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Once upon a tech TechCrunch did an amazing write-up on San Fran housing issues. One of my favorite points was the following cascaded issue caused my rent contro

Once upon a tech TechCrunch did an amazing write-up on San Fran housing issues. One of my favorite points was the following cascaded issue caused my rent control. 1) Rent control keeps rent prices down 2) This leads to matching controlled property tax 3) This incentivizes small cities to prefer uncontrolled commercial zoning over controlled residential. 4) Which means smaller cities have way too much commercial space and not nearly enough residental. Oh what a tangled web we weave when we practice to artificially constrain rents. Wait. I think I did that wrong. Ah well. Close enough!

w1ntermute 11y ago
I think this is the piece you're referring to: http://techcrunch.com/2014/04/14/sf-housing/ http://techcrunch.com/2014/04/14/sf-housing/
simoncion 11y ago
You have #1 and #2 inverted. Prop 13 happened first. After rents failed to stabilize [0], Rent Stabilization ordinances were enacted. [0] One of the several arguments for Prop 13 was "Prop 13's enactment would keep rents in check, because increases in property valuations (and -thus- property taxes) are a significant contributor to spiralling rents.". Turns out that that argument was fabricated. :P
- forrestthewoods 11y ago
  Oh wow. You're totally right. I feel quite silly now!
  - simoncion 11y ago
    No worries. If you're still within the edit window, it might be nice if you'd reorder the list in your second 'graph.
- ghshephard 11y ago
  The fascinating thing about Prop 13 [1] is that the Property Taxes can only increase by 2%/year unless the property is sold, or there is a change of ownership of the entity that owns the property. But, if the property is purchased by a group, and no member of that group owns more than 50%, then members of the group can change, and the property tax is never reset to market rates. [1] https://en.wikipedia.org/wiki/California_Proposition_13_(1978) https://en.wikipedia.org/wiki/California_Proposition_13_(197...
  - simoncion 11y ago
    Yep. There needs to be some careful, real, honest thought put into it, but I'm strongly of the opinion that Prop 13 needs to be repealed, yesterday, with an allowance for a -say- ten-year gradual ramp-up in assessed property values for landowners who own a property for their use and/or the use of their family. Real estate investors and non-human owners can go take a hike. ;)
    - faster 11y ago
      What about retired people? A friend's single mom paid off her house 35 years ago in a relatively poor neighborhood in southern California. She worked as many jobs as she could to do that, all would be considered menial today; laundry, sewing, cleaning houses. That area is now expensive enough that even with Prop 13 her children have to pay her property taxes for her. Her family, friends, church, etc. are all there, so it's not a trivial thing for her to move someplace cheaper (which would be at least 50 miles away, not a reasonable bus ride in that area).
      - slyall 11y ago
        1. After a hard life she is now a millionaire 2. Assuming she is living almost alone she probably doesn't want a [big] house and could move into a smaller unit nearby (and have some money left over) 3. But, there probably are not any smaller units since zoning effectively blocked them being built.
        11y ago
kspaans 11y ago
Devil's advocate: you think your landlord should be allowed to double your rent at the end of your lease? (If they can choose to not continue the lease and evict you, I guess it's the same thing.) In Ontario, for example, there is essentially an inflation-adjusted rate that landlords are allowed to increase their rent by every year (http://www.landlordselfhelp.com/RentIncreaseGuideline.htm http://www.landlordselfhelp.com/RentIncreaseGuideline.htm) without prior approval. I'm sure there are many flavours of rent control, tilting either towards landlords or tenants.
- forrestthewoods 11y ago
  Of course I do. You had a lease for a negotiated price for a year. That year ended. Now you can negotiate a new price based on current market conditions. A co-worker got tired of moving every year due several years in a row of homeowners wanted to sell their house when his lease ended. So he asked to sign a two year lease. The homeowner said no. Then he offered an extra $200 a month and two years. And the homeowner said yes. Voila! I work at a small company (<20) and we're looking for new office space. For some locations we can lock-in a pretty good price if we're willing to sign a 5-year lease.
  - 6t6t6 11y ago
    That would allow a really dangerous behavior: the landlords would put flats under the market price, in order to get new tenants, and after one year living there (furniture bought, new friends, school for the children, etc.) the landlords would be able to rise the fee as much as they want. The situations where there's an asymmetrical negotiation like landlords-tenants or employer-employee must be regulated by law in order to make them fair. Law, not wealth, should give rights the people.
    - adventured 11y ago
      The majority of the US has had free market pricing for renting for two centuries, and the scheme you're describing has historically been the extreme rarity, not the common. Further, in a market system there's no such thing as: "landlords would be able to rise the fee as much as they want." Not even close. I don't believe anyone can fail to understand what happens next when a landlord tries to command ten times their prior rent. People are not hostages, they move.
Ankaios 11y ago
Mountain View doesn't have rent control.
- forrestthewoods 11y ago
  Mountain View is part of a ecosystem that does. And they're covered by prop 13 which is what directly incentivizes commercial over residential.
  - deleted 11y ago
    [deleted]
  - gozo 11y ago
    Seem more like your injecting you pet issue into the conversation than any sort real analysis. Why would i even matter? Any single issue is hugely overshadowed by the reality of rapid growth in demand.
khuey 11y ago
The preference for commercial zoning is a quirk of California law. California cities are allowed to tax people based on where they work, but not where they sleep. Payroll taxes are fine but income taxes are forbidden by state law.
Johnny555 11y ago
Few small cities in the Bay Area have rent control ordnances, including Mountain View, which is the city that originally wanted Google to build all new offices and no residences. So no,it's not Rent Control that is driving commercial-only zoning restrictions. Perhaps it's the fact that commercial office tenants pay property taxes, but require few city services in return -- no schools, limited police and/or fire services, little demand for parks or recreational activities, etc. Even in SF, only buildings built prior to 1979 are covered under rent control rent restrictions, so rent control wouldn't affect new zoning decisions.

