If you want to solve housing problems, the solution is to give people money for housing, not to give handouts to existing owners/renters.
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Rent control seems to create more problems that it solves.
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Z..
Member
No, just indicative of a sheltered existence considering the abhorrent consequences free enterprise has had on a global scale while benefiting only the few privileged elites that wield influence (talking about nations here and not individuals/corporations).
It's as naive a belief as thinking you can actually earn or deserve to be prosperous in a first world context.
Sf has the same. I think most rent control places do. Mumbai just sounds like someone wrote an aful law. It also sounds like a steawman some landlord looked up to try and argue his case. Sf has problems with zoning and building, but I wouldn't say rent control is the problem there. Rents are insanely high, far above the costs of maintenance and I upkeep.
Vanillalite
Ask me about the GAF Notebook
There is only so much room in places like Vancouver or San Fran proper as it is even if you go full urban and build up not out.
stupid ad hominem i see
Z..
Member
2008. PoliSci like yourself, actually. International Relations MA. Learned quite a lot about the beauty of free enterprise from first hand accounts while doing my thesis on Nigeria's oil industry... or attempting to, had to switch topics halfway through since it was going nowhere.
Had enough US coworkers in London to know this is a discussion that would be going nowhere, though... Love you guys to the core, but certain cultural barriers are just completely insurmountable for a left leaning idiot such as me.
Rent control creates a different class of fuck you, got mine renters. A real misalignment of class interest where renters act as pseudo owners. It is in a rent stablize'er's interest to prevent new housing units since they are no longer affected by supply and demand.
Rather, preventing additional housing it's now in their interest because new residents cause them to lose marginal utility in public goods. So fuck you, got mine. Rent regulated citizens support racist nonsense like down zoning and historical preservation of entire neighborhoods.
Conveniently this also aligns with the interests of the rent seeking class because they can now expect appreciation on both their land and structure value, rather than just land.
And how many econ courses did you manage to take in the course of that degree, exactly?
NYC does not have an open market.
I have no idea what most of this mishmash of words is saying, but I don't think people trying to prevent development in SF are limited to people on rent control, nor do I think that everyone on rent control wants to stop development.
But I also think "fuck you got mine" tends to be a phrase used by people who want to fuck over others.
Sure.
If you want to regulate a complex system a good starting point is to understand why the system works the way it does. Otherwise your regulations will not have the effects you hope for.
Rent control is a good example of that failure. There are basically zero examples of markets where it has actually worked.
Yes you can.
I mean I wouldn't build houses. I would build high-density housing. Single family homes shouldn't exist in any great number in places like the Bay Area. They don't exist in Manhattan!
But we can absolutely build housing. The dysfunctional housing markets I'm familiar with are literally full of poorly utilized land that has been devoted to low-density housing. That's why there's no housing! The land was used incorrectly!
...yes? If more people live somewhere then more public services will be required for those people.
This doesn't sound like an insurmountable problem. As I understand it, lots of people in Tokyo have access to public services, so any place less dense than Tokyo* has no excuse.
I spent the last ten years of my life living in rent-controlled areas of the San Francisco Bay Area.
Rent control utterly failed at accomplishing any of these goals. It is impossible to overstate the magnitude to which rent control did not solve these problems.
If this is your argument for rent control then it's basically a stone that keeps away tigers.
It's not a magical solution to all problems. It's a specific solution to this problem, and in general, any problem where the issue is that supply is being artificially restricted by bad public policy. Increase the supply!
Yes, in my observation, it's because captured regulatory agencies have made it uneconomical to build high-density housing by adding lots of expensive barriers to new development.
The solution to this is not rent control!
* Approximately all places.
People who have rent controlled apartments are very interested in NOT having new people move in. And especially not new poor people. They become the problem.
New York City has extremely aggressive rent control laws.
It happens that New York City is some of the highest-demand land in the world. That's why it's very expensive to live in New York City.
I will admit that it's probably hard to upzone New York City any more than it is, but rent control isn't solving the problem either. The problem is just that too many people want to live in New York, so only people with a lot of money can actually afford to do it.
I'm not actually capping for rent control though. I'm pushing back against the idea that trusting the free market is the way to go on this. It ain't.
We're not saying go full lassez-faire, we're saying that letting local residents control development leads to very bad outcomes.
Rent control is a well-intentioned solution that doesn't work, it only creates more problems, in part because it magnifies the zoning issues.
I mean, there's a difference between "just have libertarian capitalism wooo" and "let supply and demand operate to clear the market."
edit: Kirblar is like 60 seconds faster than me on every post I'm making in this thread
I think I agree with that and you made your case well while being pretty succinct.
As long as what needs to be regulated does to benefit the overall health of the market
A full 1/3 of the New York City Population owns their house. It is in their interest to limit new housing stock because it:
--Drives up the price of their home and prevents additional people from sharing in their public goods (look at the village, middle village and Staten Island for examples of this.
A full 1/3 of the New York City Population is rent controlled or stabilized. It is in their interest to limit new housing stock because it:
--Forces them to share public goods with additional people, parking is usually number one, crowded subway, schools (if you really want to see modern day racism go to a rezoning meeting) and good ol' fashion direct racism (Woodlawn recently had a mini clan meeting at a community board.)
