No seriously, Rent Control does more harm than good

Ether_Snake · Jan 18, 2018

Yeah it incentivizes goverments to keep housing construction constrained as well.

I can't say it enough we need to build more housing and invest in rapid and accessible transportation, the later helping to smoothen development more uniformly and hence smoothen cost distribution as well, which favors a more uniform distribution of business operations as well. You need density, but a good combination of residential and commercial buildings, not concentrate everything in the core.

Of course you have the left and right both complaining about increasing density; one complains about gentrification in the city-center's periphery, the other complains about wanting to keep their neighborhood full of yards, pools, two-cars per house, and white people further away.

Dekuman · Jan 18, 2018

Price controls do not work.

https://en.m.wikipedia.org/wiki/Edict_on_Maximum_Prices?wprov=sfla1

SugarNoodles · Jan 18, 2018

PanickyFool said:
Building more housing...

http://www.law.nyu.edu/sites/default/files/Been Ellen O'Regan supply_affordability_Oct 26 revision.pdf

That seems like a pretty time machine oriented solution for things that literally ruin peoples lives....

Oneiros · Jan 18, 2018

badcrumble said:
-Martin Shkreli

That's why I said "usually".

PanickyFool · Jan 18, 2018

SugarNoodles said:
That seems like a pretty time machine oriented solution for things that literally ruin peoples lives....

Yes, 50 years (last major era of zoning reform) of people saying build nothing anywhere would cause this issue... But as is shown in San Fransisco implementing mass rent control falls miserably and benefits the politically connected few over the majority.

AaronB · Jan 18, 2018

ANY kind of artificial government limits or controls on prices or wages have been proven over and over to not work.

SugarNoodles · Jan 18, 2018

PanickyFool said:
Yes, 50 years (last major era of zoning reform) of people saying build nothing anywhere would cause this issue... But as is shown in San Fransisco implementing mass rent control falls miserably and benefits the politically connected few over the majority.

Okay, but it also protects people who literally would have to uproot their entire lives or become homeless without it... am I wrong?

Kirblar · Jan 18, 2018

SugarNoodles said:
That seems like a pretty time machine oriented solution for things that literally ruin peoples lives....

If you have a disease for 5 years and could cure it with medicine 5 years ago, and can still cure it today if you start taking it, that doesn't require a time machine to fix, it requires you to start taking steps to actually fix the issue.

Mammoth Jones · Jan 18, 2018

I mean I'm biased by dealing with rent control would be fine if folks would just pay their rent. But then they don't and it goes to arbitration and the judge sets up a payment plan which isn't followed and now we're back at arbitration. In the meantime it's know that's money not coming back and you're basically subsidizing someone else's cost of living on a 1:1 level. Not society as a whole but that landlord.

I guess that's another issue but also rent control is fine if it keeps the prices realistic to market. If it costs the landlord "X" on the mortgage then depending on other costs and property value and taxes rent needs to be "Y" just to not take a loss. And let's not forget it's not a charity. But at the same time so many greedy scumfuckers that don't fix shit and try ridiculous rent increases which are basically a means to say "Get out".

Mr.Mike · Jan 18, 2018

SugarNoodles said:
Okay, but it also protects people who literally would have to uproot their entire lives or become homeless without it... am I wrong?

Yes, from the article

But not all renters benefitted equally. The new policy created a powerful incentive for landlords either to convert rental units into condominiums or to demolish old buildings and build new ones. Either course forced existing tenants — especially younger renters — to move. Landlords affected by the new 1995 policy tended to reduce rental-unit supply by 15 percent.

Casual · Jan 18, 2018

Aaron Stack said:
I plan on owning a house and yet I'm not ever gonna be against something that helps humanity at the expense of one piece of investment.

I mean, that's great. But most people are not in a position where they can afford to look out for humanity before themselves and their family.

A home isn't just "one piece of investment", for many people that's their primary investment.

Mammoth Jones · Jan 18, 2018

Aaron Stack said:
I plan on owning a house and yet I'm not ever gonna be against something that helps humanity at the expense of one piece of investment.

Ok so buy a house and give it away to a more needy family. For humanity. Cmon....

