Comment by simoncion | Hacker News Reader

Comment by simoncion | Hacker News Reader

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Sorry for the delayed reply. I took a break to do useful things.

> The property's mere continued existence is adding that value.

And did you keep a straight face while you were typing those words?

Let's say that I own a car.

I purchased this car as a new car some time ago. I regularly fail to perform maintenance of any kind. I frequently operate the car when it is critically low on lubricants and coolants. I regularly strike deep potholes and large rocks during my travels.

I frequently eat inside the vehicle. It is littered with food wrappers and decomposing partially-eaten meals from months and years gone by. I also frequently transport unwell animals inside my car. These animals often vomit, urinate, and defecate inside the car. I have never cleaned the interior of the vehicle.

Because of my failure to maintain the vehicle, its engine and suspension are a wreck. They are dangerously unsafe. Because of my failure to clean the interior of the vehicle, it is -at best- a horrifying, ungodly, malodorous mess, and -more likely- a serious health hazard.

My wilful negligence has significantly decreased the value of the car.

Why does your assessment of the situation change when the durable good changes from an automobile to a multi-family dwelling? Is it because the on-paper value of the building has dramatically increased over the past couple of decades?

If it is, then you must understand that the credit for that on-paper increase in value is to be completely given to the local government, because of its zoning laws which have resulted in a dramatic undersupply of housing in the area.

The landlord in this situation is -like our negligent car owner- failing to maintain (let alone improve) his durable good. In a sane market, this would cause the on-paper value of his durable good to decrease.

I say again. $CURRENT_LANDLORD has done nothing to improve the value of his property. To this I add: The City is the one who drives the value of his property up and hides the deleterious effects of his negligence.

Now do you understand how you misunderstand the rather special situation in this city?

"If it is, then you must understand that the credit for that on-paper increase in value is to be completely given to the local government"

No. The value assessments are made by potential customers and suppliers in the area. Sure governmental actions have been one part of the causal chain, but only one of many. The fact that the building stands ready, not decrepit enough to bring down the general attractiveness of the area, is partial credit to the landlord and her choice of tenant.

"because of its zoning laws which have resulted in a dramatic undersupply of housing in the area."

Might the rent-control laws have had something to do with it too? (After all, zoning laws aren't easily effectively changed on an area that's already filled in.)

> Sure governmental actions have been one part of the causal chain, but only one of many.

In San Francisco, government action has been the sole source of increase in the on-paper value of rental properties for at least the past five years. Every other action taken by any landlord has -in comparison- so little effect as to be unnoticeable. Because of this, many landlords make the entirely rational business decision to do absolutely nothing to increase or maintain the value of their property. It's not like they need to compete for tenants.

> The fact that the building stands ready, not decrepit enough to bring down the general attractiveness of the area, is partial credit to the landlord and her choice of tenant.

You don't seem to understand two things:

1) The rental market in San Francisco. In the past five years, SF's population has increased by ~50,000 people, but only ~7,500 new housing units have been built. [0]

2) The fact that any landlord can recover 100% of the damage done to their property from a tenant.

> Might the rent-control laws have had something to do with it too?

In San Francisco? No. New construction is not covered by rent stabilization regulation. [1] In regards to temporary demolition of rent controlled housing to make way for denser housing, the Trinity Place project has set a really good precedent. [2]

> (After all, zoning laws aren't easily effectively changed on an area that's already filled in.)

The major zoning issue in SF that blocks new construction is building height limits. So much of SF is not permitted to have buildings higher than three or five stories. Note: This is not because of seismic concerns, this is because of "neighborhood character" concerns. [3] We're not talking about constructing heavy industry in a residential zone. We're talking about building taller residential buildings in a residential zone of a thoroughly urban environment.

[0] http://sf.curbed.com/archives/2015/02/04/sfs_population_is_g...

[1] https://news.ycombinator.com/item?id=10371695

[2] https://news.ycombinator.com/item?id=10161813 (See footnote zero attached to that comment.)

[3] Neighborhood character concerns are very valid. However, at some point you have to ask yourself, "Which does more violence to the character of my neighborhood? Requiring someone to pay at least $36,000/year to rent a slowly decaying "one-bedroom" apartment, or installing several carefully planned and architected ten-story apartment buildings?".

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