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>I live in San Francisco [0], am not wealthy, and am trapped in my rent-controlled apartment by the skyrocketing rents of the non-rent-controlled (and reset-to-

• nosuchthing 11y ago
  >you're forcing someone else to pick up your tab Circumstantial scarcity of housing aside, unless the landlord is paying more in building maintenance and property taxes, the assumed loss of revenue due to inflated land costs is not actually "costing" anything. If instead of rent control the federal government forced cities to build an ample supply of housing for the local population within commutable distance, causing the price of investment land / buildings to drop, the cost of maintaining that land remains the same.
  • Frozenlock 11y ago
    > the assumed lost of revenue due to inflated land costs is not actually "costing" anything. Sure it is. It even has a name: opportunity cost. If I had the opportunity to sell my underwear for 1000$, but I chose not to, this decision cost me 1000$. Say you make $300 a day. One morning, I wave my gun in front of your front lawn and strongly suggest you don't go to work today. Your daily expenditure will be somewhat the same as every other day (mortgage, food, electricy, etc) ... Will you say I didn't cost you anything?
    • timr 11y ago
      Opportunity cost is the loss of potential gains from other choices when you make a decision. It is not the theoretical amount you're pissed off about "losing" but for the existence of a law you don't happen to like. People who owned property with a certificate of occupancy prior to June 13, 1979 (i.e. a rent-controlled property in SF) can genuinely grouse that they bought an asset with a different expectation of return than what they got. Everyone else bought into a system knowing the rules of the game. It's no more "opportunity cost" than someone who buys a suburban property with land-use restrictions complaining that the laws prevent him from using his land to start a refinery. If you buy a rent-controlled building today, you know that you're buying a building with a defined revenue stream. It is not "opportunity cost", except in the sense that you chose to buy the building in the first place.
      • Frozenlock 11y ago
        Sure, but the parent comment wasn't arguing about when the owner bought the property, but whether we could say something has an increased cost even with a constant upkeep price. If you buy a property today, it's the same as if I warned you about my weekly visits with my gun waving prior to you moving in. You should have already calculated the stay-at-home-day in your weekly income. You can be pissed by my behavior and find it unjust, but you should still have factored it in.
        • simoncion 11y ago
          I don't see how your analogy does anything but bolster timr's point. Would you kindly try again with a different analogy? I'm not snarking; I'm genuinely curious and looking to understand what you're trying to say.
          • Frozenlock 11y ago
            Timr is right in that a very high probability foreseeable event doesn't really count as a opportunity cost. I made clear to what specific point my original response was. I expanded on my original analogy because Timr left me with the impression that he thought it wasn't an opportunity cost because it was a law (and that made it OK). Being a law isn't important. The predictability, when buying the property, is. My analogy also shows that even if the event is predictable, or as he would say, "the rules of the game", it doesn't mean it's just in any ways. Here's a different analogy. If you buy a farm land that gets flooded every single year on the last day of June (for the past 200 years, like clockwork), you can't really say you lost money when the next flood happens; you should already have factored this event in overall expenses... tho it still sucks that your land gets flooded.
            • simoncion 11y ago
              Cool, thanks much for taking the time both explain your thinking and creating another analogy! Seriously, kudos! :) > My analogy also shows that even if the event is predictable, or as he would say, "the rules of the game", it doesn't mean it's just in any ways. I agree with your statement. However, in the specific case of being a landlord in a rent controlled district, I feel that -today- the rent controlled laws are entirely fair. In the late 1970s, there was good reason to complain about how you lost expected value in your "investment". Today? No. As timr said: > If you buy a rent-controlled building today, you know that you're buying a building with a defined revenue stream. It is not "opportunity cost", except in the sense that you chose to buy the building in the first place. I have no sympathy for landlords who purchase a currently occupied rent-controlled building with the expectation that they will be able to make money by removing the existing tenants. If the success of your business plan relies on very low probability events, or it relies on causing misery and human suffering, it's a bad fucking plan. :) To speak to the "lost opportunity cost" angle: If one purchases a rent-controlled apartment, the correct thing to do is to expect the value of that property to remain exactly the same for the next seventy years. Any opportunity to increase the rent in a unit should be seen as an unexpected windfall. It's completely unreasonable to think otherwise: when one bought the property, one either knew what one was getting in to, or one is so unaware that one has no business running a business. :)
  • tsotha 11y ago
    >Circumstantial scarcity of housing aside, unless the landlord is paying more in building maintenance and property taxes, the assumed lost of revenue due to inflated land costs is not actually "costing" anything. Sure it did. It cost him risk and opportunity. People who buy property are at the mercy of changing economic conditions, whimsical government bureaucracies, and easily-led voters. They could have bought T-bills instead without any of the headache. I wouldn't buy rental property, especially in San Francisco. Nobody's going to come by and drop off a check if you lose money, but they'll certainly be there to collect if your property goes up in value.
