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Comment by RandallBrown | Hacker News Reader

What is the solution to this problem? You can stop rent increases with a law, but that causes lots of other problems.

You can get rid of the buses with a law, but then people will just drive or use other transportation, which causes traffic problems.

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The real culprit here is draconian zoning laws which are drastically limiting the economic potential of this country and leaving millions of people unemployed or underemployed: http://www.amazon.com/The-Rent-Damn-High-ebook/dp/B0078XGJXO

If you were to remove many of the laws restricting redevelopment and the construction of tall buildings, everyone would benefit - property owners, property developers, tenants, local stores, rich people, poor people, the government, etc.

Some decent urban planning would help as well. For one thing, SF's public transit is poor, it has too many cars, and its bike infrastructure is poor. It should take 15 minutes to get from the Sunset to SoMA by subway, but it takes an hour by antiquated streetcar. And if you try to bike it, you're constantly stopping at lights and sharing streets with cars, instead of on a proper bikeway. Compare Copenhagen for an example of how to do it better.

Also, some more integrated policies would help; the ridiculous fragmentation of municipal governments and transit districts doesn't improve the situation. Why are BART, Muni, Caltrain, AC Transit, and the VTA run in such an uncoordinated manner? Why doesn't BART go down the peninsula? Why are there miles of light rail in the middle of nowhere in Santa Clara County, but not in more dense areas? Why is there no higher-density housing near the Caltrain stations in places like Palo Alto?

The root of the problem is the tension of interests between the landlords who gain from an increase in property values, even if it prices out current residents, and the residents who have perverse incentives to make their area a worse place to live to keep out the yuppies.

Maybe you could securitize the value of the tenant's rent control, entitling an exiting tenant to a windfall if they are replaced by a higher-rent paying replacement? This would be on the theory that residential property values are an externality created by the people living there.

Maybe you could securitize the value of the tenant's rent control, entitling an exiting tenant to a windfall if they are replaced by a higher-rent paying replacement?

Can you clarify how this is different from simply prohibiting rental, forcing residents to own their apartment? A securitized right to property value increases sounds a lot like equity.

edit: Oh I'm stupid. Clearly you mean all of this under price control: the renter gets the benefits of equity, without paying anything for them, and without taking on any risk of ownership (like property values collapsing). A complete soup of misincentives and disaster.

"Securitize" was the wrong word for me to use, as no uninvolved third party is coming into the picture.

The difference between owning and renting is already a matter of degrees, particularly once you add rent control, mortgages, condos and HOAs into the mix. The renter already has the right to deprive the owner of the property value increase, this is just creating a legal framework to give it back for cash. I'm imagining it would only be part of the value of increase in rent over the rent-control limit, not all of it.

It would increase market price rents modestly, as you're essentially depriving landlords of the power to shake off bad tenants by finding rent control loopholes or waiting them out, but you could offset that by creating a process for voluntary tenant buyouts.

Buyouts are currently very difficult to carry out legally even if the tenant wants to leave and the landlord would rather replace them with someone paying more, leaving the two parties stuck together in an unhappy marriage as an unintended side effect of the way the laws work.

In response to your edit: Of course you'd pay for them, new rentals are market-priced (then locked into rent control until that tenant leaves), aren't they? It's got one-sided risk like any option but those aren't hard to price. It's in everyone's interest to increase the future value of the rental unit.

In that case (owners raising prices), who would want this? To renters it has the character of investment: pay more money today, for a possible payout in the future. I don't think typical renters want this. They're renting in part because they opt not to invest in real estate. They choose not to shift costs to the present.

I think the word you are looking for here is "tax". Currently rising property values are created by the people who live and work in the city, but the value itself is captured by incumbent landowners who largely live outside the city and haven't had their property tax assessments adjusted in over 30 years. Taxing rent fixes this problem and erases the stupidity of Prop 13.

What is the "problem" that you want solved?

Massive rent increases, the bad aspects of gentrification. Rent in some places is doubling in a year. http://uptownalmanac.com/2012/05/rental-prices-wwaayy-every-...

Rent increases are terrible for renters (and I rent), but great for homeowners (in that they generally track rising real-estate values.) It's mostly just a matter of perspective.

Nobody seems to complain that the housing market in SF is on fire for the same reasons that rents are up.

It's not just SF... a lot of people complain about the Bay Area housing market in general - just not the sellers.

Even if you can afford to buy a house, it's damn near impossible to find one because sellers are getting many offers on the first day/week (a lot of which are in cash). And a lot of these offers aren't from homeowners, but rather investment companies. There was a good article in the SJ Mercury News last month about it [1]. Even if you want a house (and can afford one), the market just doesn't have enough supply, so people are then stuck renting. It really is a pretty big problem.

[1] http://www.mercurynews.com/business/ci_22930687/bay-areas-av...

It's probably because homeowners are (almost always) voters in a district, whereas potential home buyers probably aren't, and renters are somewhat less likely to be than homeowners. You'd expect policies designed to keep homeowners happy.

Unlike many people in this thread, I loved living and working in San Francisco.

And I live on the other side of the world, where house prices are too high, it causes massive problems, and nobody complains about it.

In fact prices in my suburb are about twice what they seem to be in parts of SF where it is quite safe to live:

http://www.zillow.com/homedetails/720-722-34th-Ave-San-Franc...

Here a big fall in house prices is seen as a risk rather than a good thing.

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