961–970 of 1001 posts
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Rent control = less profit for building properties = less supply.
Lets be clear, the reason there is less supply is not rent control. It's regulations and NYMBYs that prevents any new building with higher occupancy.
Rent control reduces development revenue.
They both play a part in making building development less attractive, just from different sides.
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> Was the tenant happy when you increased it? Increasing rent 12% in one go effectively kicks out most tenants. No, the market kicked out most tenants. The tenant should be expected to also monitor market prices for their rental and know automatically when they're getting a deal or when to expect an increase.
If I own a house or an apartment complex, my costs are relatively fixed -- that is, after all, the primary argument for owning rather than renting -- which means that if I am leasing that house or units in that complex to someone else, there is nothing requiring me to raise rents to keep up with "the market" rather than merely keeping up with my own actual costs. I can choose to make the same absolute amount of net i…
Two viewpoints, one tree.
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This is really bad policy... Treating the symptom while making the root problem worse. The core issue is there is not enough good housing for everyone in California. The real solution is to greatly loosen building regulation and make getting permits much faster and easier statewide. Then entrepreneurs will double or triple the housing supply and drop the costs of renting or buying a home by 80%. You could see rents g…
I would argue the core issue is actually overpopulation (or in the case of California too many people wanting to live there but also trying to balance preservation of Nature). And it's certainly much more acute in California. Tokyo is not a desirable way to live, but neither are the suburbs. Too many people means the density gets too high, and poor zoning regulation and poor building incentives get us mcmansions. Eve…
California is in no danger of being overpopulated... The issue is as you say - single family homes are a brain dead way to live. Every homeowner has to spend hours a day maintaining his house... We stopped running our own internet servers after the first ten years of the web. Why can't we do the same with housing? Convert everything to medium (4 story buildings) or high (10+ story) density housing. You would completely get rid of suburban sprawl and everyone rich and poor could live within a mile of the ocean or mountains, walk or ride a five minute train to work, and solve climate change at the same time.
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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?
I know a few landlords and that’s exactly what’s happening. I’m not sure why you find it hard to believe. When you have a 3 unit building and everyone is paying less than 1/3 the market rate, it’s not worthwhile in the least for a landlord to fix up the building beyond the absolute minimum. Contractor rates have skyrocketed in SF, so even just repainting the building might cost $15k, which might represent several yea…
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…
The entire point of the law is to prevent you from being able to make those larger adjustments, though. How often do you replace tenants? And what's your occupancy rate? If you're in a situation where you can reliably raise rent 7% YoY indefinitely without decreasing your occupancy rate, then you were severely underpriced for the market (and you should probably fire that management company for pricing you that absurd…
- He may be socially responsible and not want to charge through the roof. E.g. likes the tenants, prefers stability etc.
- The whole point of the law is indeed to prevent large raises. But what if expenses suddenly skyrocket, or inflation does, and he has to increase more or go bankrupt? That’s the worry here. No, the law won’t react quickly enough. It’s preventing him from being socially responsible.
- You assume annual 7% would not work eventually because it will raise the price too much in the market. This assumes free market, but you don’t have it anymore, now you’re regulated. In particular, your missing that everybody else will adopt the same rational self-preserving policy. Approximately the entire market is going to grow 7% YoY now.
- nitpicking: 7% before, not after
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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?
But ignoring that absurdity - property taxes are usually 2% of the property value. So you'd need to what... Not pay any property tax at all for 100+ years for that scenario to play out?
But let's say we allowed that to happen, and we're somehow sympathetic to that owner. You still don't evict anyone over property taxes. The next buyer will just have to work it out. See Detroit and its $1 homes with $20k in back taxes.
I guess the problem here is I don't see housing as something anyone should expect a guaranteed profit from. I view it just like anything else - there's real risk, and if you're going to privatize the profit, you damn sure better privatize the risk, too.
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Rent control has never been good anywhere. Yet places keep trying it expecting something different. Supply and demand is one of the simplest concepts in economics and yet rent control does nothing to increase supply. In fact, it decreases supply by not shifting prices higher to induce more production.
> Supply and demand is one of the simplest concepts in economics That's what makes it one of the weakest. The housing market does not follow a standard supply-demand curve for a number of reasons. > Rent control has never been good anywhere. Citation needed. Rent control has helped a lot of people find stability in a time of need, enabling less trauma, stress and improving chances of class mobility. > In fact, it dec…
That would make it the first in history. Extraordinary claims require extraordinary evidence.
>Rent control has helped a lot of people find stability in a time of need
So has the lottery. Doesn’t mean it’s not bad overall. The massive portion of people that don’t hit the rent control lottery (I.e. anyone who has to move) get screwed and the whole middle and upper class gets screwed by a poorly incentivized supply.
>Is this a real effect that you can measure in the real world?
Yes. Look at any place where there is rent control and you will find it still has unaffordable prices often far above the national average. It has never been a net good for society. It doesn’t increase housing supply and the pigeon hole principle should be simple enough for you to understand what that means.
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…
Earlier quoted context omitted.
Well, what you do is get rid of prop 13 and do yearly appraisals. Then you just tax the property on what it's worth, and if a landlord refuses to rent, then the tax is now a vacancy tax. The real problem is we're not taxing these properties at the true value they could provide to society, so a massive market inefficiency exists.
A vacancy tax is indeed a bit more complicated. You hint at the easier solution: repeal prop 14 and increase property taxes. A lot. Problem solved. (If you want to be a bit more sophisticated, look into land value taxes.)
The real issue is that there is no central authority at the CA State or even Bay Area level planning growth holistically.
A company can hire 5,000 people tomorrow and they'll all just move here and look for a place to live, regardless of whether the city their employer is based in has any housing or not. That drives up rent. It creates the absurd traffic that we now get to enjoy every day of the week. It drives up the costs of goods and services.
Bay Area leadership and California leadership need to sit down and have a discussion with employers and cities about how to effectively and responsibly grow, and then move towards developing new infrastructure to support the plan that comes out of those discussions.