It has side effects, but is also addressing a specific problem people want to handle that isn't necessarily fixed by "just build a bunch of new market-rate housing."
Weakening rent control in the 90s in CA didn't prevent the current homelessness problems, so I have some skepticism around taking that even further. Pushing people who could afford marginal housing into no longer being able to afford it seems like a bang-up way to increase homelessness.
Part of the root of the problem seems to be cities that trying to both avoid densifying but also increase commercial and office space and occupancy and jobs. Either policy would be fine by itself, but they explode when put together. Some cities are slowly starting to realize this, but saying "we don't need a constant economic growth rate of X% if we don't want the feel of our city to change" may not be an easy choice for politicians to sell.
I'm not well-versed in the state of rent control in CA, but I am seeing more rent control put forth as a viable alternative to just building more residences. That strikes me as a bad idea.
It is a sad fact of life that the best outcome for everybody is to let the economically productive take first pick of any available resources; because they will by definition take them and turn them into more resources.
This idea that someone has a right to live somewhere because they were there first is not unreasonable, but the path of least suffering is that people pay the market price for rent.
There needs to be pretty overwhelming evidence that the problem is with what consenting adults agree to rather than the government being unreasonable with the rules on constructing new building. I'd bet that the US hasn't reached that threshold yet.
This is just self-aggrandizing "The folks life has already financially favored deserve every continued advantage over everyone else because they are so smart and talented and God's chosen ones" market-over-everything nonsense.
Which is to say that the people who create money (what's more economically productive than willing money into existence?) via issuing credit (banks) or borrowing on the US's account (the Fed) will have first pick of available resources.
You also make an distinction between what consenting adults agree to in contracts and what those same consenting adults do in local governance and regulation. But why wouldn't they have the right to say "we don't want buildings over three stories here," say? Why is that necessarily "unreasonable" yet a landlord deciding to raise someone's rent 40% wouldn't be?
That is not a fact of life, it is simply a hypocritical way of legitimizing monopolistic advantage. What one defines as economically productive will unequivocally align with the groups one favors over others.
Power is not natural, it is created and reproduced, and naturalized beyond the realm of critical thought by false claims to the facts of Life.
Does life really as facts? Which life?
Case in point: neighborhoods that are proud of themselves for thwarting evil developers in the name of affordability end up with fewer affordable units, because we fund affordable units as a percentage of total construction.
For example, if SF wants to solve housing (providing shelter) by municipally mandated equality between purchasing power of people, this has a certain cost, and this has a certain appeal for some residents. Would they pay more taxes to get council erected units for the less fortunate? Maybe. So these preferences have to be calculated and priced.
Sure, the market would get the most new units online in a given time, which would result in prices falling. But it seems like SF wants an apmost centrally planned solution.
They save the tax cut and buy back stocks.
They are not starting farms to create more food or building new kinds of companies — not doing economic net new things. They’re growing their own ephemeral wealth pile
The old ways, best ideas, they have all died out in human society. No longer do we worship Roman Gods and build pyramids for Pharaohs
It’s hubris and and vanity to think we have the iron clad solution today in our time
We’re just carrying water for dead and selfish
Consenting adults who have been told this is exactly right their entire lives by government backed research into propaganda models gifted to university and media and advertising will I’m sure magically come to their senses
Given the trade offs, the only reforms I'd make to rent control is having some kind of gradual income requirements. The higher your income, the less rent control you get, up to the point (say, $100k+) where you aren't protected by it at all. Even that is mostly for optics, though, and wouldn't help housing costs too much.
> The urban design think tank SPUR estimated in 2014 that San Francisco had “roughly 172,000 units of rent controlled housing” at the time, about 45 percent of the city’s entire housing stock.
https://sf.curbed.com/2017/11/3/16603900/rent-control-san-fr...
But you're right that the issue now is zoning and building codes of course.
Where do you think new housing has come up most in the Bay Area? Poor neighborhoods with lots of rent control, or rich neighbourhoods?
