Rent Control surely just prevents local families from being muscled out by the tech employees?
Correct. And in the process of doing so, further contributes to the lack of inventory of market-rate rental units available to the influx of newcomers/tech employees.
As mentioned elsewhere in the comments here, this causes huge disparities for rents of similar units within a given building as landlords attempt to compensate for all the market-rate rent being missed from longtime tenants. E.g. I've known folks paying $4,000 while their neighbors pay $400. While I don't have numbers or a study to point to, my experience over the years with the SF housing market suggests the impact of this effect is nontrivial.
Hi, let me introduce myself. I am SF's housing crisis. So are many of my friends. We're those "local families" who have been living in SF for 15+ years in rent-controlled apartments. We're still here because the rent is cheap. If our rent went up even moderately, we'd probably move to the suburbs; by the time you hit your 40s, you get tired of stepping over panhandlers and human feces.
If you really want to get angry, let me tell you about the multiple times I've moved away for extended periods and kept the apartment unoccupied as a pied-a-terre. Rent control makes it affordable!
There are a lot of us, enough to occupy a significant chunk of the housing stock. Because we've taken this stock off the market, the available float is smaller than it would otherwise be, so everyone's bidding up what's left.
Would average rents go up without rent control? Certainly. But it would force a lot of us "local families" to make long-overdue decisions, freeing up housing, and driving down the average "new rent".
No, it absolutely is not.
Google or whatever doesn’t pay based on housing costs. They pay based on business value.
A number of companies have pay brackets that vary by location, to reflect cost-of-living differences in different locations. I can't tell you whether Google is one of those companies.
But rent control manipulates the free market. With rent control, people who might otherwise be priced out and forced to move away, aren't.
I'm failing to see the problem. Unless those people would have moved for reasons other than soaring rent, them getting to keep their homes is a GOOD THING.
But the bigger issue is that is artificially raises demand. That prices up for everyone else, which does more harm. It's a subsidy for older people paid for by younger people.
Instead of letting the bubble pop when it's harmless it's growing more and more and when it does pop it is going to be extremely painful.
The SF rent control law (like the CA Prop 13) does allow rents to increase, but very slowly. It would be possible to have both without as strong of adverse consequences by changing the ceiling at which both are permitted to increase.
Indeed! It's also worth mentioning that this has had the perverse side-effect of encouraging people to find any and every way possible to block the removal of old buildings.
Which is to say that the incentive to build new apartments has been matches with tools designed to prevent exactly that.
And, as ghouse indicates, new housing isn’t subject to rent control so developers make a killing if they get approval.
I’m not convinced it happens so much more in SF to cause the high rents. I think years of building almost nothing after the 208 crisis while jobs exploded is responsible.
Not even 1% as much as untaxing land and property does.
Deregulating the zoning restrictions would allow more buildings to be built. [2]
Here is a startling fact: in 2014 there were 142,417
housing starts in the city of Tokyo (population 13.3m, no
empty land), more than the 83,657 housing permits issued
in the state of California (population 38.7m), or the
137,010 houses started in the entire country of England
(population 54.3m).
Tokyo’s steady construction is linked to a still more
startling fact. In contrast to the enormous house price
booms that have distorted western cities — setting young
against old, redistributing wealth to the already wealthy,
and denying others the chance to move to where the good
jobs are — the cost of property in Japan’s capital has
hardly budged.
This is not the result of a falling population. Japan has
experienced the same “return to the city” wave as other
nations. In Minato ward — a desirable 20 sq km slice of
central Tokyo — the population is up 66 per cent over the
past 20 years, from 145,000 to 241,000, an increase of
about 100,000 residents.[3]
[1] https://en.wikipedia.org/wiki/Land_value_tax#Efficiency
[2] http://urbankchoze.blogspot.ca/2014/04/japanese-zoning.html
[3] https://www.ft.com/content/023562e2-54a6-11e6-befd-2fc0c26b3...
https://www.japantimes.co.jp/community/2014/03/31/how-tos/ja...
You'd really want some kind of net housing units measure, rather than housing starts, to compensate this when comparing Tokyo to other cities.
[edit]
Also due to house vs. lot-size restrictions the house would have been limited to just over 2000 square feet. This is regardless of the number of stories (i.e. a 2-storey house would need to have about a 1000 square foot footprint, but a ranch could have about 2000 square foot footprint).
That's exactly what I was saying. The owners of inner city land pay very little cost for monopolizing land that could be put to better use. It's a store of value that is unlikely to go down in value. There is nothing to offset the instinct to hoard.
>The same generation has now pulled the ladder up behind them to spit down on future generations.
All of the "it was boomers what done it" is just the 1% playing identity politics as a means of scapegoating and divide and conquer.
At the end of the day, the 1% millenial children of 1% boomers are going to be the beneficiaries of this ladder pull-up.