It's just at the expense of one piece of investment!

NullPointer · Jan 18, 2018

Fuck that. Rent control is the only thing keeping a lot of people in SF right now, for instance. Without it their rent would double or triple and they'd be forced a long ways away.

This argument reminds me of those who point to some of the positives of gentrification. Sure, but those positives do not apply to those forced to move somewhere else.

You can build more, and should, but that takes time, and places like SF don't have the room to grow outward like other metro areas facing skyrocketing rents. Rent control + build more affordable rentals + close landlord loopholes that lead to abuses seems the way forward to me.

Ether_Snake · Jan 18, 2018

Br3wnor said:
I'd love to see data on how people feel on this issue before and after they buy a house/apartment.

I agree that for the general good of humanity, apartments and denser housing need to be built in my town, but now that I own a house and am relying on it's value to at least stay the same throughout the time I live there, my own interests are in direct conflict with this idea.

All your eggs are in one basket

Syriel · Jan 18, 2018

PanickyFool said:
Yup, "fuck you, got mine" although I am sure your are very polite about it.

Rent control in a nutshell.

Mammoth Jones said:
I mean I'm biased by dealing with rent control would be fine if folks would just pay their rent. But then they don't and it goes to arbitration and the judge sets up a payment plan which isn't followed and now we're back at arbitration. In the meantime it's know that's money not coming back and you're basically subsidizing someone else's cost of living on a 1:1 level. Not society as a whole but that landlord.

I guess that's another issue but also rent control is fine if it keeps the prices realistic to market. If it costs the landlord "X" on the mortgage then depending on other costs and property value and taxes rent needs to be "Y" just to not take a loss. And let's not forget it's not a charity. But at the same time so many greedy scumfuckers that don't fix shit and try ridiculous rent increases which are basically a means to say "Get out".

Rent control advocates in SF refuse to let RC be means tested. In fact, they've even blocked any efforts to survey incomes of those living in RC units because at the last estimate, something like half were going to people making six figures. It's not uncommon to find renters in SF who make more than their landlords.

Rent subsidies should be paid by the govt directly. And they should be means tested so that funds are going to those that absolutely need it. Not folks who like keeping a cheap weekend apartment in the City because they've had it since college and rent is still dirt cheap.

Ether_Snake · Jan 18, 2018

PanickyFool said:
Yup, "fuck you, got mine" although I am sure your are very polite about it.

In any case in a functional market (as in not propped up by the local government) the value of your house would decline as the structural and functional worth declines with age. The only think that should appreciate as human population grows is the value of the land.

https://www.seattletimes.com/busine...time-this-decade-as-new-apartments-sit-empty/

The value of land should decrease where density falls, due to reduced demand.

PanickyFool · Jan 18, 2018

NullPointer said:
Fuck that. Rent control is the only thing keeping a lot of people in SF right now, for instance. Without it their rent would double or triple and they'd be forced a long ways away.

This argument reminds me of those who point to some of the positives of gentrification. Sure, but those positives do not apply to those forced to move somewhere else.

You can build more, and should, but that takes time, and places like SF don't have the room to grow outward like other metro areas facing skyrocketing rents. Rent control + build more affordable rentals + close landlord loopholes that lead to abuses seems the way forward to me.

lol, yea SF can't do anything...

Ether_Snake said:
The value of land should decrease where density falls, due to reduced demand.

But we are not talking about falling density, we are talking about artificially limited density. The demand is constant.

Mammoth Jones · Jan 18, 2018

Syriel said:
Rent control in a nutshell.

Rent control advocates in SF refuse to let RC be means tested. In fact, they've even blocked any efforts to survey incomes of those living in RC units because at the last estimate, something like half were going to people making six figures. It's not uncommon to find renters in SF who make more than their landlords.

Rent subsidies should be paid by the govt directly. And they should be means tested so that funds are going to those that absolutely need it. Not folks who like keeping a cheap weekend apartment in the City because they've had it since college and rent is still dirt cheap.

Exactly! There shouldn't even be a debate here. It should be based off income.