(Hint: you don't hear about gentrification issues in rich parts of the bay area because nobody can build new things there)
I think you're right and part of the problem is reflected in your comment. YIMBYs are supremely confident in its diagnosis of the complex housing problem: it's rent control and other impediments to the free market. They are so confident that it's literally at the level of flipping the bozo bit[1] on low-income and minority housing activists and attempting to speak on their behalf. They think the answer is so obvious that to think otherwise means you're being manipulated by rich white NIMBY homeowners.
That's understandably a bit insulting. It's led longtime housing activists to note that YIMBY has a "white privilege problem... They don't understand poverty."[2]
Meanwhile housing activists are saying things like, hey, maybe it has something to do with, I dunno, massively defunding the major force in constructing affordable housing for the poor and working class (HUD)?[3] Perhaps the income disparity is so great between low-income renters and tech workers that there is a wee bit of understandable skepticism that market-rate development alone will bring down the market price to something the working poor can afford?
YIMBYs need to do a better job of listening to and understanding the legitimate concerns from these communities if they want to be successful -- not attempt to talk over them (literally[4]) or rush through legislation that gets patched up later after protest.
[1] https://en.wikipedia.org/wiki/Bozo_bit
[2] http://www.latimes.com/politics/la-pol-ca-housing-bill-failu...
[3] http://www.sfweekly.com/news/the-great-eliminator-how-ronald...
YIMBYs do not have a position on rent control, because both sides are advocated for and debated.
The biggest problem with the YIMBY movement is people blindly accepting criticisms of YIMBY without bothering to investigate what YIMBY movements actually believe.
When there was a big panel discussion in my small Bay Area town last year, without a YIMBY member on the panel, the panel all concluded that YIMBYs oppose affordable housing. However, in this small town, the ONLY PEOPLE WHO SHOWED UP to advocate for recent affordable housing projects were YIMBY members. And it turns out that SB 35, the only YIMBY legislation I know about, is actually about building affordable housing.
So please stop reinforcing false beliefs.
YIMBYs do a great job of listening. They have changed their engagement in response to this. They are politically naive in that they believe they can advocate for ideas and trust that people will listen to them, instead of seeking out engagement of current power brokers first. And for example they didn't expect SB 827 to get the momentum that it got, perhaps not realizing that including transportation and basic good urban planning they will wake up a lot more people than with they did with the SB 35 affordable housing bill.
California politics is all about optics, unfortunately. At least, it is, until we stop letting that happen.
How so?
So it's definitely a problem of Yimby not managing it's image and forming alliances well.
While I support the Yimby approach the truth is it is largely led by upper middle class white people. To get things done in politics, you don't to have the best argument, you need to have the best consensus of citizens and $$ supporting you. The yimby org doesn't realize this - they think they can steam roll over minority groups to get things done, but frankly they need to a better job building bridges with these groups. This is how politics work.
E.g. it may be the case that rent control and other roadblocks increase the cost of housing in the long run (bad for anyone new moving to the Bay Area), but it certainly benefits the current occupants of rent-controlled housing.
That's one reason to be slightly skeptical of the label 'minority' organizations—it's unclear whether all minorities have the same interests at stake. In particular, minorities who currently live in below-market cost housing have markedly different expected payoff from a change in policy than minorities who currently live outside of the city.
Certainly, good politics and making nice can smooth over some amount of disagreement, but is there really a mechanism right now that could make everyone better off?
I, too, would like to live in a world where:
- Minorities and/or lower income people aren't priced out of the city
- ... and will have enough units to live in in the future
- and widespread construction so tech workers or other immigrants have cheaper rent
- the character of our neighborhoods aren't gentrified away
- and it isn't too expensive to build
...but experience as engineers tells us that there is always a compromise to be made when you ask for everything. The political fight here is who is will end up compromising, and how much.
Sure real-estate investors often complain about regulations. But those complaints are rooted in the effects of regulation on liquidity and profits, not on afforadability. Up market housing gets built because that's what people with money want [1] and where the net returns from developable parcels are often higher...commercial development has much higher potential returns still. That's why the big money like insurance reserves often prefers Class A office, retail, and industrial REIT's over single family or condominiums.
