The housing problem is because CA et al fight new construction.
This does far more to hurt renters than anything else: https://www.latimes.com/local/lanow/la-me-ln-housing-bill-co...
This does far more to hurt renters than anything else: https://www.latimes.com/local/lanow/la-me-ln-housing-bill-co...
https://www.cato.org/publications/research-briefs-economic-p...
Pretty much the only study I’m aware of that took the issue head-on, from the Cato institute.
They found that rent control greatly benefits recipients, that rents increase diffusely citywide (about 5%), and that the overall positive and negative impacts were roughly equally balanced (~$3Bn over 17 years). The net is slightly positive, in fact.
In other words, rent control pretty much does what’s printed on the tin: helps certain renters a lot, hurts others a tiny amount, averages out to zero net impact. Here’s the TL;DR:
”On net, incumbent San Francisco residents appear to come out ahead, but this is at the great expense of welfare losses from future inhabitants.”
You can certainly debate the desirability of that outcome, but it’s exactly as advertised.
I'm seeing phrases like (gross cherrypicking, also doesn't represent the full picture article, I know, I know) '15 percent decline in the number of renters living in these buildings' and 'led to a higher level of income inequality in the city overall'. This and conclusions like a 5% increase in rents city-wide suggest that the policy is not improving the housing affordability situation.
Indeed, it looks like rent control is great if you can get it but is making any housing shortage worse.
As I said, you can certainly dispute the goal of favoring incumbents over new residents. There are also issues with landlords in rich neighborhoods wiggling out of the controls, which lead to the rich/poor inequities you note.
But on net, it does what people want it to do: protects existing residents, with a minimal net impact to the housing economy.
You should read the article before you assert that your opinions rebut its contents.
Rent control does not prevent developers from building new construction, in fact it may promote new developments. Rent control reduces the cost of housing for a select few people who haven't moved in a while, which artificially raises the prices for newer tenants that just moved into a neighborhood. Higher prices for new tenants make developing new housing more attractive, not less.
I think you have switched cause and effect. Developers have to charge higher prices because they have to subsidize rent controlled units. Without rent control you may get away with charging $1000 per month to cover your costs and then slowly increasing prices as inflation picks up over the years.
If you expect 3% inflation but rent control only allows a 1% increase then only charging $1000 will result in a net loss over time so you will have to adjust the rent upward. Assuming a tenant in a rent controlled unit stays for 20 years then the land lord has to charge the tenant $1400 from day one.
> Developers have to charge higher prices because they have to subsidize rent controlled units.
I don't think these two points are contradictory. Yes, rent control increases housing prices on newer units. However, higher prices on newer units provides incentive for developers to build new construction rather than squeezing everything they can from existing ones.
If I didn't mind the financial outcome (because I didn't have the money in the first place) I'd have hung on for dear life.. instead I took the settlement and found another living situation.
> "The Cato Institute is an American libertarian think tank headquartered in Washington, D.C. It was founded as the Charles Koch Foundation in 1974 by Ed Crane, Murray Rothbard, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries."
I also have a hard time supporting it just in principal - it restricts mobility, disincentivises renting out property at all, and puts young people and immigrants and anyone else who didn’t happen to get here first at a disadvantage. Then the only housing those folks can get is market rate housing, which we now just call luxury housing as a shorthand even though it’s the only possible housing, and now we can write them off as rich assholes and pretend there’s not a housing problem.
Obviously the causality of these issues is complex, and it’s not all the fault of rent control, but it does seem to be a major pillar of this whole crazy mess we’ve created here.
One last point — think about how big of a deal that 5% increase really is. The median rent is around $3500 for a 1 bedroom apartment, that’s $175 a month the average person in the city could save. That’s significant.
Mods, if you can’t control the ideologues, it’s time to get rid of graying of downvoted comments. People are just using it to censor speech.
The housing market in California is already non-functional because supply is not allowed to meet demand, which puts renters at a tremendous disadvantage. Efforts to relax restrictions on new housing construction have failed.
Adding restrictions until the market breaks in ways that everyone hates might be the only way to get any momentum toward fixing things.
[1] https://sf.curbed.com/2019/3/21/18276227/vacancy-rate-san-jo...
[2] https://abc7news.com/society/homeless-population-history-in-...
Why are these homes vacant? Should people be allowed to take a month of vacation without losing their home? Is it ok for an apartment or house to be empty for a few months in between residents?
One month in between tenants every two years is more than a 4% vacancy rate. What should the vacancy rate be?
And what if in addition to housing the homeless we also want to house workers with unreasonable commutes?
Every single person I know who has raise this X vacant homes and <X homeless has not bothered to ask these very basic questions.
We need more homes. 25% more than we currently have, in the high demand areas. We don't need hem in Detroit or Stockton, we need them next to jobs. And we need to stop the profiteering home owners who speculate on the value of their homes by blocking others from living close to them.
As to why landlords leave units empty; rent control. Rent control and strong renters protections, combined with dramatically increasing market rate, means landlords will get more money if they keep a unit empty for a year.
Are they? I don't see much of the Bay Area but I haven't notice many vacancies at all, and the rates overall are low from what I've seen, something like 5%.