Dehnus · Jan 18, 2018

Mr.Mike said:
Yes, from the article

So the problem isn't the rent control, but the landlords going "It's good to own land...." and basically doing pricefixxing... which actually is illigal. Since they all did it together at almost the same time, one can even acuse them of: Cartel practises. :).

Mr.Mike · Jan 18, 2018

Would income based rent controls discourage renting to lower income people?

Elfotografoalocado · Jan 18, 2018

PanickyFool said:
It is, but it is a local issue and a large, large, group of single issue voters like to vote in their economic self interest rather than society's. Then you have all those ignorant socialists that think it is in society's benefit, because reasons...

Hint: the more "socialist" a region is, the more expensive housing is.

The fact that rent control is not at all linked to income is atrocious.

It's funny that the EU is a communist hellscape by US standards and yet rent/housing are much cheaper...
It's a matter of supply. White flight, restrictive zone ruling (NIMBY) gave rise to the McMansion and the suburb and the luxury condo in the US, and that's what's causing the housing crisis.
Rent control is of course shit, but there's plenty things a truly representative local government can do to provide affordable housing.

Mr.Mike · Jan 18, 2018

Dehnus said:
So the problem isn't the rent control, but the landlords going "It's good to own land...." and basically doing pricefixxing... which actually is illigal. Since they all did it together at almost the same time, one can even acuse them of: Cartel practises. :).

What price fixing?

PanickyFool · Jan 18, 2018

Dehnus said:
So the problem isn't the rent control, but the landlords going "It's good to own land...." and basically doing pricefixxing... which actually is illigal. Since they all did it together at almost the same time, one can even acuse them of: Cartel practises. :).

Except, landlords are not doing price fixing. Rent controlled renters and homeowners are en masse using local political votes.

Mr.Mike said:
Would income based rent controls discourage renting to lower income people?

This program exits and is called Section 8. Rent Control is not for the poor, it is for existing voters.

Elfotografoalocado said:
It's funny that the EU is a communist hellscape by US standards and yet rent/housing are much cheaper...
It's a matter of supply. White flight, restrictive zone ruling (NIMBY) gave rise to the McMansion and the suburb and the luxury condo in the US, and that's what's causing the housing crisis.
Rent control is of course shit, but there's plenty things a truly representative local government can do to provide affordable housing.

You are perverting two different trends in this topic. In response to high housing costs in the select USA cities (all of which are Democratic controlled cities for decades), a lot of people on the left are demanding rent control for everything. While politically, this is just existing renters voter themselves money, it is not an actual solution. Our more economically liberal cities (i.e. Houston) have very loose zoning and allow for infill redevelopment, so diversity and affordability for all are rising.

And as someone with permanent residency in a former soviet country, and Dutch citizenship, I do not believe that (in-demand) eastern or western European cities are better off than NYC. Kiev housing costs are mind boggling compared to local income, much worse than NYC. Then my Dutch cousin gets to deal with waiting lists, more waiting lists, and more waiting lists...

shaneo632 · Jan 18, 2018

My landlord hasn't raised my rent in 2 years, what a gent.

DevilMayGuy · Jan 18, 2018

Cities like SF have notoriously strict zoning rules that prevent tons of rental housing from being built. They also don't allow more than a certain number of storeys per building in most of the city, preventing high rises and other spatially compact living solutions that could ease the housing shortage at the cost of the city's skyline.

Ether_Snake · Jan 18, 2018

PanickyFool said:
lol, yea SF can't do anything...

But we are not talking about falling density, we are talking about artificially limited density. The demand is constant.

I'm saying land value will decrease where density decreases, which inevitably occurs if density increases elsewhere.

KorrZ · Jan 18, 2018

I mean maybe but from my perspective being a renter if rent control was not in effect my rent would be 30% more than it is currently based on what similar units in my existing building are going for.

I'm quite happy with it.

PanickyFool · Jan 18, 2018

Ether_Snake said:
I'm saying land value will decrease where density decreases, which inevitably occurs if density increases elsewhere.

Ah, agreed. The proposed state zoning override legislation in CA would be terrible for a lot of people who bought in the exurbs. But it is needed medicine.

