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Comment by gergles | Hacker News Reader

I used to live in a building near a Google shuttle stop on the border of the TL. They wanted to raise my rent almost 20% y/y for a lease renewal, and the place was a trainwreck quality-wise (as was the neighborhood.)

When I went to move out, the leasing agent just shrugged and said "Some Googler will happily pay even more than that."

The real problem is SF prohibiting any dense housing from being built anywhere in the city and also the failure of running reliable/usable public transit to any region outside of the area bounded by BART and Market Street. Rent control certainly doesn't help (though I think there should absolutely be a rent stabilization law -- everywhere.)

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I don't think they're prohibiting dense housing per se, just not approving/building enough of it. There have been several 50-story condos opened in the past few years, and several more currently under construction, but they're not enough to keep pace with growth in demand. It didn't help that there was a ~2-year lull in construction when a bunch of developers got into financial trouble during the financial crisis and had to put projects on hold. It's not as if SF isn't dense; it's the 2nd-densest city in the country, and way-way-way ahead of local peers San Diego and Los Angeles.

I agree on public transit, but it's not clear what to do about it. An east-west Geary subway line has been proposed since the 1930s, but it's really expensive to build in an earthquake zone, and the city / taxpayers just haven't been willing to pay what it'd cost. A cheaper alternative that leverages the already-built infrastructure might be to convince people to live in under-developed areas that do have good transit already, such as Oakland, which is actually closer to downtown SF by transit-minutes than much of SF proper is.

One thing that would help on the latter issue is if more of the suburban cities on transit lines also dropped their anti-development attitudes. For example, there is enough demand that there should be condos/apartments near the Palo Alto Caltrain station. But Palo Alto won't allow it, because they have some idea of an upper-class suburb full of single-family homes that they'd like to protect.

Instead of a subway line, would it be possible to close off one of San Francisco's many east-west streets (Geary if you like, probably a couple north-south of there would be better) and run a light rail line (using Muni Metro or similar cars) on an east-west route?

You could adjust the timing of the traffic lights to ensure that the rail line always (or usually) has priority and cross the whole city in ten minutes.

There's a plan currently under discussion for bus rapid transit on the Geary corridor, which is sort of the el-cheapo version of that idea (http://www.sfcta.org/content/view/37/70/). Give the bus a dedicated, physically separated lane to reduce traffic problems, and build light-rail-esque, less frequent stations in the median with level boarding. Not a full solution, but the hope is that it'll raise the average bus speed significantly.

I hope they plan to raise the average bus quality too; riding Muni is less like public transport and more like a homeless shelter. I couldn't imagine doing it every day.

I really think both the Geary and Van Ness corridors need at least a monorail to handle the capacity. BRT seems like a band-aid, to me. Of course, it's cheaper and quicker to deploy. Long term, though, if they build the Geary corridor as envisioned (dense housing) then I think something like monorail would be suitable.

> You could adjust the timing of the traffic lights to ensure that the rail line always (or usually) has priority and cross the whole city in ten minutes.

Not if you wanted to pick up or drop off passengers. :)

But I've ridden N-Judah, and not loved it. Unless it's elevated or subterranean, it's going to be slow.

I believe there are some political issues (neighborhoods decrying the loss of "Old SF") in addition to somewhat onerous (compared to SJ) planning requirements, specially north of Market (where no building shadow shall impinge on a public park during the hours of 10am to 4pm or something.

Developments typically appease the loud-voiced locals by either pulling out of development plans or modifying their original proposals to lower heights (and thus lower density).

It seems some voices SF, while urban, would prefer to keep SF a quaint victorian town. I mean, we're in the 21st century, allow the city to grow like a city.

An east-west Geary subway line has been proposed since the 1930s, but it's really expensive to build in an earthquake zone, and the city / taxpayers just haven't been willing to pay what it'd cost.

That hasn't stopped the MUNI subway expansion north under 4th Street and Stockton.

http://centralsubwaysf.com/

I think there should absolutely be a rent stabilization law -- everywhere

Do you think this on the grounds of economic theory? The empirical finding is that rent control laws limit the supply of rental housing unduly wherever they are enforced. What's a successful example of a place with a "rent stabilization law"?

http://www.econlib.org/library/Enc/RentControl.html

http://econjwatch.org/articles/rent-control-do-economists-ag...

Rent stabilization (if applied fairly; New York's 1947-era rent control doesn't qualify) is a good thing, but it's a temporary fix. It's only one part of the solution, because it doesn't do anything to fix an intrinsic shortage.

More necessary is taxing landlords and owners of large amounts of real estate (anyone owning real estate at more than 12 times the average pre-tax income in an area qualifies) at very high rates and using the funds to build the best public transit system in the world-- a long-term solution that obviates the need for stabilization in the first place.

The first article you link actually suggests, sort of indirectly, that NYC is an example of a place with successful rent-stabilization. The article argues that the reason NYC hasn't been destroyed by rent control is that it liberalized rent control into the more flexible rent stabilization (which allows market-driven changes, just within certain year-to-year rate limits), which mitigated the worst problems of rent control.

I don't really have a worked-out position on the question, but I'd tentatively think that stabilization that doesn't amount to de-facto freezes would avoid some of the worst problems, since prices would track the market, just with a lag, as opposed to never doing so. For example, the problem with CA's Prop 13 isn't that it limits the y-on-y assessment increase for property-tax purposes, but that it limits it to 2% per year, not accounting for inflation, which is such an absurdly low limit that assessments will never track market prices, even in a delayed sense. Esp. since in years with >2% inflation it actually mandates a cut in real valuation. (Also, if I had my way, I'd remove the inheritability of rent-stabilized rents and Prop-13 valuations, to avoid any weirdness crossing generational lines.)

