridiculous regulations that prevent more housing from being added, we're still moving in the wrong direction. This is truely a sad day.

Wouldn’t it mostly discourage people from buying properties for the only purpose of renting them? I think the long-term effects will be interesting. Hopefully, a bunch of rental properties will hit the market.

Re: California Approves Statewide Rent Control

#914

Post by rconti » Thu, Sep 12, 2019, 5:11 PM UTC

namesbc wrote: post #663

cybersnowflake wrote: post #204

Earlier quoted context omitted.

Also 2. Realize that not everybody in the world needs to or should live in the Bay Area/Hollywood. 3. Don't pass statewide laws catering primarily to the group of people aspiring to do so.

Bay Area has more jobs than it does housing for the people who work those jobs. There just isn't an option for everyone to move away from the bay area and still have work. Take your "I've got mine so screw everyone else" attitude out of the bay area, we don't have room here for people with so little empathy for their neighbors.

It's a fair comment. You entirely brushed aside point 3 by using a personal criticism on the parent poster to ignore the fact that rent control is imposing a cost on an entire massive state, in order to regulate a thing that is an issue in a small number of counties.

Re: California Approves Statewide Rent Control

#915

Post by ng12 » Thu, Sep 12, 2019, 5:12 PM UTC

verbify wrote: post #780

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…

I used to think so too. Now I'm on the fence. High interest rates means people can borrow less, and has a dampening effect on house prices, low interest rates means people can borrow more, so house prices go up. Our current environment of low interest rates means that borrowing is cheap - which has pushed up prices, as now people can now afford larger mortgages. This has come at the same time as a withdrawal of mortg…

> low interest rates means people can borrow more, so house prices go up.

Sure, but they go up by the amount of money you saved on the mortgage, the net price is the same. The amount homebuyers can afford to pay doesn't change with interest rates.

Re: California Approves Statewide Rent Control

#916

Post by rjf72 » Thu, Sep 12, 2019, 5:33 PM UTC

hcknwscommenter wrote: post #774

rjf72 wrote: post #690

Earlier quoted context omitted.

To take the other side of the argument here I'm completely against this change but I'm happy that it passed. The reason is simple: without data we're all just speculating. If I'm correct, now I will have real bias-free (since we're looking at this exact location as opposed to other locations where rent control has had... issues) data to support my views. And of course only a fool would cling to certainty on issues th…

"Did minimum wage increases . . . cause some economic damage? Yes." Citation needed. My admittedly cursory review of the latest results suggest no damage at all.

There's a reasonable related article here [1]. It discusses two different studies on the effects of Seattle's minimum wage increases. The first is from Berkeley and based on limited data. It suggested there was mostly just a small reduction in employment with an overall positive effect. The other study was from the University of Washington and had access to detailed low level data on hours worked, salaries, etc. It found numerous very negative affects, many of which were worse than even minimum wage critics generally suggest might occur. This included an overall gross decline in overall wages due to declines in hours being worked - overall wages rose 3% while the number of hours worked declined 9%.

The reason I mention the Berkeley study at all is because this now led to arguments based on after-the-fact retrofitting. In particular increase supporters have now tried to argue that Seattle was in a unique boom phase and so the study was comparing against a local max, and thus there was actually no damage - but just Seattle 'regressing to the mean' if you will. But the Washington study also considered this possibility and contrasted it against other control cities within Washington that did not increase wages, and found that they did not experience the negative effects. And so on back and forth it goes.

And so who do you believe? Probably whoever you want to be right. This is why I'd suggest laying out metrics beforehand. If Seattle was in a unique boom phase before the minimum wage increases then this is something everybody could agree on beforehand. When you do after-the-fact analysis, you risk peoples biases getting in the way of things. And because of the complexity of systems such as these, it's always going to be pretty easy to prove X and also prove not X after the fact.

[1] - https://www.nytimes.com/2017/06/26/business/economy/seattle-...

Re: California Approves Statewide Rent Control

#917

Post by davinic » Thu, Sep 12, 2019, 5:33 PM UTC

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…

Prop 13 also plays a huge part in why vacant areas don't get developed.

Re: California Approves Statewide Rent Control

#918

Post by zepto » Thu, Sep 12, 2019, 5:54 PM UTC

fountainofage wrote: post #859

KibbutzDalia wrote: post #624

Earlier quoted context omitted.

You are pure evil.

My landlord's building is worth $5 million ($5,000k) and he pays $3k a year in property taxes. He can evict all tenants and wait for someone to pay him $10 million for the property. He can wait for generations and never pay more than $4k a year because of how prop 13 is structured. But you do you.

Sure but you also want to force anyone who has recently managed to buy a home and doesn’t have a huge extra income out of it and out of the area.

Your landlord may be able to evict one building’s worth of people, but your goal is to evict many more than that.

Your landlord is harmless by comparison.

Re: California Approves Statewide Rent Control

#919

Post by joshAg » Thu, Sep 12, 2019, 5:55 PM UTC

avar wrote: post #722

joshAg wrote: post #628

Earlier quoted context omitted.

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…

An increase by 7% followed by 4% is an increase of 11.28%, not 12%. $1000 +7% = $1070, $1070 +4% = $1112.80 $1000 +12 = $1120.

Fine.

Increase by 7% followed by an increase of 4.67289719626168224299065420561‬%.

The point is that the 12% hike every 3 to 5 years can be accomplished over the same time frame because the max the law allows for is 22.5043‬% in 3 years and 40.25517307‬% in 5 years.

Re: California Approves Statewide Rent Control

#920

Post by pontifier » Thu, Sep 12, 2019, 5:55 PM UTC

rconti wrote: post #907

scarlac wrote: post #903

Earlier quoted context omitted.

It's not ideal and no silver bullet, but having rents go up means "normal" people living in places for years get pushed out of the city and land lords get richer, faster. It seems to address that issue, which is not all bad on the surface. It's not the perfect solution, but what do you propose as something better that still helps normal people not get pushed out?

I don't have a perfect solution, either, but I see unintended consequence from this: * Fewer rentals on the market * More instances of landlords "re-occupying" a place (eg, ACTUALLY kicking out the residents) in order to fix it up (or not) and then re-rent to someone else at a much higher base rent, later. When rents go up, tenants push themselves out (or, the market pushes them out). When we devise tenant protection…

My uncle was given an eviction notice last month so the owner can fix the place up. Expect many more people to get similar notices before the new eviction protections kick in at the end of the year.