Dynamite Cop · Jan 18, 2018

shnurgleton said:
No, the solution is to build more rentals. The real question is whether the market incentivises selling condos over rentals, which it clearly does in places like SF where new building is nearly impossible due to NIMBYism

I live in the SF bay area and housing complexes seem to be popping up all over the place, but rents are still increasing :/

Br3wnor · Jan 18, 2018

PanickyFool said:
Yup, "fuck you, got mine" although I am sure your are very polite about it.

In any case in a functional market (as in not propped up by the local government) the value of your house would decline as the structural and functional worth declines with age. The only think that should appreciate as human population grows is the value of the land.

https://www.seattletimes.com/busine...time-this-decade-as-new-apartments-sit-empty/

It's true, I've found it much harder to stick to some of my more liberal views as work/money/home/bills have come to dominate my life. Don't have kids yet but when I do I'm sure this kind of stuff will take an even bigger hit. It's selfishness for sure but it's more selfishness for the family as I care most about the well being of my wife, more so than I do myself. And staying economically secure is pretty much our number 1 priority which would have an impact on decisions I'd make in my local town related to more housing.

Ether_Snake · Jan 18, 2018

KorrZ said:
I mean maybe but from my perspective being a renter if rent control was not in effect my rent would be 30% more than it is currently based on what similar units in my existing building are going for.

I'm quite happy with it.

No, you're not taking into account how the market would be without rent control. That's the point of the OP, it has a negative impact on development, and people turn appartements into condos for sale instead, reducing rent housing access further.

Br3wnor said:
It's true, I've found it much harder to stick to some of my more liberal views as work/money/home/bills have come to dominate my life. Don't have kids yet but when I do I'm sure this kind of stuff will take an even bigger hit. It's selfishness for sure but it's more selfishness for the family as I care most about the well being of my wife, more so than I do myself. And staying economically secure is pretty much our number 1 priority which would have an impact on decisions I'd make in my local town related to more housing.

You shouldn't have all your eggs in the same basket. Your house going down in value over time should be normal and not the end of the world for your financial well being. Common problem sadly. You should be renting and that should not make you feel emasculated. Sadly people shudder at the idea of renting.

NullPointer · Jan 18, 2018

PanickyFool said:
lol, yea SF can't do anything...

For the record I did say "outward". I know you're a fan of upward, and really, there isn't much choice when it comes to a landlocked place like SF.

And like Dynamite Cop says above, there are new developments everywhere you look, but prices are still batshit and climbing to further batshittery. Of course that kind of thing takes time to come anywhere close to meeting demand, but in the meanwhile rent control is a godsend and a lifeline.

the_wart · Jan 18, 2018

PanickyFool said:
Building more housing...

http://www.law.nyu.edu/sites/default/files/Been Ellen O'Regan supply_affordability_Oct 26 revision.pdf

I agree that this is the only viable long-term solution, and the effectiveness of capping % rent increases in particular I can't say anything about, but tenant protection laws will always be important even in the most competitive housing market. Moving is expensive, time-consuming, and complicated, so particularly low-income people will always have limited mobility in the short run. This effectively gives landlords monopoly power in that they have a monopoly on the the place that you live right now. Same reason you need workplace protection laws even in a competitive labor market. My wife is a lawyer with legal aide whose done a bit of landlord-tenant stuff, and man, she sees some shit.

NullPointer said:
For the record I did say "outward". I know you're a fan of upward, and really, there isn't much choice when it comes to a landlocked place like SF.

It's not just about SF proper though, it's about the entire metro area. High density construction in the surrounding suburbs would relieve some of the pressure on the SF housing market as well, since nearby housing will be a reasonable substitute for housing in SF for a good number of people.

LosDaddie · Jan 18, 2018

Rent Control is one of those issues where one's ideology can run contrary to (verifiable) data on hand. This can lead to frustration.

The solution is to simply build more apartments. You introduce more product into the market, and have the sellers compete. Prices will then proceed to decline as the marketplace adjusts.

PanickyFool said:
It is, but it is a local issue and a large, large, group of single issue voters like to vote in their economic self interest rather than society's. Then you have all those ignorant socialists that think it is in society's benefit, because reasons...

