Los Angeles limits rent hikes in historic vote | Hacker News Reader

Los Angeles limits rent hikes in historic vote

politico.com

26 pointsmhb24 comments

Allow people to build more housing. It's simple. These rules will help current renters at the expense of future Los Angelenos, make building more housing less desirable for developers, and will let local politicians pretend they solved the issue while actually doing the exact opposite.

Mostly nobody is against building more housing. The big issues, especially in California, are the Water supply issues. The cities largely run at capacity and the water system can't really handle the increased load. Then you have traffic and other safety concerns like electricity. It's not as simple as building more houses, it's a long road of improving infrastructure. I used to date a housing advocate who attended city hall hearings for a non profit, and no one objected, it would always get to close to being approved, then the water guy comes in and they can't do it.

Roughly 80% of developed water use in SoCal is agriculture. Population is a secondary concern when it comes to water use in the area. Severance of riparian rights through eminent domain is looking increasingly appealing.

Most people are for more housing somewhere else or with so many caveats that they are effectively against it.

Do we have specific numbers how much water costs and why? In a new place?

Most people have no number sense. E.g. the Brian Williams on-air segment where he (and apparently his presumably college-educated staff) thought a $500 million campaign investment by Bloomberg meant he could give every American $1 million. That's not just a simple math error--it's a fundamental lack of numerical intuition about society-scale numbers. Prices are even more complex--a dynamic equilibrium between supply and demand. You can't get people to understand that. You might as well expect them to do jumping jacks while standing on their hands.

You can't lecture people about supply and demand. What you need is an electorate that has correctly aligned gut feelings. You need to socialize people from birth to understand that "if you build more, you'll get more; if you build less, you'll get less." You know how your dad says "there's no such thing as a free lunch?" You need to socialize people at that level.

And this exact play has been run so many times, with the same bad results every single time. My only "hope" would be they would pair this limit with such aggressive housing increases that the overall practical effect of this is mitigated.

> Under the new rules, Los Angeles landlords whose buildings are covered by the city’s rent stabilization laws — about three-quarters of the market — will be allowed to increase rents by between just 1% and 4% each year, depending on inflation. Currently, landlords are allowed to increase rent between 3% and 8% annually.

Isn’t this just going to pass costs from existing tenants to future tenants who will be given much higher up-front rents?

> Additionally, the study showed that landlord expenses were increasing, in large part because of rising insurance costs and the need to make repairs and upgrades. With few exceptions, the most recent rent stabilized properties are nearly 50 years old and half of them were constructed before 1950.

> Citing a need for landlords to invest in their buildings, the city housing department recommended to the council that it change the limits on rent increases to a maximum 5% annual jump with a floor of 2%, depending on inflation.

There is going to be a lot of deferred repair work. I wonder how many of these will turn into safety issues. What happens if a landlord cannot economically repair some issue they’re required to fix? If they’re caught between rent increase caps and regulations requiring fixes, do they just risk having their property seized?

> But councilmembers whittled down those numbers last week in its Housing and Homelessness Committee, which Raman chairs. Her committee pushed forward a more aggressive plan that would have banned increases altogether if inflation was low enough and capped the hikes at no more than 3%.

To me, it’s insane to even consider banning rent increases altogether. I am surprised this was seriously discussed.

The popularity of rent control shocks me a bit. Even left leaning economists like Galbraith and Krugman think it is a bad idea, but it's hard to convince the public of it.

I don't know to what extents markets are broken down or that people don't believe in them. Maybe people don't think it matters if people want to build new housing because NIMBYs won't let them anyway. I think people don't believe that building new housing lowers prices because so often when a new development is built you see big billboard and newspaper ads with an eye-popping price that you can't ignore. Maybe you are a landlord and you're renting a place out for $800 a month and you see something not much better at $2200 a month and think "Maybe I'd better raise the rent".

I feel like a lot of our broken political ideas basically come down to too many layers of bad policies and regulations such that the only ideas you see are the art of the possible. I think Newsom does believe in abundance, build build build, but it takes dismantling regulations on state and local levels one at a time, and so it becomes politically popular for the LA city council to do what it can in the short term.

What's definitely not popular is the prospect of retired old ladies getting 50%+ rent increases. That's absolutely what happened over the pandemic in the Maritime provinces where there was no rent control at all when they suddenly became popular places to move to.

People like stability. They can adapt to higher prices, but they need time to adapt to higher prices. That is the point of rent control. It is a system to smooth out volatility. It trains landlords to consistently increase prices and trains tenants to prepare for (small) increased prices.