A full 1/3 of the New York City Population rents at market rate. It is fully in their interest as well as the interest of the 66,000 homeless in the city, and every newcomer to the city to build additional housing.
It is not the fault of newcomers that the city is wholly inadequate at building or maintaining infrastructure and that public servants are treated as patronage centers for upcoming elections.
I see your point. The bolded is something I personally witnessed as a nyc resident
Z..
Member
Doubling down on the oversimplified rhetoric and using the UK housing market (lol) to make a point? This is too good...
I have very little understanding of how higher education works in the US, but I must ask... is this an actual serious question? What kind of PoliSci course allows you to go through it and not get beaten to death with at the very least micro/macro theory classes? Oo I had a requisite minimum of at least 3 different econ classes (personally it was mostly micro/macro and some FinEc/Metrics) per semester for 4 years. For context, my internship was with TMX in London.
Did I take econ courses? Oo
That doesn't matter in NY, as NUMEROUS condo buildings will stay virtually completely empty for YEARS and the prices will not drop one cent. I've seen this first hand with several large condo buildings here in Bklyn. The people who have the money to build these condos don't care to sit on empty units and wait for people to cave and pay what they want. I've also been told that this doesn't hurt them at all because they write it off each year as a loss on their taxes.
The bigger problem in NY and Brooklyn specifically is that EVERYTHING going up is a condo. And you can only buy, not rent. That right there constrains supply. Lots of people (comparatively) could afford $1500-2000 monthly for a one bedroom condo - far fewer can afford the $500-700K it takes to buy one (even with a $100K down payment, you're looking at another ~$3200-4000/month between mortgage and maintenance fees). It's just absurd.
They could fix a LOT of problems by simply mandating that a certain percentage of units (say, 25-35%) in all new developments MUST be rentables.
Where is the failure in that graph? New housing goes down, prices go up?
The recent building boom, generated by the expiration deadline of 421a, rents are now falling.
http://ny.curbed.com/nyc-rental-market-reports
BlitzerRadic
Member
This is not what is going on in San Francisco. NIMBYism and the fight over rent control are two different things. Namely, NIMBYs are property owners who oppose any type of development because it would lower the value of their property.
Proponents of rent control want new (low cost) housing to be built. They see rent control and low cost housing as a means to protect lower income citizens from being displaced by techbros. Issue with this is that developers don't want to build low cost housing because they cant make their money back. So housing advocates block them when they try to build luxury condos.
Because the NIMBYs and housing advocates are preventing new stock from being built, what is now happening is that rental property owners stuck with below market renters are using what's known as the Ellis Act to evict their tenants and convert their apartment buildings into condos which end up getting sold to techbros anyways.
As a landlord in the SF bay area, I'm not a fan of rent control, but I can tolerate it. It's the eviction control rules that I have a problem with. It's extremely difficult (read expensive) to get rid of problem tenants.
Giant Panda
Member
BC is still in the middle of a crisis, and foreign money is part of it. The other part, like you said, is a lack of supply. In a democracy, it's really hard to rezone - property owners vote and donate, and they hate you if you zone their land for higher density. Developers also make more money by building small units as they sell more easily and they get more per square foot.
What is needed more than anything in these big cities is to redone all low density to medium density, and to have 'family zones' where almost every unit built in a cluster of buildings is a 3BR. Add some schools and daycsres in lobbies and you've got yourself a 21st century family community.
This is very well put, and illustrates the problem with rent control as a solution to housing prices as opposed to simply expanding housing.
NullPointer
Member
Then I'd suggest people with those options take them.
As a life-long resident of SF, rent control is the only reason that both myself and my mother still live in the only city we've ever known.
Too many people looking at this issue look at it from the perspective of somebody with options deciding to move here, and not the people who have and still do live here and are trying not to be swept away. And believe me, a lot of us have been swept away, and its been the insane and insanely quick rise in rental prices that has done it.
Rent control and eviction control are intrinsically related. If you can easily evict tenants then you'll just evict them whenever you want to raise the rent.
Bay Area landlords already do this constructively by simply providing poor upkeep and habitability, but as you noted they're now also trying to do it directly.
Well honestly, another problem that economists are noticing but having difficulty find the reason, is people are migrating less than any other time in a century. Migration usually enables upward mobility.
entremet
Member
Aren't foreign investor buying those up?
The real solution is to end permanent private ownership of land. If people only had a lease of like forty years and it went back to the government, there would be no issues with bulldozing buildings that don't make good use of land. Get rid of small houses and old apartments buildings and release the land to new developers to make hirise apartment complexes to provide much more housing on the same land.
Mammoth Jones
Member
Rent control/stabilization is fine. Problem is when mofos have a low rent and still don't pay that shit. Then got a sob story when we try to get them evicted. Repeatedly. Then you take it to arbitration and agree on a repayment plan, they agree to a repayment plan. The don't repay.
Fuck this sideways. That doesn't solve anything. Just creates a completely different set of problems. Don't want communism.
Fuck this sideways. That doesn't solve anything. Just creates a completely different set of problems. Don't want communism.