I'm all for vacancy taxes, and actively looking to see how to get one passed in my city. But I don't think it's going to do much other than provide a revenue stream for homeless services, like Oakland's Measure W. I can't see them helping with the housing situation based on these sorts of low vacancy rates. We need 25% more housing than we currently have, and a 0% vacancy rate is pretty much impossible and a horrible situation for renters, so I would hate to see the vacancy rate go any lower.
If more companies embraced remote workers or even just partial remote work, this problem would be greatly alleviated.
People want to live in the Bay Area, it's wrong to exclude them.
While there are a lot of nice things here, people mainly want to be here because of the jobs. If you help distribute the jobs via remoting, it will really help in reducing demand for very limited resources
This isn't just a social issue, it's also a climate issue. Even if we assume extremely ambitious goals of 100% EVs and 75% of energy from renewables in 2050, we need to drastically reduce the amount of vehicle miles traveled in California, which means denser housing with mixed uses.
Right now that sort of necessary housing and business is illegal in most of the peninsula. We need to change that.
It really is just gate-keeping to keep others out.
Distributing jobs is not a solution, because sprawl is not a solution. We must make better use of existing land, rather than consuming more farmland or nature.
Remote work is still a good tool because it requires no extra upfront costs or slow to pass legislation; it can be done right now to offset demand of a scarce finite resource: living space. Moreover, it doesn't have to eat up new land. I would imagine it could help revitalize urban centers such as Detroit and other cities in the Rust Belt
I don't know why this has to be the case. Can you expand upon the reasoning that makes you think this?
Here's a couple different models of what building adequate housing would look like:
https://medium.com/@firstcultural/how-california-can-build-3...
Also, it's not just physical space that's a resource limit: there's also time (how fast can you build it?) and money (do builders have enough financing). This is with the optimistic assumption that NIMBY legislation doesn't get in the way, which is why I still feel that remote work is still the most ideal solution, since the only roadblock it has is company culture.
I guess another solution is the route Palo Alto is taking: hinder or destroy the local economy to limit demand of physical space. I don't agree with this since only wealthy people can afford to deal with it.
To me it seems the problem is that the braindead NIMBYs successfully co-opted the locals with property, thanks to the property tax boogeyman.
I've seen the idea of a vacancy tax thrown around. Not sure how effective it would be, but might be worth trying.
It's time to stop treating housing as if numbers don't matter, and the only thing that matters is our feelings about seeing a crane.
There is a massive housing shortage, and people that deny it are just as fact-free as climate deniers.
[1] https://www.reddit.com/r/urbanplanning/comments/d0a9wb/top_2...
That's very much NOT 100,000 livable houses sitting around being owned by speculators.
A much better way to look at it is vacancy rate. SF's vacancy rate is around 5%, which is very low and indicates that nearly all of the housing stock is being used. For a lot of the same reasons that a 0% unemployment rate is not possible, it's not possible to have a 0% vacancy rate, and in practice 5% is about as low as you can get.
refers to the metro area which includes a much larger area
also, did you seriously think that the problem with homelessness is that they didn't have a house to stay in?
That's a crock. That computes to 1.78 million units in SF. That overstates the number of units by a factor of at least 3!
- didn't control much more than egregious rent increases
- didn't apply to new housing
- expired after a time
This is accurate, this year the increase limit is 7%, which is pretty much unheard of except in the most egregious cases.
> didn't apply to new housing
> expired after a time
The expiration is on the waiver for new buildings.
Rent control won't apply to buildings that opened within the past 15 years, and it won't apply to single-family homes, unless they’re owned by a corporation, or duplexes where the owner lives in one of the units.
I understood that it meant the controls would only be in effect until 2030.
Each city has its own law.
Edit: whoops... I had meant the currently active laws, not the new statewide law. Now I realize the comment was about the new law.
If the rents are high because of a lack of available units, you build more units or make more units available.
If you are at peak carrying capacity in a given city you need to expand infrastructure (vertically or horizontally) to support more & denser development.
The trick is both can require public spending to make work. You can't just rezone and let a city go and expect magic in the first case scenario. You often need government subsidized building of cheap apartments to spur the economy to build up and attract investment / higher paying residents to build generalized housing. Most developers are looking for the highest margin building they can do, and while in theory any potential profit from building should eventually be met there are only so many construction companies, especially urban highrise class builders, and they prioritize the best deal.
This rarely happens because developers want to pocket that difference, nimby wants zero development, and everyone wants to spend that money on their own ‘critical’ projects.
It's not possible that desirable places may have more demand than physical space?
Why not say, "sorry, we are full"?
It really comes down to transit not where lines are drawn on a map.
But yeah, property taxes can be rough, they’re meant to ensure that you’re not sitting on land that could be used more productively. On the other hand, your neighbor’s investment in land has apparently paid off in terms of appreciation.
With prop 13, I’d support age-based property tax abatement, but the current way it’s set up is insane (commercial property gets the same treatment, the tax basis can be passed on to heirs, if you sell less than some fractional share of the land, it doesn’t trigger a reset, and some other insane provisions).
True, I would have built a 10,000 square foot single famly home with a massive yard in manhattan facing central park but those damn regulations are making it too expensive /s