It's straightforward imho. Rent controls help people today, where they rent and live today. Supply cannot grow fast enough, nor forever, to keep prices within an affordable band in some situations. Does this mean newcomers will not get rent control benefits? Yes, but they are not stakeholders today; the people who live there today are. Otherwise, landlords can perpetually raise rents faster than wage growth, or even worse, what those on fixed incomes can afford. Broadly speaking, there is no right to profit, and I'm confident you can find a majority who would support affordable housing as a right in most major urban areas.

With immigration inflows slowing, this should alleviate housing demand in some areas, taking pressure off some markets. It's also helpful that there was regulatory action against algorithm driven price collusion and rent increases such as RealPage.

> I don't know to what extents markets are broken down or that people don't believe in them.

Perhaps enough that both NYC and Seattle have recently elected Democratic Socialists as mayors, and Los Angeles is restricting rent increases. "A recent survey by the Cato Institute and YouGov paints a troubling picture: 62 percent of Americans aged 18–29 say they hold a “favorable view” of socialism, and 34 percent say the same of communism."

Citations:

https://www.bloomberg.com/news/articles/2025-11-17/internati... | https://archive.today/GmuD8

https://www.pewresearch.org/short-reads/2025/08/21/key-findi...

https://www.bloomberg.com/features/how-immigration-affects-u... | https://archive.today/bHGiG

https://www.bloomberg.com/news/articles/2024-12-19/immigrati... | https://archive.today/b5sI8

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

https://www.cato.org/blog/81-say-they-cant-afford-pay-higher...

> Supply cannot grow fast enough, nor forever, to keep prices within an affordable band in some situations.

The risk of rent control is that it slows the growth of supply, or even contracts the supply. There is no right to profit, but there's also no obligation to build more housing or to continue renting it (rather than tearing it down for a parking lot with lower risk and better returns for example).

That's why some consider rent controls a bad idea. It stabilizes the current pricing, at the cost of potentially making the problem much worse in the future. Not even just for newcomers, it can disincentivize landlords doing repairs and make moving out impossible for current residents.

It probably also incentivizes anti-patterns like having tenants pay for electricity and refusing to make efficiency upgrades. If the landlord won't recoup the investment for high efficiency windows, just leave the 60 year old ones in there and make electricity costs the tenant's problem.

Governments can issue muni bonds to build housing if private developers will not or cannot, and use eminent domain to acquire rental real estate not being maintained to living standards codified in statue.

I personally think the Vienna model is ideal.

https://www.newstatesman.com/spotlight/economic-growth/regio...

> Governments can issue muni bonds to build housing if private developers will not or cannot, and use eminent domain to acquire rental real estate not being maintained to living standards codified in statue.

With what money? LA was recently downgraded [1] and adding poor people who need social care harms not helps the city budget.

[1] https://www.latimes.com/california/story/2025-04-26/city-of-...

This whole “stakeholders today” mentality also applies to the homeownership ladder. In that sense, it seems somewhat fair for renters to get a little piece of that pie despite being unable to purchase a house, even if neither system makes a whole lot of sense.

Homeowners who bought a house before 2022 are in the exact same boat as a renter blessed with a rent controlled unit. As long as they don’t move again, they’ll enjoy housing costs that are well below current market rates with their 3% fixed mortgage rate and rapidly appreciating values.

I don’t really think rent control is optimal policy and I simultaneously find it interesting that people who are bought in on the 30 year fixed rate mortgage system are against the idea of rent control when they effectively get the exact same benefits, more benefits in fact since they can transfer partial equity and effectively stay on top of housing inflation just by entering the system early.

Regarding communism and socialism, I think these ideas become popular as the working class gets squeezed so hard that it becomes clear that capitalism won’t give them a better outcome than even the worst case scenario of “everyone is poor” soviet style communism. Even the worst communist regimes managed to at least provide and guarantee basic housing.

Capitalists who want to avoid socialism/communism should do more to make sure the working class has good conditions, because one possible alternative is that a government enters power that abolishes the concept of private property.

(I also don’t mean to criticize on well-implemented socialist policies. For example, I think Mamdani’s free bus program makes a lot of logical sense and is backed up by an extremely successful pilot project. I don’t think the rent control policies make quite as much sense and serve as more of a band-aid and a method to attempt to equalize the playing field against people who own single family homes who are given wildly preferential treatment by the US government and its financial systems).

