California tenants receive rent-hike threats that will only be rescinded if rent-control initiative fails

boing
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California resident here (northern, Sacramento/Bay area), who votes blue, bleeds blue, and generally has zero use for anyone who wears the title of republican. I’ve read through Prop 10 and, honestly, it’s just straight-up poorly written. It’s going to have numerous unintended consequences, it’s not going to do what proponents say it will do, and it’s got just as much dark money on the pro side as there is on the anti side because it can be so easily abused. In short, it’s a bad proposition, mechanically, that ought to be scrapped and then rewritten into an effective form.

I’m in favor of rent controls in most circumstances and I believe that there are rational solutions to be had to our incredibly awful housing problems (that I get to personally see every day, for the record). But I am firmly convinced that this Proposition is not the answer that we need. if it’s allowed to pass, it will be used as a whipping boy against future possible Propositions and it will set us back years in terms of progress that we needed to be seeing two decades ago.

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Right. But new housing is not the same as affordable housing.

The construction in many cities with such housing crises goes on. But only for the luxury market.

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I feel like this would backfire. I’d be so full of “fuck you” that I’d make sure to vote for the measure.

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‘affordable’ does so much work here; are we talking about ‘affordable’ in the sense of subsidized housing, or market-rate housing designed to be priced at the bottom or middle of the rental market?

Because the first thing, rent-subsidized Affordable Housing, is not lacking for either suitable locations or money to build units. What this housing is lacking is the ability to overcome the objections of their rich neighbors, who abuse the zoning process and threaten their elected representatives with recall in order to prevent poor people from having a home near them.

The second thing, brand new units that are priced below or at the bottom of market rates, despite having modern amenities and zero wear and tear from prior tenants, aren’t a real thing. No person who invested a bunch of money, who made a bunch of compromises from city council members and neighborhood groups in order to get the necessary zoning exemptions, is going to leave money on the table by charging less than the market can bear. But what those top-of-the-market units do is convince some rich person to move there, instead of bidding up units on your 40-year old building.

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All of the above works for me.

No arguments on anything from your 2nd paragraph

My prior point was that the market rate itself has nothing to do with actual occupancy of residents in a given market, but is a product of:

  1. Foreign investment/money laundering
  2. Overly loose mortgage underwriting
  3. Restricted inventory due to foreclosed or bank owned properties being artificially prevented from hitting the market.

Those builders looking to convince a rich person to move there are facing a problem with not enough of them willing to buy in some places. We are already seeing the start of luxury “ghost cities” in areas with ridiculously high property values/rents because of this kind of overbuilding. (NY and Northern NJ being especially obvious)

Those builders unwilling to build housing for people who work for a living are creating a self-defeating toxic environment for themselves.

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ab-fab-bubble-how-common

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I’m surprised to see so much support for Prop 10 and rent control here. Rent control doesn’t do anything to provide affordable housing. It rewards long term tenants and jacks up market rates for everyone else.

I think it’s great for communities to provide affordable housing, but the community should bear the burden of providing that, not private citizens. Why should landlords have to subsidize someone else’s living expenses? In what other category of expenses would that make sense? Should we fix the price of food or clothing?

The only way to provide affordable housing is to create more housing in general, and rent control has been shown to have a chilling effect on housing development.

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Rent control, along with building enough new units can stop the worst kinds of displacement that accompanies building new units. Advocates correctly note that new developments can cause adjacent rents to rise, and rent control is a way to curb that. But yeah, rent control with the current anti-development status quo does not bode well for adding the new units that we need.

So, a newly-liberated city council would do good to accompany any new rent controls with upzoning and loosening other zoning restrictions. My cynical prediction is that NIMBYs fuck us all over with bad-faith arguments about the environment, traffic, and crime.

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Urban.org: Luxury Housing is not to blame for San Francisco’s affordable housing crisis

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I guess tell that to the people who live in rent controlled apartments who can afford to live there? It might not be a perfect solution, but it’s step in the right direction. Cost of living is OUT of control all across the country. We must address that in whatever way is politically feasible.

The market is also ensuring that poor and middle class people are getting pushed out of cities. Housing is a human right, not a get rich quick scheme.

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VACANCY TAX: BETTER THAN RENT CONTROL

Rent control doesn’t force owners to offer their properties “to let” at the allowed rent. Rent control doesn’t force land owners to build more housing. On the contrary, it discourages both, reducing the supply of housing, and therefore RAISING the rents of whatever part of that supply is not subject to rent control. Exempting NEW buildings from rent control may avoid deterring construction, but it still doesn’t open up EXISTING buildings for tenants. Worse, it means that the stock of rent-controlled housing becomes a shrinking fraction of the whole housing stock — unless the exemption is only for a limited time, in which case you’re discouraging construction again!

Will removing regulatory barriers to construction solve the problem? Not by itself, although it’s obviously a necessary condition. Cheaper housing requires developers, builders, and owners to increase supply to a point where it reduces their return on investment. They obviously won’t do that voluntarily. They will do it only if they are penalized for NOT doing it.

SOLUTION: Put a punitive tax on vacant lots and unoccupied housing, so that the owners can’t afford NOT to build housing and seek tenants. By reducing the owners’ ability to tolerate vacancies, a vacancy tax strengthens the bargaining position of tenants and therefore reduces rents. It yields both an immediate benefit, by pushing existing dwellings onto the rental market, and a long-term benefit, by encouraging construction.

Such a tax, by reducing the cost of housing, would make it easier for employers to pay workers enough to live on. A similar tax on commercial property would reduce rents for job-creating enterprises. That’s GOOD FOR BUSINESS and GOOD FOR WORKERS.

A vacancy tax is also GOOD FOR REALTORS because they get more rental-management fees for properties coming onto the rental market, plus commissions from any owners who decided to sell vacant properties to owner-occupants (who of course don’t pay the tax).

Best of all, the need to avoid the vacancy tax would initiate economic activity, which would expand the bases of other taxes, allowing their rates to be reduced, so that the rest of the city/state/country gets a tax cut!

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I would tell those people that rent control didn’t provide them with affordable housing. They were apparently able to afford market rates when they moved in. It might stabilize their rent at a level they can afford, but that would be at the expense of anyone entering the rental market after them. I would tell them that rent control could limit their landlord’s ability to make improvements. I would tell them to try to increase their income as much as possible so they aren’t trapped in a subsidized apartment that they can’t afford to move out of.

The only way to provide affordable housing at the level that California needs is to build more units, hundreds of thousands of units. The market is cruel and slow, but ultimately more effective than rent control.

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The problem with rent control is that it does not control a landlord’s expenses … when the controlled income coming in doesn’t match the uncontrolled cost of maintenance and repairs, the tenants have to do without repairs and maintenance.

Been there, done that.

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And that’s not gonna help if all those units are out of the price range of working and middle class californians. I hate to break it to you, but the markets won’t solve this problem. You need government intervention here. The market doesn’t give a shit about human rights.

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Subsidization.

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Former mortgage lender here. The above is only an issue with borrowers who are overleveraged, or for large property management companies who don’t give a fuck about anything other than their bottom line.

Think about it. Has the cost of utilities, taxes, maintenance and repairs really risen as fast as the cost of rent?

Of course not. Slum lords were a thing long before rent control.

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