w1ntermute 11y ago

I think this is the piece you're referring to: http://techcrunch.com/2014/04/14/sf-housing/ http://techcrunch.com/2014/04/14/sf-housing/

simoncion 11y ago

You have #1 and #2 inverted. Prop 13 happened first. After rents failed to stabilize [0], Rent Stabilization ordinances were enacted. [0] One of the several arguments for Prop 13 was "Prop 13's enactment would keep rents in check, because increases in property valuations (and -thus- property taxes) are a significant contributor to spiralling rents.". Turns out that that argument was fabricated. :P

forrestthewoods 11y ago
Oh wow. You're totally right. I feel quite silly now!
- simoncion 11y ago
  No worries. If you're still within the edit window, it might be nice if you'd reorder the list in your second 'graph.
ghshephard 11y ago
The fascinating thing about Prop 13 [1] is that the Property Taxes can only increase by 2%/year unless the property is sold, or there is a change of ownership of the entity that owns the property. But, if the property is purchased by a group, and no member of that group owns more than 50%, then members of the group can change, and the property tax is never reset to market rates. [1] https://en.wikipedia.org/wiki/California_Proposition_13_(1978) https://en.wikipedia.org/wiki/California_Proposition_13_(197...
- simoncion 11y ago
  Yep. There needs to be some careful, real, honest thought put into it, but I'm strongly of the opinion that Prop 13 needs to be repealed, yesterday, with an allowance for a -say- ten-year gradual ramp-up in assessed property values for landowners who own a property for their use and/or the use of their family. Real estate investors and non-human owners can go take a hike. ;)
  - faster 11y ago
    What about retired people? A friend's single mom paid off her house 35 years ago in a relatively poor neighborhood in southern California. She worked as many jobs as she could to do that, all would be considered menial today; laundry, sewing, cleaning houses. That area is now expensive enough that even with Prop 13 her children have to pay her property taxes for her. Her family, friends, church, etc. are all there, so it's not a trivial thing for her to move someplace cheaper (which would be at least 50 miles away, not a reasonable bus ride in that area).
    - slyall 11y ago
      1. After a hard life she is now a millionaire 2. Assuming she is living almost alone she probably doesn't want a [big] house and could move into a smaller unit nearby (and have some money left over) 3. But, there probably are not any smaller units since zoning effectively blocked them being built.
      - 11y ago

kspaans 11y ago

Devil's advocate: you think your landlord should be allowed to double your rent at the end of your lease? (If they can choose to not continue the lease and evict you, I guess it's the same thing.) In Ontario, for example, there is essentially an inflation-adjusted rate that landlords are allowed to increase their rent by every year (http://www.landlordselfhelp.com/RentIncreaseGuideline.htm http://www.landlordselfhelp.com/RentIncreaseGuideline.htm) without prior approval. I'm sure there are many flavours of rent control, tilting either towards landlords or tenants.

forrestthewoods 11y ago
Of course I do. You had a lease for a negotiated price for a year. That year ended. Now you can negotiate a new price based on current market conditions. A co-worker got tired of moving every year due several years in a row of homeowners wanted to sell their house when his lease ended. So he asked to sign a two year lease. The homeowner said no. Then he offered an extra $200 a month and two years. And the homeowner said yes. Voila! I work at a small company (<20) and we're looking for new office space. For some locations we can lock-in a pretty good price if we're willing to sign a 5-year lease.
- 6t6t6 11y ago
  That would allow a really dangerous behavior: the landlords would put flats under the market price, in order to get new tenants, and after one year living there (furniture bought, new friends, school for the children, etc.) the landlords would be able to rise the fee as much as they want. The situations where there's an asymmetrical negotiation like landlords-tenants or employer-employee must be regulated by law in order to make them fair. Law, not wealth, should give rights the people.
  - adventured 11y ago
    The majority of the US has had free market pricing for renting for two centuries, and the scheme you're describing has historically been the extreme rarity, not the common. Further, in a market system there's no such thing as: "landlords would be able to rise the fee as much as they want." Not even close. I don't believe anyone can fail to understand what happens next when a landlord tries to command ten times their prior rent. People are not hostages, they move.

Ankaios 11y ago

Mountain View doesn't have rent control.

forrestthewoods 11y ago
Mountain View is part of a ecosystem that does. And they're covered by prop 13 which is what directly incentivizes commercial over residential.
- deleted 11y ago
  [deleted]
- gozo 11y ago
  Seem more like your injecting you pet issue into the conversation than any sort real analysis. Why would i even matter? Any single issue is hugely overshadowed by the reality of rapid growth in demand.

khuey 11y ago

The preference for commercial zoning is a quirk of California law. California cities are allowed to tax people based on where they work, but not where they sleep. Payroll taxes are fine but income taxes are forbidden by state law.

Johnny555 11y ago

Few small cities in the Bay Area have rent control ordnances, including Mountain View, which is the city that originally wanted Google to build all new offices and no residences. So no,it's not Rent Control that is driving commercial-only zoning restrictions. Perhaps it's the fact that commercial office tenants pay property taxes, but require few city services in return -- no schools, limited police and/or fire services, little demand for parks or recreational activities, etc. Even in SF, only buildings built prior to 1979 are covered under rent control rent restrictions, so rent control wouldn't affect new zoning decisions.