    • simoncion 11y ago
      > Nobody's going to come by and drop off a check if you lose money, but they'll certainly be there to collect if your property goes up in value. I mean this in the nicest way possible: Do you live in California, and/or rent in San Francisco? Prop 13 ensures that property values -and thus the taxes due on that property- are only reassessed when a property changes hands. If you've held on to a property since Prop 13's passage, your property taxes have not increased in 37 years. If you're a landlord in San Francisco, the following additional things apply: You can recover the 100% of the cost of any legally mandated building improvements from your tenants through rent increases. If you pay for your tenants' utilities, you can recover 100% of utilities cost increases from your tenants. You can recover either 100% or 50% (depending on the number of units in your building) of capital improvement costs from your tenants. In the case of increases in Operating and Maintenance expenses, you can permanently increase your tenants' base rent by up to 7%. Small landlords can do this every year. Large landlords can do this once every five years. Unlike the capitol improvements and legally-mandated-improvements recovery mechanisms (which end when the landlord has recovered what he can legally recover), this increase never goes away. There are even provisions for increasing rents, if they are extraordinarily below "market rate" for extraordinary reasons. Read this and be enlightened: http://www.sfrb.org/index.aspx?page=947 http://www.sfrb.org/index.aspx?page=947 In the five years I've been here, I've only ever a landlord ask for an O&M rent increase once. His petition included a wide variety of line items that even a child could have seen were inapplicable, [0] so his petition was denied. [1] Landlords who hang on to properties to provide housing see only slow, gradual changes in their operating costs, which can almost always be completely recovered from their tenants. Their property taxes will never go up for as long as they live. Frankly, they have a pretty sweet deal. [0] The landlord was clearly using an O&M petition to attempt to recover the cost of renovations whose primary purpose were to double the number of "bedrooms" in each newly vacated unit in the building so they could collect 1.5x to 1.75x the rent. [1] Given that a landlord can trivially recover increases in his O&M costs, why have I never had an O&M-related rent increase in five years? Is it -perhaps- that landlords in the city just don't see significant increases in their O&M expenses?
• gnu8 11y ago
  You say that like the people (through the government) don't have the right to apply price controls to the market. They do.
  • mc32 11y ago
    I rent. But conversely, I dont believe the gov't should regulate rental prices via rent control. It's a perverse incentive. If the gov't wants cheaper units, build cheaper units themselves. Virtually confiscating property from owners is not the way. If I had money to own or build, I certainly would be disincentivized to build if I knew those properties could become rent controlled. I really don't understand the reasoning of rent control beyond knee jerk reaction. Now. I live in SF but I don't believe it's my "right" to live here, so long as there were affordable units within commuting distances. By affordable I mean enough units at different income levels. But gov't needs to encourage building, not stifle building, which seems they work very hard at.
    • simoncion 11y ago
      > If I had money to own or build, I certainly would be disincentivized to build if I knew those properties could become rent controlled. You live in SF, so you know that new construction will not be covered under rent control laws. [0] Why would you say this? > But gov't needs to encourage building, not stifle building, which seems they work very hard at. Agreed. If the city government removes the anti-development zoning laws in much of the city and works to placate the rabid anti-development leaders in both the "DON'T SPOIL MY VIEW!" and "NEW CONSTRUCTION IS ALWAYS RENT CONTROLLED UNIT DESTRUCTION AND YOU SHALL NEVER DESTROY A SINGLE RENT CONTROLLED UNIT!" camps, and there is still barely any new construction, then perhaps it will be time to see why a law that controls rent only in buildings constructed prior to 1970-mumble is stifling construction of new buildings in 2015. [0] Except in special cases like the Trinity Towers project. In that case, Sangiacomo got permission to destroy a building full of rent controlled units if he replaced each of those units with a rent controlled one in the new building. This was a 1:1 replacement. No rent controlled units were lost, no additional rent controlled units were created, and Sangiacomo got a new building full of "market rate" units in the bargain.
