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If the market rate for your apartment is double what you're paying (the landlord wouldn't double your rent if they couldn't get anyone to take it), you're trapp

If the market rate for your apartment is double what you're paying (the landlord wouldn't double your rent if they couldn't get anyone to take it), you're trapped in that apartment: You presumably can't get any other place, because they're all double the price you pay. Thus the landlord has no motivation to keep you there, and your landlord can screw you over in any number of ways without worrying about losing tenants -- because that's good for them! I used to think rent control was good, but the more I think about it, I worry about trapped tenants who can't get out of their situation financially. Thus I believe we need to worry about controlling the other factors in housing pricing, so that people can afford market rate, which surely includes making enough supply available at all rates: Luxury condos through to places minimum wage workers can afford.

ch4s3 11y ago
How do you "[control] the other factors in housing pricing ...making enough supply available" for low wage workers? How do you do that if luxury units only cost a fraction more to construct than low rent units? How do you induce, by policy the construction of affordable housing?
- simoncion 11y ago
  > How do you induce, by policy the construction of affordable housing? By making -as San Francisco does- a condition of the building permit that the developer either make X% of the newly constructed housing "affordable housing", or pay the city what it would cost the city to build that many units of "affordable housing". This is far from unprecedented. :)
  - forrestthewoods 11y ago
    How's that working out for San Francisco? Mandating some percent of units be "affordable" or charging various taxes which go towards building affordable is not unprecedented. But those strategies succeeding might be. ;)
    - intrasight 11y ago
      This was done in Toronto when I lived there in the 90s. And it appears to have been successful. Society benefits in many ways (including saving money) by not having poor people live in slums.
    - thedufer 11y ago
      > How's that working out for San Francisco? Kinda hard to tell, since they only allow a few new residential buildings to go up each year. If they didn't allow NIMBY interests to prevent _any_ housing from going up, we might actually see this in action and be able to tell.
    - simoncion 11y ago
      Like thedufer says, as soon as the real blockers to development get the fuck out of the way, we'll see how well Rent Stabilization and the "Affordable Housing" mandates work in SF. As it stands now, it's next to impossible to build in the city. Frankly, subsidized housing succeeds in many districts. Once SF and -more generally- the SFBA decide to stop lining the pockets of real estate speculators and investment firms and start building housing to meet the current and future demand, we'll see a change in the character of the area for the better.
- rahimnathwani 11y ago
  "How do you induce, by policy the construction of affordable housing?" Relax planning restrictions. Allow owners of single-family homes to demolish them and use the land for tall blocks of flats. If everyone could do this, supply would increase by 10x, and anyone making minimum wage or more could afford to live in SF.
  - danudey 11y ago
    What would happen is that developers would buy up blocks of housing, demolish them all, and build more luxury units. The average owner of a single-family home can't afford to demolish it and build a new block of flats. All this would accomplish is to make it financially feasible to buy up single-family homes and build more luxury units in them, concentrating even more wealth in the hands of property developers. This is basically exactly what's happening in Vancouver; build a condo tower that starts at $1m/unit, it gets bought by either the rich elite or property speculators (or individuals attempting to 'hide' their wealth in other countries), and then sits idle. Even with rent control, new housing being built is predominantly geared towards the upper class, or the top end of the upper middle class. Property values go up, and the only thing keeping rents even remotely reasonable is the rent controls. Then, because rent is controlled, property values are kept lower than they would otherwise be, because the 'buy-and-rent' landlords can't pay for a mortgage that costs less than market rates for rent, so fewer landlord tycoons buy as many units. This means lower mortgages and more supply for people who actually want to purchase a home and have actual security. Your proposal would still concentrate power in the hands of developers and landlords; developers would buy up all the houses that would sell, knock them down to build rental units, and then, if rents risked dropping 'too low', they'd stop building for a while and just hold on to the properties.
    - rahimnathwani 11y ago
      "All this would accomplish ... build more luxury units ... concentrating even more wealth in the hands of property developers." Building more units is the point. Having enough supply that anyone can afford (to rent) a place to live is the point. I don't see how concentration of wealth is relevant here. "This is basically exactly what's happening in Vancouver" Vancouver has plenty of undeveloped and underdeveloped land. Supply of residential units available for new renters is constrained by (1) rent controls, (2) NIMBYism preventing new homes near existing homes, (3) the city government not wanting to re-zone industrial land as residential. A luxury $1m condo isn't that price due to something inherent in the condo. It's due to its location and the supply/demand in the city. The same condo in Detroit wouldn't cost the same. Additional supply (of whatever types of units) would increase supply and, by definition, allow more people to afford to live in the area.
- kspaans 11y ago
  > if luxury units only cost a fraction more to construct Now there is an interesting point. If it's true does it mean that "rich" people are suckers paying 4x more for a house or apartment that cost barely any extra to build? Or that the building codes mean that a "modest" house costs a immodest sum to build. Probably something in between, but it sounds like the risk-reward ratio has been screwed up by the poor incentives in the valley. EDIT: OK, derp... The price difference is obviously because of the location premium.
kspaans 11y ago
I suppose if you are living somewhere where the market rate and the rate one tenant is paying have gotten that far out of whack, you probably have more problems than rent control. :)

ch4s3 11y ago

How do you "[control] the other factors in housing pricing ...making enough supply available" for low wage workers? How do you do that if luxury units only cost a fraction more to construct than low rent units? How do you induce, by policy the construction of affordable housing?