The big money in real-estate that drives markets is at a scale where affordable or even ordinary housing deals aren't big enough. The timelines of big real-estate money are often 30-50 years to match liabilities like life-insurance. The only part of the US housing market which comes close to that timeline is conventional 30 year mortgages. But at $100-200k per deal, it takes thousands of deals just to get $1 billion out the door. Then the thirty years is still just theory: there's refinancing and home sales making the practical investment turnover five or ten years (times thousands of investments).
Unaffordablility is a sign of high market demand where affordable housing is less preferred by investors than raw land or unredeveloped redevelopable property. Holding developable property means there's a real asset beneath the investment and the risk/reward can be spread across multiple economic cycles. Construction not only requires the injection of additional capital, but ties the risk/reward to a particular economic cycle. Again, it is worth keeping in mind that at the macro level the real-estate markets are largely driven by parked capital not borrowed money in the form of money. B2C isn't what drives real-estate markets over the long term.
The US housing market is driven by government intervention. FHA mortgages and the mortgage interest deduction are two easy examples. These exist because traditionally there has not been much incentive for the bulk of capital in the real-estate market to invest in houses for ordinary Americans. Historically, the sprawling checkerboard suburbs are largely the result of smaller ad hoc deals not the really big players. Though that's changing a bit, the involvement of the big players tends to encourage housing to move upscale and into multi-use developments with commercial and retail components..."the affordable lifestyle" doesn't look good on a sales brochure.
[1] Selling to people with money is a good sales strategy.
Millennium Partners [0] navigated San Francisco's notorious entitlement process. That's what they do as sophisticated developers. Part of that navigation (according to Wikipedia) was refusing to submit the project to peer review. In real-estate development terms, that usually means lawyering up and running rough-shod over city staff and usually garnering project support of line staff's political superiors. Better real-estate lawyers cost more money and city staff attempts to influence every real-estate development whether luxury or market rate (that's their job and why there is an entity called the "planning department"). The important point is there are a lot of fixed costs with real-estate development that only weakly correlate with project size. [1]
More importantly, the money behind Millennium Partners needs big expensive projects:
With these projects, Jeffries created a new investment vehicle to provide equity capital. The resulting financial structure included a consortium of German financial institutions including ERGO, Provinzial Wuerttembergische, AXA Colonia Immobilien AG, Energie Baden Wuerttemberg AG, as well as Goldman Sachs' Whitehall Fund and George Soros and his Quantum Realty Fund Limited. [2]
These are the interests that drive speculative real-estate development and speculative real-estate development is where most housing comes from these days, public housing is mostly done and dusted.
To put a finer point on the lack of deep market interest in building housing, consider Apple's new headquarters. Residential was never even on the table for the parcels Apple acquired from HP. No residential developer was going to outspend Apple for property adjacent to Apple's existing campus[3] and if one had, the housing would have had to have been luxury not market rate to make the numbers work. At the reported $3,000,000/acre, 20 dwellings/acre and 4:1 construction to land ratio each unit would be ~$750,000. Once you're at $750,000, there's no reason to cap unit mix at a 4:1 cost. That's just where they will start.
That brings us to risk. How quickly can Silicon Valley actually absorb 2000 $750,000+ units? What finances $1.5+ billion+ of residential development? Not today. Back in 2010 when housing prices were falling and financial markets were still unsteady. Apple was able to purchase because it had a pile of cash. Residential developers didn't.
The only people Apple was competing with were institutions interested in parking money in real-estate and waiting for the value to go up. In an alternate world where that happened, there is no reason to assume that the HP parcel would have wound up as housing. It might have, but the most likely outcome is it would have remained as the "higher and better" commercial use.
[1]: In residential development there can even be an inverse correlation between entitlement costs and affordability: i.e. an SRO will probably face more political friction than luxury apartments.
[2]: http://millenniumptrs.com/ see Christopher M. Jefferies profile.
[3]: Even commercial developers couldn't make the numbers pencil out for commercial reuse of the existing buildings.
This would create disincentives for seeking a higher salary (because an increase in salary might be offset by getting kicked out of your BMR unit).
I doubt the YIMBY movement is going to solve the problem, because they have alienated many lower-income voters.