Goro Majima
Kitty Genovese Member
Is the government buying the lease back from you for fair market value in this scenario? Or for FMV at the time of enactment?
Because otherwise you've eliminated the single best and most viable investment vehicle of the middle class whereas the wealthy can invest in other things. Instead we should be trying to increase land ownership for all individuals rather than a privileged few and that includes the government.
I agree with the notion to build taller in San Francisco but maybe as condo developments with regulations against speculative and foreign investments. The problem is that NIMBYism and local governments are blocking this from happening and San Francisco is geographically limited. It seems that the city proper could transform into a new Manhattan but it's being resisted from every which way.
Hephaestus
Member
I guess thats the question if its being resisted from every which way then why do it? Or is it everyone right to live where ever they want no matter what? I would have to imagine that eventually a city just hits a maximum number of people that it can physically hold.
SF always seems to have such weird stories coming out of it. People complained that "Tech-bros" raised the rents too high for average people to live.
So the "tech bros" moved outside the area and took luxury buses in. People then protested the buses saying its not fair that they dont have to take public transportation.
And lately didn't several large tech companies announce they were going to build massive dorms for their employees to live. So that would have freed up a massive amount of rental units. But people are protesting those as well complaining that its not fair they get to live in awesome bubble, and not have to deal with living in the city?? I guess.
Kalamari
Member
I think the problem is with the the city itself. Cities everywhere have neglected housing issues or are trying to squeeze more residents into an already congested space, or both. They do this for a number of reasons. It's not the fault of capitalism, ti's the fault of local governments failing to do their job and/or plan ahead. The easy answer for them is often to squeeze more people into an already congested space, with no consideration of the fact that you can only fit so many people into fixed boundary.
Kremzeek
Member
We have rent stabilization in West Hollywood.
I've lived in the same building for almost 10 years, because my rent by law can only go up like 5% per year. Which is a HUGE relief because it is a known factor I can plan for.
Living someplace where scumlords could theoretically raise my rent $500 just because they're greedy or the area is "in demand" would be horrible!
entremet
Member
Public housing was gutted by Bill Clinton, so cities can't really build anymore properties on their own. They're reliant on the private sector, which obviously want to make a return on their investment, hence the focus on luxury condos.
Reagan's BR
Banned
In short it creates a housing shortage.
i3allistic
Member
sprinkle some homelessness demanding free housing ...because shelters are not good enough ....and we have the SF/Oakland Problem
No shit, we have known about the drawbacks of price controls since Diocletian, and the experiments have repeated over and over again for 1700 years with the same damn results.
Anyone who suggests price controls as a solution to an economic problem should be immediately dismissed as a complete incompetent. Same with anyone who is against free trade.
Free trade and the negatives of price controls are two of the closest things the social sciences have to scientific facts. To the point that even hardcore leftist economists mostly agree on them.
Where the leftists would probably part ways with me is in looking at the root causes of the price inflation that leads invariably to demands for price controls, namely fiscal and monetary profligacy on the part of the government, but no one really disagrees on the effects of price controls themselves.
Anyone who suggests price controls as a solution to an economic problem should be immediately dismissed as a complete incompetent. Same with anyone who is against free trade.
Free trade and the negatives of price controls are two of the closest things the social sciences have to scientific facts. To the point that even hardcore leftist economists mostly agree on them.
Where the leftists would probably part ways with me is in looking at the root causes of the price inflation that leads invariably to demands for price controls, namely fiscal and monetary profligacy on the part of the government, but no one really disagrees on the effects of price controls themselves.
Kalamari
Member
Private sector only builds what is profitable, unless they are benefiting is some other way, i.e. employee housing. If there weren't so many regulations, building affordable housing could be more feasible.
Yeah, but the Bay Area is nowhere near that. Large chunks of even San Francisco are filled with low-density single family housing.
Saying the expansion is being resisted from every which way isn't accurate. It's not being resisted by the huge numbers of people who want to live in the city. It's only being resisted by a small percentage of the people who already live there. The problem is, those people control a lot of political power.
This idea is literally what's wrong with America.
A house is not a good investment.
Instead of going through these weird, odd hoops that distort the market and cause more problems than they solve we should simply give poor people more money so they can buy food, housing, whatever.
All of these restrictions and limitations we put on welfare is a giant signal to people in need that society thinks they are too stupid to make their own decisions and getting help should be as time-consuming, painful and embarrassing as possible.
All of these restrictions and limitations we put on welfare is a giant signal to people in need that society thinks they are too stupid to make their own decisions and getting help should be as time-consuming, painful and embarrassing as possible.
^^
The bay area is not even close to Manhattan in terms of density, and hell, even Manhattan could and would be more dense(and was in the past) if it were more feasible to build at scale there.
A house is a terrible investment even with the mortgage interest deduction and the restrictive zoning laws and other regulations that arbitrary inflate prices by restricting supply. Without government protectionism, real estate is a pretty poor investment, especially in jurisdictions with high property taxes.
Housing is clearly not the 'best and most viable' investment vehicle in an era of low cost index funds, but really it wasn't even a good investment in the old era of blue chip stock investing.
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