Hint: the more "socialist" a region is, the more expensive housing is.

The fact that rent control is not at all linked to income is atrocious.

Sounds like Economic Anxiety to me.

PanickyFool · Jan 18, 2018

the_wart said:
It's not just about SF proper though, it's about the entire metro area. High density construction in the surrounding suburbs would relieve some of the pressure on the SF housing market as well, since nearby housing will be a reasonable substitute for housing in SF for a good number of people.

Last data I saw had Palto Alto actually being the city with the biggest draw to the region now, on effect make SF a suburb of Palto Alto. It is terrible that the single family home owners of SV have be able to use their votes to hoard do much wealth.

Midramble · Jan 18, 2018

Fix the zoning. Japan style zoning. Do that first. SF is on its way... my wife asks me everyday if we'll move. I'm really holding out for rezoning and new building to make this place reasonable again.

Darkgable · Jan 18, 2018

Syriel · Jan 18, 2018

PanickyFool said:
Rent Control is not for the poor, it is for existing voters.

NoMoreTrolls said:
Cities like SF have notoriously strict zoning rules that prevent tons of rental housing from being built. They also don't allow more than a certain number of storeys per building in most of the city, preventing high rises and other spatially compact living solutions that could ease the housing shortage at the cost of the city's skyline.

In SF there is a very strong crossover in the Venn diagram of renters and NIMBYs. Rent Control in SF has given a bunch of NIMBYs a free hand to oppose any further development in the City.

KorrZ said:
I mean maybe but from my perspective being a renter if rent control was not in effect my rent would be 30% more than it is currently based on what similar units in my existing building are going for.

I'm quite happy with it.

Dynamite Cop said:
I live in the SF bay area and housing complexes seem to be popping up all over the place, but rents are still increasing :/

New housing is being built, but it is only in a small fraction of the City. You still see things like the 100% BMR development in the Mission being opposed by local NIMBYs because of the density.

If RC didn't exist in SF, there would be little-to-no incentives for renters to be hardcore NIMBYs, as development and new housing would be needed to keep rents low. So long as existing renters, who got in while the gettin' was good, are protected, there is -zero- downside to them being NIMBYs. Their rent can't rise, and if other people have to pay higher rents because of it, screw 'em. The NIMBYs were there "first" and that's all they care about.

Deleted member 12224 · Jan 18, 2018

NullPointer said:
Fuck that. Rent control is the only thing keeping a lot of people in SF right now, for instance. Without it their rent would double or triple and they'd be forced a long ways away.

This argument reminds me of those who point to some of the positives of gentrification. Sure, but those positives do not apply to those forced to move somewhere else.

You can build more, and should, but that takes time, and places like SF don't have the room to grow outward like other metro areas facing skyrocketing rents. Rent control + build more affordable rentals + close landlord loopholes that lead to abuses seems the way forward to me.

The bolded is correct as a factual statement but the follow up question is "so what?"

People aren't entitled to live in a specific place, protected from a changing market, simply because they were there early.

What is the argument for protecting those who are already there that goes beyond feeling bad?

Darknight · Jan 18, 2018

PanickyFool said:
Last data I saw had Palto Alto actually being the city with the biggest draw to the region now, on effect make SF a suburb of Palto Alto. It is terrible that the single family home owners of SV have be able to use their votes to hoard do much wealth.

What? Palo Alto is one of the richer areas of the Bay Area. I find it hard to believe that everyone wants to live there when for the most part it is way beyond the reach of people. I'd like to see that data and see if that data is being misinterpreted without understanding the region.

Ether_Snake · Jan 18, 2018

This is where you see the limits of democracy when the central government lacks power. Too afraid to lose votes.

Deleted member 14002 · Jan 18, 2018

cwmartin said:
Because you don't make as much money. Building to rent vs building to sell is something the developer or apartment management company decides if the market warrants they can make more money from Renting (long term) verse selling Condominiums for a return immediately. Also, condo's come with a lot more to deal with when building them.

I see, yeah that makes sense. Thanks for the explanation.

