Comment by DanBlake | Hacker News Reader

Comment by DanBlake | Hacker News Reader

There is a interesting anti-correlation between this and Prop G.

Prop G will be a retroactive tax applied to anyone who bought a multi unit building in SF in the last few years who would sell it the next few years. Tenants have no problem pushing this bill stating that buying a building does not entitle you to a lifelong contract and that 'things can change' which will negatively effect you. So even though you bought a building a year ago with no hint it could be taxed at 25%, you are now expected to pay that tax if you sell.

Now, on the other hand we have tenants who are upset that they have to leave their homes they (wrongly) assumed they could rent in forever. Either this is from ellis, OMI or other eviction. I feel for these people to a extent- But I am not a believer in the whole "right to stay in your birth city forever" movement. I do not believe anyone has any more of a right to live in San Francisco than they do Malibu or Aspen. It is one of the most expensive metros in the US.

If you are a 90 year old grandmother who was counting on your landlord not evicting the whole building, you should have known that was a risky bet to begin with. If you want to stay in a place forever you should buy the home. Otherwise, you need to be prepared to move should situations change. You need to prepare for all 'disasters' - That could be eviction, fire, death, floods, etc.. If you dont prepare, I will be sorry for you- But I dont think that entitles legal protection either. If you lose your house from a fire with no insurance, you are going to bare that burden alone.

As a non american looking at this from the outside this whole rental/tenant control looks like legislated communism.

As opposed to what other sort of communism?

Also, note that "Prop G" is more or less the opposite of legislative, it's a ballot initiative, direct democracy.

> Also, note that "Prop G" is more or less the opposite of legislative

Legislative = law making. Prop G is more or less exactly legislative.

> it's a ballot initiative, direct democracy.

Yes, its a ballot initiative, which is a direct form of citizen exercise of legislative power (expressly, along with the power of referendum, reserved by the people in the otherwise-general assignment of legislative power to the State Legislature in Art. 4, Sec. 1 of the California State Constitution.)

I think I did okay understanding how the other poster was using the word, they were talking about a government assembly making laws, not about law making in general (why would anybody bother saying "law making communism" vs "communism"?).

If one is using "communism" as in actual Communist theory, then "government-assembly-directed-communism" doesn't make sense either -- that's, in that framework, socialism, communism is what you get after the state withers away.

If you are using "communism" in the usual sense anti-Communist speakers due -- referring to government structure typical of authoritarian regimes that have espouse Communism as an ideology -- then distinguishing "government-assembly-directed communism" vs. "communism" still doesn't make sense, as all such "communism" is, necessarily, directed by a government assembly.

So I don't think "legislative communism" makes much sense in any case.

Your last sentence was more or less my point, I just screwed it up with "more or less the opposite of legislative", which I admit is confused, but I was trying to say that the Prop wasn't being handed down by the government.

Three wolves and sheep voting on what's for dinner is also a direct democracy. Just saying ...

There's no endorsement of direct democracy in my post.

The reason for the double standard is obvious though: no once cares about rich people's problems. I say that slightly tongue-in-cheek, but there's a legitimate social problem here. Rents in SF could not grow so out of control without the income disparities also growing. Of course a city is not a closed population, so a good portion of the problem comes from rich people disproportionately moving to San Francisco, but even with that it's clear that on a national level income inequality is increasing in a very de-stabilizing way and SF is a microcosm of those dynamics.

Unlike previous economic booms of the 19th and 20th centuries, there is no mediating factors such as a massive need for human labor or a common cultural belief among the mega-wealthy in a moral duty towards philanthropy, or even just simple taxation. Automation is getting so sophisticated that these days a lot of productivity gains come from deploying capital to automate things (software being a part of this), and not only do all the gains accrue to the capital holders, but the gains are taxed much less than regular income.

So the deck is stacked heavily in favor of people coming in and flipping SF property for massive profits simply by virtue of holding the capital to be able to do so. The fact that they get one unannounced tax curveball thrown their way is not someone that remotely compares to someone choosing a profession and working their whole life only to find that rents quadrupled in a 5-year period. The answer is not "sorry buddy, you should have been a banker or a computer programmer, but I hear Modesto is still pretty reasonable"; there aren't enough such jobs to maintain a middle class that way.

>> there is no mediating factors such as a massive need for human labor or a common cultural belief among the mega-wealthy in a moral duty towards philanthropy, or even just simple taxation

Are you saying earnings in SF aren't taxed at usual CA rates, being highest in the nation? How could I get on this wonderful deal?

Also, I recently been to some places featuring walls and booklets listing people donating tens and thousands of hundreds of dollars to construction and maintenance of said places. If what you're saying is true, either these people aren't rich (and I wonder what "rich" means in your book then) or they did it of of some sinister motive which I'd like to ask you to explain to me.

>> a lot of productivity gains come from deploying capital to automate things (software being a part of this)

Despite popular belief, software doesn't write itself automatically. There are still some meatbags around clicking on those keys. Of course, you can automate manufacturing - but there's no significant manufacturing in Bay Area to automate anyway, and automation of services is still largely a dream.

>> So the deck is stacked heavily in favor of people coming in and flipping SF property

Last time I remember people trying to come and make living exclusively by flipping property without doing anything else ended up in what is called now Great Recession. I'm not sure that event can be treated as "stacked heavily in favor" of most of those who participated in the flipping. Of course, on higher levels (national-level banks) there were other games, but those didn't do property flipping.

>>> only to find that rents quadrupled in a 5-year period

If you tolerated quadrupling rents for 5 years, you're part of the problem - you're the one allowing to charge quadruple rents by paying it. 5 years is enough time to find other options. In fact, in 5 years you can learn a new language and move to a new country, not just find a job in the next city.

>>> there aren't enough such jobs to maintain a middle class that way.

But from this article we see there's no such jobs in SF either, it's just in Modesto if you're out of a job, your savings last you 3 years of rent, in SF they last you 3 months.

> Last time I remember people trying to come and make living exclusively by flipping property without doing anything else ended up in what is called now Great Recession.

Which was bad for lots of people, but not principally the people actually doing the flipping (some of them may have gotten caught in a bad position with two much sunk in inventory at the wrong time when the market crashed, but, generally -- OTOH, lots of people interested in flipping picked up property at discount prices due to the crash, too.)

Meh. The newer landlords will realize what the rest of us have know for years. You'd be crazy to be a landlord in SF.

Which, of course, is part of the problem.

Which is why massive new rental buildings are coming up? NEMA, One Rincon Hill Tower Two, etc.

Sure, eventually you get an equilibrium. Because nobody else wants to be a landlord you can charge so much that it's worth the aggravation. I wonder how many of these new units would be needed if people were more willing to rent out unoccupied units.

The problem isn't as acute for big companies. If you have 1000 renters you have a staff to deal with problem tenants. You have lawyers on retainer. You expect some number of tenants won't be paying rent at a given time, so you charge everyone else enough that you still make money.

The people who get screwed are the duplex and fourplex owners who wanted to use rental income to supplement their retirement.

Reminds me of that Yogi Berra quote "Nobody goes there anymore. It's too crowded."

So you're expecting rents to go down?

Rent control does not apply to new construction :)

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