You seem to be conflating "rent control" and "rent stabilization", which are two different things.

Also, these economists appear to be ignoring a simple practical matter.

The idea behind most rent regulation is to avoid pricing low-income-but-necessary-to-basic-function people out of an area. These are, basically, the garbagemen and janitors and cooks and such, who can quickly find themselves priced out of anything within a reasonable distance of the city.

This results in a corresponding shortage of those services in the city, and prices for those services increase until even the wealthy -- who can still afford the higher rents -- are not willing to bear those costs to remain in the area, and begin leaving.

This can happen surprisingly quickly. In modern environments where many lease agreements come up for renewal at essentially the same time, it can happen frighteningly quickly, far more quickly than new construction can hope to "correct" the housing shortage.

That's the stated justification. The real reason is that politicians of certain stripes enjoy redistributing wealth from the landlord class to the tenant class and getting rewarded with votes for it, so the stated reason is disingenuous anyway, but let's examine the stated reason carefully.

Has this ever actually happened? Has any city ever run out of garbagemen and janitors due to a lack of rent control? I have never heard of anything like this happening, even in extremely expensive cities with free rental markets.

Yes, this happened in San Jose during the last bubble, when Firefighters and Police couldn't afford to live in the city.

Who on minimum wage can afford to drive a car for an hour to work each way?

So they should be paid better, and the burden spread among the constituents of those services. Not pinned on landlords.

As long as the rules are reasonably stable, it's not "pinned on landlords", because they presumably already took those considerations into account when purchasing their property, so everything is priced in already, and it's a wash from their perspective. The only people really injured would be those who purchased property under one regulatory regime, and then unexpectedly had it changed out from under them to a different regulatory regime.

Well that's even worse, as the whole cost is pinned not just on landlords but on a single generation of landlords. Bam, I just took away hundreds of thousands of dollars of your money with a stroke of a pen, how do you feel about that?

Much better overall if the increased cost merely gets reflected in a rise in wages for unskilled labour in the city. If indeed it ever is an actual problem which I don't believe it is.

But it does matter, because it tends to be a disincentive to get into the landlording business, which tends to further decrease inventory, which tends to make the problem worse, which tends to necessitate more onerous regulation, etc.

I mean, hell. It would even be an improvement to just levy a tax on all landlords to pay for a housing stipend for public workers. That way it's evenly spread among landlords instead of just the ones unlucky enough to have ultra-tenacious tenants.

That's called the free market, no?

If someplace is paying minimum wage and can't find people to fill the positions (due to high housing/transportation costs), they'll have to raise the wages or close down.

This actually happened in Calgary, Canada a few years back. McDonald's was paying 50-100% more than minimum wage in order to attract employees. Stores actually closed on Sunday because they couldn't find staff.

> redistributing wealth from the landlord class to the tenant class

This may be true, but SF rental property values are extremely high, indicating investors are more than willing to make long-term bets on the value of rent-controlled units.

In practice areas with rent control have higher rents than those without it. So I don't really see how this argument could at all be valid.

Part of the problem is that when rents are raised in a predatory fashion, the purchasing power of the renter is diminished.

  Homeownership rate, 2006-2010 in SF County = 37.5%	
  Homeownership rate, 2006-2010 in California = 57.4%

  Median value of owner-occupied units, SF 2010 = $785,200  (2000 = $396,400)	
  Median value of owner-occupied units, California 2010 = $458,500  (2000 = $211,500)

Sources: http://quickfacts.census.gov/qfd/states/06/06075.html / http://www.infoplease.com/us/census/data/california/san-fran...

Rent control and rent stabilization aren't about low rent; they are about preventing landlords from enacting unreasonable increases in rent that are related to housing booms and bubbles. Renters really should be immune from the mortgage / interest rate speculation that drives housing booms and bubbles. Instead, the supply of renters is essentially leeched of its ability to invest its capital in housing for the long-term.

The topic comes up here so frequently; it's really astonishing how few people understand it.

Why should renters be "immune" from the fact that the property they occupy is suddenly worth a lot more? This is the gamble you take when you choose to rent rather than buy.

Besides, price booms are the natural result of demand outstripping supply. If rents don't go up to reflect this fact, then how do you cope with the fact that the number of people who want to live in San Francisco outstrips the number of people who can fit into San Francisco?

Would you apply the same logic to cars? If you happen to own a car that suddenly became desirable, should the gov't step in and prevent you from getting the best price for it?

How about if you own a start-up? Was Instagram guilty of "predator" pricing when Facebook bought them?

What people don't seem to understand is that in a free-market system, there is no free lunch. Look at the rental market in SF. People pay "key money" to secure a place. Or the landlord rents to their friend, not the best tenant because if he can't get fair market value in terms of a rental rate, he'll get it someway else (and buyers will pay, because they value it the same way).

SF prohibiting any dense housing from being built anywhere in the city

SF would love to give out more building permits than it actually does. The problem is that existing property owners and tenants bewail any attempt at building upwards and the permitting process is so process-heavy (environmental review, public comment periods etc.) that getting anything actually done turns into a major political battle. Forgive me for saying so, but if not for the loss of life and livelihood the best thing that could happen the city right now would be a medium-size earthquake. It's so dysfunctional as to have affected my political views.

That's a huge increase, but actually follows overall San Francisco rental trends. HotPads recently looked at rental trends YoY and found SF rent is up 20%. It's also the most expensive city to rent in the U.S. (a two bedroom in SF is 23% more expensive than the same size in NYC).

Data here: http://hotpads.com/pages/housing-report-2012-6.htm

"The real problem is SF prohibiting any dense housing from being built anywhere in the city"

Huh? In most of SF the houses are about 1 inch from each other. It must have the densest housing on the west coast.

I suspect it's referring to per-volume density, not per-area density.

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