PanickyFool · Jan 18, 2018

Darknight said:
What? Palo Alto is one of the richer areas of the Bay Area. I find it hard to believe that everyone wants to live there when for the most part it is way beyond the reach of people. I'd like to see that data and see if that data is being misinterpreted without understanding the region.

Talking from a new jobs created point of view. Most new jobs were created in the Valley, not SF proper. Upzone the entire valley and most people would be moving there, not SF.

Despite how disgustingly NIMBY SF is.

Afrikan · Jan 18, 2018

When yall say that rent prices are going "down".... explain that alittle more? how much are they declining in these other Cities? in comparison to 5-7 years ago.

robosllim · Jan 18, 2018

PanickyFool said:
It is, but it is a local issue and a large, large, group of single issue voters like to vote in their economic self interest rather than society's. Then you have all those ignorant socialists that think it is in society's benefit, because reasons...

Hint: the more "socialist" a region is, the more expensive housing is.

The fact that rent control is not at all linked to income is atrocious.

Hint: half-hearted "socialist" policies are bound to fail in an otherwise free market economy. Affordable housing for every American is indeed in society's best interest, but it's true, rent control isn't the answer.

Darknight · Jan 18, 2018

PanickyFool said:
Talking from a new jobs created point of view. Most new jobs were created in the Valley, not SF proper. Upzone the entire valley and most people would be moving there, not SF.

Despite how disgustingly NIMBY SF is.

Ya, but Palo Alto isn't where those companies and jobs are. You specifically said Palo Alto was the city with the biggest draw in the region now and I find that very hard to believe. Upzoning Silicon Valley also doesn't exactly change the draw of people wanting to live in SF either. It really sounds to me you're looking at numbers without having any knowledge of the region.

Kirblar · Jan 18, 2018

Afrikan said:
When yall say that rent prices are going "down".... explain that alittle more? how much are they declining in these other Cities? in comparison to 5-7 years ago.

Seattle just had rents decrease for the first time in eons due to new housing stock being added to the market.

Housing is a good just like anything else. If demand goes up and supply stays static, prices go up. If supply goes up and demand stays static, prices go down.

Darknight · Jan 18, 2018

Kirblar said:
Seattle just had rents decrease for the first time in eons due to new housing stock being added to the market.

Housing is a good just like anything else. If demand goes up and supply stays static, prices go up. If supply goes up and demand stays static, prices go down.

Any idea what the affects were on housing prices?

NullPointer · Jan 18, 2018

cagey said:
What is the argument for protecting those who are already there that goes beyond feeling bad?

Maybe they're elderly, maybe they're sick or disabled, maybe they have no extended family or have no other place to go. Maybe those people are the heart and soul of communities and have deep roots. Maybe those are the people you need to teach in your schools and drive your buses and keep the city going day to day. Maybe a lot of things. They are people, not numbers.

I've seen examples of all of the above forced out in the past 20 years in SF, and its still going strong today, just with different loopholes being exploited so you can say 'so what?'.

And believe me, as someone who lost somebody close to me to suicide because they couldn't afford to live here any more and had no other prospects, its taken a lot of self control to stay focused in my response here.

Aaron Stack · Jan 18, 2018

Casual said:
I mean, that's great. But most people are not in a position where they can afford to look out for humanity before themselves and their family.

A home isn't just "one piece of investment", for many people that's their primary investment.

Most people are also motivated by greed, but that doesn't mean it can't be changed.

It is one piece of investment. Buying a home is a choice, no one forces you to do it. Putting all of your investment into a house instead of dividing it isn't the fault of anyone but the person who gambled.

The idea that you mention about people vs society is exactly one of the reasons why this country is in the situation it's in. Fuck you got mine in a perpetual self inflicted cycle.

Maybe another country will hopefully embrace this in the future. "The acquisition of wealth is no longer the driving force in our lives. We work to better ourselves and the rest of Humanity."

Mammoth Jones said:

Ok so buy a house and give it away to a more needy family. For humanity. Cmon....

It's just at the expense of one piece of investment!

Click to expand...

Click to shrink...

Who said anything about giving away a house? I don't know what you're talking about here or why it's directed at me.

No seriously, Rent Control does more harm than good

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