Strongly agree with all points. To your point about 30 year fixed rate mortgages vs rent control, we can already see what happens when stakeholders have fixed housing costs via New England. They stay put, and not enough housing is built for new people to move there (Maine and Vermont especially). We seem to be okay with this though, because they are mortgages and properties owned by individuals, instead of rent control across an urban area constraining landlord profits. We simply accept that new workers cannot move to these areas, and that new affordable housing for new workers will not be built, but rent control is verboten.

Deaths already outnumber births in 21 US states, and this will increase over time due to rapid fertility rate declines. Immigration tolerance as an input is the sticking point imho, as there will always be demand to live in major urban areas, and we're really just arguing who gets to live there. Are we at peak housing demand as China and Japan once were? Probably not yet, but we're likely within spitting distance. The faster the fertility rate declines, the faster we get to peak housing demand.

https://www.newsweek.com/map-shows-21-states-where-deaths-no...

https://www.bostonfed.org/news-and-events/news/2024/12/nowhe...

https://news.ycombinator.com/item?id=45883901 (additional citations)

> there will always be demand to live in major urban areas

Isn't that the detail where the devil is? There's plenty of land in Maine and Vermont. Check out the house prices in Presque Isle. But Burlington has many amenities and a very pleasant quality of life so it's expensive. Price is the way we resolve who gets to live there. So far, no one has a better way.

> To me, it’s insane to even consider banning rent increases altogether. I am surprised this was seriously discussed.

* For one:

People who vote for this may very well agree with you, but as always, even when you see that something would be good overall you yourself may be forced into contradicting behavior.

Examples for this are all over. You may know that lining up on an exit is best overall, but with everybody charging you will be forced to join the herd. You may know and agree that ricing prices (rents) should lead to more construction, but if you decide only based on your own situation, your choice is volunteering to pay more when you could vote the opposite and have an advantage.

I think it is unwise to blame people, our entire system is based on, and forces people into selfish behavior even when they know it.

* But also:

The idea that higher prices (rents) should lead to more construction is based on the premise that there is a functioning market based mostly on price alone. But for housing that is usually far from the truth, and rising prices may not lead to significantly more construction at all. Instead, higher prices may just be absorbed by various parties (not necessarily the house owners alone). Land ownership has rarely been much of a free market, especially not in places that are popular (can make a land owner lots of money).

In this case, letting the prices fluctuate just means more pain for renters without the gain (of more construction and then lower rents).

>The idea that higher prices (rents) should lead to more construction is based on the premise that there is a functioning market based mostly on price alone.

It's also just very very wrong in most places.

The "development" companies in my area already own all the housing stock. Why would they spend any money on new builds when they can reliably keep ticking the rent cost up 7% YoY forever? It doesn't matter how high demand gets, nobody else can build because if you try to invest in a new development, they can just temporarily drop rents and wipe out any ROI you might have hoped for and ensure you fail and then buy up your property. Like, this stuff is literally how city real estate has always worked.

Instead, rent stabilization ensures that they can't dump the market like that to kill new entrants, so it encourages people to invest in building.

Meanwhile, people like my dad who are also technically "builders" are busy serving the far far far more profitable "We moved here with a billion dollars from SV and have no idea how money works so we don't notice your 100% profit margin" market, and no average people can ever compete with that. Builders want to make the highest profit they can, and that does not come from commodity housing in the city. It comes from catering and pandering to rich 2nd gen assholes who think they are gods gift to the world and can't tell the difference between quality and expensive. These people will continue to insist the free market would fix this and blame city regulations and zoning that they don't even know, because at no point have they even pretended or thought about building housing for the city. There's not enough profit in it.

I am surprised that rent increases aren't banned everywhere, and that things like Prop 13 haven't been voted in elsewhere outside of California. Because the fundamental proposition of "I reap handsome benefits, but some unnamed future newcomers to my country/state/city will have it tough" appears to be quite irresistible.

Other states don't have California's direct democracy proposition process that allows any bill to get a vote, provided you have enough signatures. There are some terrible laws that get on the ballot in California, and some get passed.

California at this time also had a famously conservative governor (Reagan) who would be in support of the proposition. Governments aren't usually in favor of passing laws that would slash its own budget and lead to massive cuts in jobs and services.

Use Google to find what happens when the government introduces price controls.

> To me, it’s insane to even consider banning rent increases altogether. I am surprised this was seriously discussed.

My guess is if you look at the incentives of the people making the decisions, it’s completely rational. Maybe we as a society should change the incentives.

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