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Comment by michaelochurch | Hacker News Reader

Rent control drives rents up for the people who aren't part of the program. Because real estate is so price-inelastic and market rents go up by a much larger percentage than is affected by the rent control, landlords as a group actually make more money under RC. The landlords who own RC apartments may lose in the deal, but landlords whose apartments aren't affected end up winning.

Purchase prices of 40+ years' rent signify a mix of speculation, regulatory corruption, trophy buying, and weird beta effects (i.e. amplified correlations with the national market). For example, Manhattan real estate has a beta of about 3.0, which means that a 50% swell in national prices drive Manhattan real estate up by 3.375x.

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It is very complicated, and I'm not suggesting that rent control is good. I'm just saying there is a difference between buying a house in the bay area vs living in the bay area. Right now, the former is insanely expensive, whereas in some situations the latter is not. The article I linked does a great job of explaining the history and various problems and tradeoffs.

I don't know what you're talking about. Renting here is insanely expensive. I pay $1500 for a tiny room in the tenderloin, subletting from a friend who is paying $2900 for the place. It's a small two bedroom with no common space; just two rooms, a small kitchen and a small full bath. Studios in this neighborhood start around $2200.

When I live in São Paulo, Brazil (which isn't exactly cheap and going out can be as expensive if not more expensive than San Francisco), my dad and I split the rent on a 2700 ft^2 penthouse duplex with 4 bedrooms, 3.5 baths, deck with barbecue pit, dining room, living room, family room. It was one block from Avenida Paulista on Alemeda Campinas. We each paid around $1300 to cover rent and the building fees.

San Francisco is stupidly expensive. The landlord trolls sue to block every single possible development that could alleviate the housing problems because it allows them to earn increasingly more from their real estate with little to no additional capital investment.

San Francisco rents are bad. San Francisco purchase prices are balls-out disgusting: 30 to 50 years' worth of rent. Typical in the US is 15, and that's only because of the mortgage interest tax credit (which drives purchase prices about 30-50% higher than they otherwise should be).

Buying at current levels would only make economic sense if you expected rents to keep going up. Right now, buying is a bad move unless you expect the extreme rent situation to worsen (rather than mean reverting) in the long term (20-30 years). Given that it'd take just one genuine progressive mayor to crush the NIMBYs and allow new development, I think that that's a bad bet.

> Given that it'd take just one genuine progressive mayor to crush the NIMBYs and allow new development

Well, in an alternate reality where the City and County of San Francisco is a mayoral dictatorship (and using a suitably special definition of "progressive", though that's somewhat tangential) this might be true.

Of course, in that alternate reality, you'd still need the mayor with that preference to somehow get elected in San Francisco, which might require even a bigger divergence from the universe we live in than San Francisco having the kind of political structure which would empower a mayor alone to impose the changes you describe.

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