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California Approves Statewide Rent Control

nytimes.com

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Re: California Approves Statewide Rent Control

#941

Post by cybersnowflake »

eru wrote: post #743
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 is one of the most productive parts of the USA. (And one of the most productive places on earth.) Excluding people from work in productive areas perpetuates poverty.

Why do people NEED to work in san francisco/LA? You may think you're contributing something valuable being a barista or adjunct ethnic studies professor in the Bay Area but if you can't survive there maybe the others don't agree. Move to a house bigger than a shoebox with less traffic, less filth, and less crazy politicians, and lower costs. Whats the hangup? I don't understand these people who watched pirates of silicon valley and now they have to live in a shack on location.

Re: California Approves Statewide Rent Control

#942

Post by macspoofing »

falsedan wrote: post #853
macspoofing wrote: post #707

Earlier quoted context omitted.

No. They let population growth take care of that while they decide not to invest in rental properties. Your flippant argument can be flipped around too. If there is a housing shortage, by what mechanism does rent control conjure new housing units?

who the what now my point is, vanishing landlord or no, the units remain

>my point is, vanishing landlord or no, the units remain

Still wrong:

1) Apartments get converted to condos, or re-purposed because the property has value, but renting doesn't.

2) The population keeps growing meaning that your same number of units don't meet the needs.

3) Rental supply also drops as people opt not to move and sit on their rent-controlled apartments, limiting the supply for those looking.

This is why rent-control has the effect of making housing worse, even if the rental supply is maintained.

Re: California Approves Statewide Rent Control

#943

Post by seph-reed »

xvector wrote: post #937
seph-reed wrote: post #890

Earlier quoted context omitted.

Coming from CA and living elsewhere now, it honestly hurts me how much people take that land for granted. It's so damn gorgeous and rare.

It is definitely stunning, and it can make a painful commute bearable, but I would put the needs of my fellow humans over aesthetic. That said, there is still a ton of "boring" land we can build on first before cannibalizing the scenic drives.

> my fellow humans

This may be the pivotal pinch point which marks the root of our disagreement. I honestly feel more fellowship with animals and computers than humans.

Also, when it comes to the "needs" of humanity, I think we've surpassed that mark. It's beginning to appear that people are insatiable consumers that will destroy anything for a bit of convenience, all while being unhappy the entire time.

I'm not on team human.

Re: California Approves Statewide Rent Control

#944

Post by Renevith »

negrit wrote: post #683
Renevith wrote: post #573

Earlier quoted context omitted.

If there weren't rent control, market rents would certainly be much lower, so it's really hard to say whether your aunt and uncle could afford it or not. Surely you weren't basing your statement on the current market rent in their neighborhood? On what basis are you making that claim?

> If there weren't rent control, market rents would certainly be much lower source?

Here's the latest: "... while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law." https://web.stanford.edu/~diamondr/DMQ.pdf

Previously: "Rent control policies generally lead to higher rents in the uncontrolled market, with rents some-times substantially higher than would be expected without rent control (i.e., between 10 to 25 percent higher). Over time, if rent control does not apply to new construction, there is some evidence that the impact on uncontrolled rents diminishes." https://www.nmhc.org/globalassets/knowledge-library/rent-con...

It also follows from supply and demand. Owners are more likely to sell rather than rent out their places, and tenants are more likely to stay in their below-market rent units, both of which reduces supply for new (i.e. market-rate) tenants.

Re: California Approves Statewide Rent Control

#945

Post by justinhj »

refurb wrote: post #314
justinhj wrote: post #194

Earlier quoted context omitted.

Which is why vacant property tax makes sense for popular areas

So solve a problem created by regulations with more regulations?

I'm not sure I'm in favour of rent control in the first place, but as a Vancouver renter I have seen vacancy tax really help with both house prices and rental availability. It also seems to be a fair tax, you are being taxed on a luxury that affects other people negatively.

