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Comment by earl | Hacker News Reader

My experience may be useful only for sf, but I live in the city in a nice (by my definition of nice: 100+ years old, solid wood floors, plaster walls, detailed woodwork, thick aged wooden doors, handmade ironwork) apartment. My landlord would like to sell the place to us, but our rent doesn't even cover the mortgage with a $100K downpayment. By the time you add HOA fees, insurance, taxes, and a 3-5% of value annual maintenance investment, my landlord pays me some $800-$1000/month to live in his apartment. Which is fine by me.

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It may be cheaper for your landlord to pay all that than it would be for you to do so, though, so he might not be losing that much. In particular, if he bought in a while ago, he probably pays much less than the official rate for property taxes, due to Prop 13 grandfathering in an anciently low valuation.

In Australia we have a concept called negative gearing which allows you to deduct that 800-1000/month off your income taxes.

I assume you mean for the landlord to deduct his loss, correct?

Insofar as negative gearing is a good thing, it's not a good thing for renters.

Investors need to be losing money for negative gearing to do them any good, and it won't magically turn that investment into something profitable.

It is helpful if they're speculating on a big capital gain. In fact that's one of the recurring criticisms of negative gearing - that it encourages speculation and inflates property prices, neither of which are good things for renters.

People have, inevitably, used it to engage in various tax-reduction schemes, with varying degrees of succes (see the 2004 Australian High Court case of Hart v Commissioner of Taxation for an example of that _not_ working out). This is not a good thing for renters either.

Yeah it's a terrible thing now that it's in place but removing it now would be even worse for renters.

Why doesn't your landlord raise the rent?

Because it's in San Francisco. Rent control.

For the record, my apartment is not rent controlled and as far as I know, most apartments in SF are not. The landlord is constrained by market rents.

From your description, you qualify for rent control, which means your landlord can only raise you rent at the rate of inflation (with certain exceptions).

From http://www.sftu.org/rentcontrol.html:

San Francisco's rent control law covers most rental property in San Francisco. If you live in San Francisco, you are covered by rent control unless you fall into one of these major exceptions

1. You live in a building constructed after June of 1979. This "new construction exemption" is the biggest exemption in SF

2. You live in subsidized housing, such as HUD housing projects.

3. You live in a dormitory, monastery, nunnery, etc.

4. You live in a residential hotel and have less than 28 days of continuous tenancy.

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