Build more houses. None of this shit would happen if SF would just build more houses.
Edit: source: http://www.quora.com/What-percentage-of-San-Francisco-apartm...
Owners can apparently force renters to bleed ever more money, but renters can't force a squatting owner to sell, they just have to accept it or, as this letter exemplifies, GTFO.
If you offer to pay at least as much for the building as the landlord would expect to make from renting it out then any rational landlord will sell you the building.
> Owners can apparently force renters to bleed ever more money
If they raise the rent significantly above what typical apartments go for in the area then the tenant will move out and they'll have to spend money to find a new tenant and go without rent in the meantime.
Rental housing is one of the most efficient markets in existence. Landlords have nothing to gain by gouging tenants who will only move across the street to keep paying what they are now, which is why that rarely if ever happens. But when the local market price of housing changes, adjusting rents to meet the market is completely reasonable and natural.
That's a large assumption.
>If you offer to pay at least as much for the building as the landlord would expect to make from renting it out
Over what time period?
>Landlords have nothing to gain by gouging tenants who will only move across the street to keep paying what they are now,
Where in SF is that possible? Do you know of any documented cases?
>is completely reasonable and natural.
Exactly the justification used for so many horrors.
IME (London) what typically happens is you get a bit gouged for rent when you first move in to a place, then, as the landlord gains trust in you as a tenant, the rent is "sticky" - it doesn't go up very quickly. You can use the risk of a new tenant as a negotiation lever to keep rent down.
Which rational tenant would pay the same amount he'd pay as rent to buy the property, when that incurs additional costs (property tax, for example)?
Case in point. In 1998 (At about the height of the Dot Com bubble) a one-bedroom apartment in my building rented out for ~$500/month. In 2010 (While the real-estate market was still recovering from its enormous collapse) that same apartment rented out for ~$1500/month.
That's a 3X increase in "market price" of a good from the height of a superheated bubble to shortly after the collapse of another one.
SF's rental market is seriously fucked by undersupply.
That's what an efficient market is supposed to do. The high price then encourages the construction of more housing.
There isn't enough supply because of rent control and other regulations that discourage or outright prohibit the construction of new or higher density housing. The market is doing exactly what an efficient market is supposed to do under those conditions: Increase the price until demand at that price no longer exceeds the artificially constrained supply.
Restrictions on new construction (both legal and social) are the source of the undersupply in the city.
Do you live in SF? If you did, you would know that in the few new residential buildings that have been constructed, rents are somewhere between $3000 and $4000 per bedroom. What developer could possibly refuse that income? Do you think that rent control is driving rents in newly construction apartments that high? Likewise, do you think that -with rental rates like that- developers are failing to build new stock because of existing rent controlled stock in SF?
As an aside, if you didn't know how rent control works in SF, here's a quick intro. Buildings built before 1979 and rented as residential housing are covered by rent control. No other buildings -unless (as is happening in Trinity Place on Market Street) the landlord enters into a special agreement with his tenants- are covered by rent control. This means that new construction is NOT covered by rent control.
Because new construction is not covered by the rent control ordinances, in a market with extreme undersupply, like SF's, there is no economic reason for a developer not to build new housing stock.
Have you been enlightened? :)
It's a contributing factor.
> Because new construction is not covered by the rent control ordinances, in a market with extreme undersupply, like SF's, there is no economic reason for a developer not to build new housing stock.
That isn't entirely true. A developer has to build new housing stock somewhere. In a developed area that commonly means demolishing old low density housing to build new higher density housing. But if the low density housing has tenants that won't leave because they're paying below market rents, developers can't do that.
Rent control also contributes to high rents in another way: No matter how constrained supply becomes, tenants in rent controlled apartments don't feel any pressure to free up supply by moving somewhere else. Those units are effectively off the market, which requires new tenants to pay that much more to get one of the remaining units.
Rent control is usually pushed by ruthless politicians to buy votes and end up being catastrophic for the cities victim of such policies.
The irony is, they would probably profit even more, if they allowed the city to grow naturally. New York City had a population of 800k (like San Francisco has now) some time in the 1850's. Do you think a piece of land in NYC would be more valuable now, if they had decided to stop the city's population to 800k back then?
Thing, is, even folks in rent controlled units have major life events. You get tired of the person you're living with, get sick of the changing neighborhood, have a baby, or a new Significant Other. In a city that has such an extreme lack of housing, changing your living arrangement to reflect your changing life is somewhere between extremely difficult and impossible.
Folks who are preventing new development aren't folks that are motivated by a desire to protect their rent controlled apartments. They're folks who are motivated by a desire to see greatly increased year-over-year rents on their non-rent-controlled units, greatly increased year-over-year leverage on their existing property, and/or the continued preservation of the look and feel of the neighborhood (read: those with a strong resistance to change.).
http://www.paloaltoonline.com/news/2014/07/10/growth-debate-...
Source: http://m.sfexaminer.com/sanfrancisco/leveling-sf-housing-fie...
We just have acres of open land here... derp.