Re: California Approves Statewide Rent Control

#946

Post by cookiecaper »

joshAg wrote: post #919
avar wrote: post #722

Earlier quoted context omitted.

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.

But the reality is that landlords aren't going to want to take the risk that they'll have to spend extra time at a below-market rate, and since there's no way to predict what the market is going to do, there's no guarantee that they'll only be missing 4% of that value for only one year. Landlords are thus incentivized to increase rent by the legal maximum each year to keep the risk minimized.

Your hypothetical also assumes that in the next year, the market value will stay the same, when in reality the expectation would be that it would increase another percentage point or two, meaning they'd have to come close to maxing that second year's increase to fully recapture the value.

It also creates an effect where now that there's a legal range, the landlord will still feel like a nice guy by increasing rent "only" 4% each year, for example, and that's worse for tenants overall. It strongly incentivizes small-time landlords to imitate commercial landlords and squeeze the tenant for more each year, which other posters have adequately demonstrated is a significant loss to the tenant over a simple periodic adjustment every 3-5 years.

These policies may be better justified in high-density areas like San Francisco (probably still net negative), but applying them state-wide is crazy. California is a very large state and they just made things substantially more complicated for both tenants and landlords throughout.

Re: California Approves Statewide Rent Control

#947

Post by zepto »

fountainofage wrote: post #935
zepto wrote: post #918

Earlier quoted context omitted.

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.

Who said eviction? I said to charge to the property tax as it's valued today. Put a lien on the property and collect at time of transfer. There's no reason to evict people based on property taxes. Texas handles this just fine.

What happens when the tax liens outweigh the value of the property?

Re: California Approves Statewide Rent Control

#948

Post by CryptoPunk »

jblwps wrote: post #925
CryptoPunk wrote: post #570

Earlier quoted context omitted.

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/…

Yes you should definitely judge the content on its own merit and not blindly trust the source. The article is well sourced and even cites "left-wing" economists (yes they exist) and political figures.

Re: California Approves Statewide Rent Control

#949

Post by CryptoPunk »

throwaway5752 wrote: post #202
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…

This should be the top comment. The upshot is that if you are a family that is renting, you won't be forced out of your home on short notice. Try - for a moment - to imagine you are living close to your maximum expenses and your landlord increases your rent by 20% next year.

As counter-intuitive as it seems, this should happen. People should not look at rental property with no rent stabilization provision as a stable housing arrangement. If there is a sudden shortage in housing, we need prices to suddenly reflect that shortage, in order for people to be suddenly incentivised to and compensated for building housing to fill that shortage.

Shortage is pain and rent control simply distributes that pain in a different way than the market would and does so in a way that reduces the ability of the market to gradually alleviate that pain.

The more the government intervenes in rental contracts to mandate that they be like a lifetime lease agreement, the less incentives and sustenance there is to build a rental property overall. Society is better off having more rental units that have prices that are not legislatively stabilized than have a smaller supply of rental units with mandatorily stabilize prices.

If someone wants stabilized rental prices and they should sign a lease agreement with the landlord that gives them that at the price of a slightly higher per month rental rate. These kinds of things should arranged by actors in the market rather than having the government ban all alternatives in order to force people into stabalized rent contracts.

Re: California Approves Statewide Rent Control

#950

Post by tathougies »

Jweb_Guru wrote: post #927
tathougies wrote: post #856

Earlier quoted context omitted.

Perhaps... I don't know. Thats why I asked.

No. They haven't.

According to https://www.sfchronicle.com/business/article/San-Francisco-p..., construction costs in SF rose 5% last year (2018). Also according to the SF chronicle (https://www.sfchronicle.com/business/networth/article/After-...), rents increased 3.7% year over year.

According to https://www.curbed.com/2018/12/17/18144657/construction-home..., San Francisco's high construction cost is mainly driven by the high cost of construction labor. It is disproportionately driven by labor cost when compared to all other cities.

So we have some data now, rather than just pithy statements, and I don't think it agrees with what you want.

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