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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#921

Post by nicwolff »

busterarm wrote: post #745
heyoni wrote: post #655

Earlier quoted context omitted.

I think rent stabilized apartments can go a lot higher than $2700. Lots of luxury buildings are taking tax abatements in exchange for rent stabilization and setting aside a number of rent controlled units.

Nope. Units deregulate at $2700. Also there's no such thing as new rent controlled or rent stabilized units since 1970. There's other housing programs like Mitchell-Lama, some that are like what you mentioned, but that's a completely separate thing and a small amount of units. "Rent controlled" and "Rent stabilized" are technical terms in NY.

NY State repealed high-rent deregulation in the Housing Stability and Tenant Protection act of 2019. https://www.nysenate.gov/legislation/bills/2019/s6458

Re: California Approves Statewide Rent Control

#922

Post by joshAg »

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?

They outbid everyone else on every available unit.

They use their money to build new units in that area or entice someone to build new units on their behalf on which they will then outbid everyone else.

Re: California Approves Statewide Rent Control

#923

Post by refurb »

irq11 wrote: post #911
refurb wrote: post #895

Earlier quoted context omitted.

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 obligat…

Exaggerate? I said it was 60% of CPI and it is. Yes, the mortgage is likely fixed, but expenses such as maintenance and other associated costs are not - renovation cost have gone through the roof the last 10 years. Maintenance is generally 1% of the value of the building, so in SF that can be tens of thousands per year.

No, landlords are not obligated to pay heat or water (I never said that!), but many buildings (all the ones I lived in) do not have separate meters for water and sometimes heating, the landlord just pays the bill. Rent to a single person and they have two other people move in and use 200% more water? Tough shit says the rent board!

And the other problem with allowing additional people to live there is that if those additional people can demonstrate that they were an "established tenant", then they get full rent control and tenancy even after the original tenant (only name on the lease!) leaves. Show the rent board the lease they signed? Tough shit says the rent board.

It sounds like you aren't that familiar with the tenant laws in SF, so I'm not surprised you don't think it's a problem. Suffice to say being a landlord in SF is not a very attractive proposition, so it shouldn't surprise anyone that we have a housing shortage.

Re: California Approves Statewide Rent Control

#924

Post by jcranberry »

busterarm wrote: post #745
heyoni wrote: post #655

Earlier quoted context omitted.

I think rent stabilized apartments can go a lot higher than $2700. Lots of luxury buildings are taking tax abatements in exchange for rent stabilization and setting aside a number of rent controlled units.

Nope. Units deregulate at $2700. Also there's no such thing as new rent controlled or rent stabilized units since 1970. There's other housing programs like Mitchell-Lama, some that are like what you mentioned, but that's a completely separate thing and a small amount of units. "Rent controlled" and "Rent stabilized" are technical terms in NY.

I live in a rent stabilized apartment in NYC and my rent is 3400.

Re: California Approves Statewide Rent Control

#925

Post by jblwps »

CryptoPunk wrote: post #570
tachyonbeam wrote: post #536

Earlier quoted context omitted.

In Montreal we've had universal rent control all my life, and it actually works quite well. The rents are comparatively low. We have a decent tech scene, but it's still an affordable, left-leaning city, where even struggling artists can scrape by if they want to dedicate themselves to artistic work. I'm sure some people would argue that apartments in Montreal are less well-maintained as a result of universal rent con…

Montreal has a large supply of old housing stock. Its population growth has also been much slower than Vancouver and Toronto's over the last few decades: https://www.theglobeandmail.com/news/national/how-does-montr... >>Montreal is not shrinking, but it is growing slower than other big Canadian cities – driving down rental demand in the process. From 2013 to 2014, despite gaining nearly 43,000 immigrants from other p…

A note: EconLib appears to be run by the Liberty Fund, which is a group that certainly has a slant of its own[0]: an essentially anti-regulation stance in the name of personal liberty. I have attended a colloqium put on by a Liberty Fund-sponsored think-tank, and can attest to that slant.

I'm not saying the contents of the article is wrong, but just be aware of its source/publisher.

[0] https://en.wikipedia.org/wiki/Liberty_Fund#Criticism

Re: California Approves Statewide Rent Control

#926

Post by 40acres »

I genuinely don't understand folks reaction to Rent Control bills like this or the one recently passed in New York.

Don't you think that policymakers KNOW that the best way out of a housing crisis is to build your way out? California has put out bills in recent years to try to remedy this (ie. the bill that would require housing near transit lines) that FAILED, breaking down all the local neighborhood associations and powerful interests is not something that can be done in a single legislative cycle.

Rent control is about making it easier for everyday folks to survive day to day, its not meant to be a permanent solution, and if in 20 years this bill is still needed it won't be for lack of effort, it will because the NIMBYs were able to win out.

Re: California Approves Statewide Rent Control

#928

Post by dang »

Jweb_Guru wrote: post #693
icebraining wrote: post #657

Earlier quoted context omitted.

Because landlords start being unable to afford repairs, and you get a bunch of decrepit buildings falling apart all over the city (with all the dangers that implies, not just to occupants, but to nearby buildings as well). It happened in my home town, and it wasn't pretty. Landlords are not social security. It's probably better for the city to forcefully buy them out and create a new management model of the buildings…

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?

That crosses into personal attack. Please don't do that on HN.

https://news.ycombinator.com/newsguidelines.html

Re: California Approves Statewide Rent Control

#929

Post by [deleted] »

dcolkitt wrote: post #542
camjohnson26 wrote: post #512

Earlier quoted context omitted.

I genuinely can’t tell if this is sarcasm or not because there are definitely people with this level of economic illiteracy.

In zoning-restricted markets like the Bay Area, housing supply is extremely price inelastic. The coefficient is at least 2.0 if not higher. If cheap, abundant, shipping containers pull 25% of the demand out of the low-end multi-family segment, that's a 50% drop in prices. Low-end housing is a substitute good with mid-end housing for at least some of the demand. The prime example are people who live with roommates in…

[deleted]

Re: California Approves Statewide Rent Control

#930

Post by paulddraper »

jacobolus wrote: post #345
closeparen wrote: post #256

Earlier quoted context omitted.

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.

So in other words, landlords love to reserve the right to kick a tenant they stop liking out at the drop of a hat for no specific reason, by jacking the rent up as high as they want. As compensation for this power, they are willing to charge well below market rates to help indigent tenants. If they lose this “right”, they insist on becoming pure profit maximizing machines?

Landlords love to reserve the right to increase their prices.

Maybe inflation gets crazy, maybe taxes increase, maybe maintenance turns out to be more expensive, maybe they realize they've been underpricing, maybe they sell the property to someone who has the same reasons.

If you tell them that you will limit their freedom to choose the rent price, they will try to retain as much freedom as they can.

It's like a use-it-or-you-lose-it budget game.

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