simoncion 11y ago
> How do you induce, by policy the construction of affordable housing? By making -as San Francisco does- a condition of the building permit that the developer either make X% of the newly constructed housing "affordable housing", or pay the city what it would cost the city to build that many units of "affordable housing". This is far from unprecedented. :)
- forrestthewoods 11y ago
  How's that working out for San Francisco? Mandating some percent of units be "affordable" or charging various taxes which go towards building affordable is not unprecedented. But those strategies succeeding might be. ;)
  - intrasight 11y ago
    This was done in Toronto when I lived there in the 90s. And it appears to have been successful. Society benefits in many ways (including saving money) by not having poor people live in slums.
  - thedufer 11y ago
    > How's that working out for San Francisco? Kinda hard to tell, since they only allow a few new residential buildings to go up each year. If they didn't allow NIMBY interests to prevent _any_ housing from going up, we might actually see this in action and be able to tell.
  - simoncion 11y ago
    Like thedufer says, as soon as the real blockers to development get the fuck out of the way, we'll see how well Rent Stabilization and the "Affordable Housing" mandates work in SF. As it stands now, it's next to impossible to build in the city. Frankly, subsidized housing succeeds in many districts. Once SF and -more generally- the SFBA decide to stop lining the pockets of real estate speculators and investment firms and start building housing to meet the current and future demand, we'll see a change in the character of the area for the better.
rahimnathwani 11y ago
"How do you induce, by policy the construction of affordable housing?" Relax planning restrictions. Allow owners of single-family homes to demolish them and use the land for tall blocks of flats. If everyone could do this, supply would increase by 10x, and anyone making minimum wage or more could afford to live in SF.
- danudey 11y ago
  What would happen is that developers would buy up blocks of housing, demolish them all, and build more luxury units. The average owner of a single-family home can't afford to demolish it and build a new block of flats. All this would accomplish is to make it financially feasible to buy up single-family homes and build more luxury units in them, concentrating even more wealth in the hands of property developers. This is basically exactly what's happening in Vancouver; build a condo tower that starts at $1m/unit, it gets bought by either the rich elite or property speculators (or individuals attempting to 'hide' their wealth in other countries), and then sits idle. Even with rent control, new housing being built is predominantly geared towards the upper class, or the top end of the upper middle class. Property values go up, and the only thing keeping rents even remotely reasonable is the rent controls. Then, because rent is controlled, property values are kept lower than they would otherwise be, because the 'buy-and-rent' landlords can't pay for a mortgage that costs less than market rates for rent, so fewer landlord tycoons buy as many units. This means lower mortgages and more supply for people who actually want to purchase a home and have actual security. Your proposal would still concentrate power in the hands of developers and landlords; developers would buy up all the houses that would sell, knock them down to build rental units, and then, if rents risked dropping 'too low', they'd stop building for a while and just hold on to the properties.
  - rahimnathwani 11y ago
    "All this would accomplish ... build more luxury units ... concentrating even more wealth in the hands of property developers." Building more units is the point. Having enough supply that anyone can afford (to rent) a place to live is the point. I don't see how concentration of wealth is relevant here. "This is basically exactly what's happening in Vancouver" Vancouver has plenty of undeveloped and underdeveloped land. Supply of residential units available for new renters is constrained by (1) rent controls, (2) NIMBYism preventing new homes near existing homes, (3) the city government not wanting to re-zone industrial land as residential. A luxury $1m condo isn't that price due to something inherent in the condo. It's due to its location and the supply/demand in the city. The same condo in Detroit wouldn't cost the same. Additional supply (of whatever types of units) would increase supply and, by definition, allow more people to afford to live in the area.
kspaans 11y ago
> if luxury units only cost a fraction more to construct Now there is an interesting point. If it's true does it mean that "rich" people are suckers paying 4x more for a house or apartment that cost barely any extra to build? Or that the building codes mean that a "modest" house costs a immodest sum to build. Probably something in between, but it sounds like the risk-reward ratio has been screwed up by the poor incentives in the valley. EDIT: OK, derp... The price difference is obviously because of the location premium.

kspaans 11y ago

I suppose if you are living somewhere where the market rate and the rate one tenant is paying have gotten that far out of whack, you probably have more problems than rent control. :)