Re:Do rent controls work?
by simoncion on Wednesday September 02, 2015 @06:49PM
(#10162429)
It's lots better than driving, but far, far, far worse than it could be.
I understand that designing and running a public transit system isn't easy. Having said that, I wish that public transit was universally recognized as a very important public service and an excellent stimulator for a region's economic growth. As it stands now, it seems that shortsightness and greed seriously impede the development of an effective system in the region.
In re: rent control: Remember that -in SF- rent control is actually rent stabilization. When a unit is vacated (or the last tenant on the original lease moves out), the landlord is free to set the price of that unit however he wishes.
Rent control was instituted in a time when rents were spiralling out of control. [0] AIUI, one of the reasons Prop 13 passed was that landlords made the claim that a dramatic cap in property tax increases would allow them to stop dramatically increasing rents; that the primary reason for the rent increases was property tax increases. Prop 13 passed, rents continued to spiral out of control, [1] and about a year later rent control was instituted. [2]
If it was the city's policy to construct enough new housing to meet demand, I would agree that rent control had no place in the market. However, in the past five years, for every five people added to the city's population, one new housing unit has been added. Even during the real estate boom from 2000 to 2008, the human population grew by ~2,700 units more than the housing population. [3][4]
[0] Much like now, heh.
[1] Surprise, surprise.
[2] For information on what cost increases landlords can recover from tenants in rent controlled units, see these comments: https://news.ycombinator.com/item?id=10150827https://news.ycombinator.com/item?id=10153973 For a big apartment construction project that managed to create a bunch of "market rate" units without removing rent controlled units, see this comment: https://news.ycombinator.com/item?id=10150724 (Frankly, the city should be trumpeting this deal every chance it gets. This sort of thing is what's going to solve the rent crisis.)
[3] This is a HORRIBLE way to phrase this, but I can't word right now. If it doesn't make sense, I'm happy to clarify.
I understand that designing and running a public transit system isn't easy. Having said that, I wish that public transit was universally recognized as a very important public service and an excellent stimulator for a region's economic growth. As it stands now, it seems that shortsightness and greed seriously impede the development of an effective system in the region.
In re: rent control: Remember that -in SF- rent control is actually rent stabilization. When a unit is vacated (or the last tenant on the original lease moves out), the landlord is free to set the price of that unit however he wishes.
Rent control was instituted in a time when rents were spiralling out of control. [0] AIUI, one of the reasons Prop 13 passed was that landlords made the claim that a dramatic cap in property tax increases would allow them to stop dramatically increasing rents; that the primary reason for the rent increases was property tax increases. Prop 13 passed, rents continued to spiral out of control, [1] and about a year later rent control was instituted. [2]
If it was the city's policy to construct enough new housing to meet demand, I would agree that rent control had no place in the market. However, in the past five years, for every five people added to the city's population, one new housing unit has been added. Even during the real estate boom from 2000 to 2008, the human population grew by ~2,700 units more than the housing population. [3][4]
[0] Much like now, heh.
[1] Surprise, surprise.
[2] For information on what cost increases landlords can recover from tenants in rent controlled units, see these comments: https://news.ycombinator.com/item?id=10150827 https://news.ycombinator.com/item?id=10153973 For a big apartment construction project that managed to create a bunch of "market rate" units without removing rent controlled units, see this comment: https://news.ycombinator.com/item?id=10150724 (Frankly, the city should be trumpeting this deal every chance it gets. This sort of thing is what's going to solve the rent crisis.)
[3] This is a HORRIBLE way to phrase this, but I can't word right now. If it doesn't make sense, I'm happy to clarify.
[4] Citation for these numbers is the Paragon Real Estate graphs found in this article: http://sf.curbed.com/archives/2015/02/04/sfs_population_is_g...