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• logicallee 11y ago
  Your argument is flawed, because regulating a market isn't the same as picking up someone else's tab. To see an analogy for why take something (unrelated) like a theoretical "monopoly" - currently illegal to establish one - , that becomes a monopoly, starts charging monopoly prices, and buys any new competitors while they're still tiny, for 100x earnings, so that it can retain a monopoly, including paying commpetitors not to enter the field at all. This happens, and happened. They then charge based more on intrinsic utility rather than the competitive commodity price, and do all sorts of lock-in stuff to retain their monopoly advantage. Now, let's say I want to run a monopoly like that. Are you forcing me to "pick up your tab" by supporting the law that makes my plan to set up that monopoly illegal? In other words, by supporting laws that make this business plan illegal, are you forcing me the businessman to pick up your tab as a consumer? Remember, trusts and monopolies (a historical fact) happened through other simple, pure private contracts and normal market behavior. If you're okay with regulating this (and unless you want to start paying 5x more for many of your everyday items, then you are), then I don't see why you shouldn't be okay with regulating the housing market: the natural market prices aren't somehow automatically morally afforded. Society gets to choose different priorities at times. Edit: Boy do you guys not get an analogy :) (This is at -1.) I've made it a bit more explicit. First of all, to the respondent who said that is not how trusts/monopolies work, please look up the history of monopolies. They were by private contracts and transactions that are not illegal by themselves, but deprive everyone of a competitive market. Secondly, this is an analogy - because by regulating monopolies, you are removing someone's right to simply set a market price, or agree to a bundle deal with another company, or purchase certain other companies, and similar normal, everyday, market behaviors, that any company can do unless they happen to have shored up a monopoly position. The poster who called my characterization "mustache-twirling" is exactly right: this mustache-twirling behavior is precisely what is allowed if you think it is morally wrong to regulate markets.
  • tsotha 11y ago
    To see why your argument is flawed, you need only realize the rental market in SF is not a monopoly.
  • Frozenlock 11y ago
• deleted 11y ago
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• joeevans1000 11y ago
  If an 80 year old pensioner has lived in their San Francisco apartment for 50 years, but can no longer afford their rent because it has skyrocketed, what do you think should happen?
  • mc32 11y ago
    Personally? I think the state should underwrite those folks in housing set aside for retirees. Since they are retired, there is no need for them to be close to jobs --they do need to be close to medical and shopping facilities, etc, or provide those services via alternative means (door delivery, personal visits, etc.)
    • joeevans1000 11y ago
      Well, for me, cities are more than just a proximal place to jobs. They have a culture, part of which is retirees. Additionally, I think shipping off retirees (or just the poor ones, it seems) would be harsh for them.
      • mc32 11y ago
        I understand your take. And I understand people can have some attachment, but I think those emotions are temporary and can be addressed by making these alternative places attractive places --places built with retirees in mind. Lots of retirees from cold states move hundreds of miles to warmer climates --there may be some thought to attachment, but mostly they look forward to places made to accommodate them. Places where there are others just like them. An alternative which happens in places with declining populations, is retirees dying in their homes, alone, to be discovered days or months after. The poor are another separate issue. They need to be close to jobs or at least have a way to get to jobs easily. When I was poor, I didn't care to live in a cachet neighborhood, I just needed to be able to get to my job with reasonable public transit and I wanted to feel the area was safe. Of course, given the alternative, I'd want to rent a bungalow next to the beach for cheap, but it's not a necessity and it's not a necessity to live next to one's job. That said, I would love to see more mixed use zoning.
• simoncion 11y ago
  > You're not trapped anywhere. I am. Over the past five years "my" apartment building has changed hands several times. The current landlord is a large company who actively attempts to remove long-term tenants, frequently neglects legally-required upkeep and maintenance and actively attempts to suppress tenants' attempts to organize. In a reasonable market, this landlord would not be permitted to act as a slumlord; his rooms would remain empty, and his reputation would catch up with him. He can only behave this way because city wages don't track city rents. The city's failure to build housing to meet demand has trapped a not-insubstantial slice of its population in substandard conditions. > ...you're forcing someone else to pick up your tab... Last I checked, the cost of durable goods and competent labor hadn't more tripled over the past five years. This is to say that the cost of renting a room in a building in SF has far outstripped the actual cost of running that same building in SF over the past five years. I'm pretty sure that it's not me that's running up a tab. It's abundantly clear that there's something rotten in the market, and that it's not rent control. :)
  • tsotha 11y ago
    >I am. Over the past five years "my" apartment building has changed hands several times. No, you're not. You're only trapped by your own insistence on living in that particular neighborhood in SF. I don't see why you think because you've become comfortable somewhere you're entitled to stay there forever. >I'm pretty sure that it's not me that's running up a tab. Yes it is. The value of what you're consuming has gone up, but you've used the government to force your landlord to provide you a place for less than its' worth.
    • simoncion 11y ago
      > ...you've used the government to force your landlord to provide you a place for less than its' worth. One can make a pretty compelling argument that others in the city have very effectively used the government to make the value of their places far, far higher than their actual worth.
  • kelnos 11y ago
    It's abundantly clear that there's something rotten in the market, and that it's not rent control. There are many things rotten in the market, and that includes rent control.
• thwest 11y ago
  You can no longer afford the tithing rate of profit to Capital in San Francisco, and you're forcing someone else to pick up your tab instead of revolution.