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> As the result, available rental stock is minuscule Prove it. I see this argument all the time, the idea that somehow a massive global rise in the cost of re

by CPLX 10y ago

> As the result, available rental stock is minuscule Prove it. I see this argument all the time, the idea that somehow a massive global rise in the cost of residential real estate in important urban centers is "caused" by rent control, rather than a huge increase in inequality, the rise of a winner cities take all job market, or something else. I've lived in NYC for seventeen years, during which time rent stabilization policy has not changed much, but rental prices sure have. The (relatively tiny) core stock of regulated apartments is pretty similar to what it was when there were homeless encampments in Greenwich Village townhouses, yet people ignorantly shout "rent control" all the time. So we're sure rent control caused this? Is there rent control in London? What's happened there? Are you sure the problem isn't Snapchat payrolls, or rising film profits, or globally suppressed interest rates, or restrictions on Santa Monica building permits, or maybe even Airbnb listings? Why are you so sure? I have a degree in Economics and everything yet I'm quite a bit less certain.

stuaxo 10y ago
There is no rent control in London, rents have been going up and up. Only 10 year graph I could find is this: http://leftfootforward.org/images/2015/02/London-rents-and-wages.jpg http://leftfootforward.org/images/2015/02/London-rents-and-w... At the same time, lots of property is being built and left empty - https://www.theguardian.com/society/2016/feb/21/tens-thousands-london-homes-deemed-long-term-vacant https://www.theguardian.com/society/2016/feb/21/tens-thousan...
- MagnumOpus 10y ago
  London is hemmed in by the "Metropolitan Green Belt" which restricts building, and inside the belt housebuilding is very hard due to planning policy. House building in London is barely keeping step with the usual deterioration of the housing stock - let alone with the population growing by more than a million people in a decade. > lots of property is being built and left empty 8,000 properties empty for more than 2 years is nothing in the big scheme of things. It is maybe 0.2-0.3% of the housing stock. In fact, this is amazingly low.
- justincormack 10y ago
  There used to be rent control in London, back in the 1980s, there was a very small market for rentals that were not living in with the owner. There has been a huge increase in rentals since, partly caused by inequality and differential availability of mortgages, but removing rent control did help (and adding shorthold tenancy contracts).
eggy 10y ago
I don't think it is just rent control. You should know if you have a degree in Economics that if you release rent-control apartments to the market, they will seek the highest price they can fetch, but after a spike, the introduction of these apartments would dilute the market a bit. How much, I can't say, but certainly better than with rent control. And if you are from NY, you should know the difference between rent-stabilized and rent-controlled apartments. I have friends who had a rent-controlled loft in Tribeca for over 30 years way before Bobby DeNiro and company stepped in. My friends were both better off than I with one friend's parent subsidizing her to the tune of $20K to $30K per year many years after grad school too, so I rented in Brooklyn where I was born and raised below the poverty line. My friends were paying $875 per month at the time of exit in 2015, and it was somewhere around $450 back in the 80s even. They were able to take long vacations and return to their loft in Tribeca two or three times a year. A nice life if you can get it. I had lived in Manhattan a couple of times before, Hell's Kitchen, 4th floor walkup before all of the restaurants, and what were called 'yuppies' moved in in those days ;), but I then rented in Chelsea in a rent-controlled building, and became very good friends with about 6 of the elderly tenants. My apartment was rent-stabilized ($925/mo at first). I also befriended the landlord. He was running this and two other buildings, and he showed me the humongous boiler and the cost to trash the old one, and buy and install a new one. He knew if he fell behind, and if he didn't fix it, he could have the city come down on him and the public call him 'slumlord' for freezing elderly people in the winter. Most of the elderly were paying around $375 to $425 (1993 to 1997), and the boiler removal, new purchase and installation for one that size was going to be close to $150K. A large percentage of capital expenditure among other systems in a building this size, including two full-time maintenance men/tenants. I knew of two other couples in their thirties living illegally in their grandmother's apartments who they moved out to the burbs with their Mom & Dad. I could see both sides of the argument: The owner (don't like landlord) never tried to evict poor, old Ann, a former garment worker and WWII holocaust survivor, or the others. He looked for increases where he could get them to offset the long-term tenants paying so little. He had compassion (which is not Economics), but at the same time, he was looking at losses in this building cutting into his income. How come he has to support others and not be able to take sufficient self-interest to support himself and his family in any manner he sees fit? He knew about the others 'working the system'. Emotional arguments sway most people in purchases and social issues, and not intellect unfortunately. Elderly people wouldn't be helpless and poster children for rent control in their eighties and nineties, if they had to find more affordable housing in their forties or fifties. The problem gets extended and worsens when the root cause is ignored.
CalRobert 10y ago
It's complex. Rent control is part of it, but so are laws making it illegal to build nice neighborhoods by forcing urban sprawl, driving up the cost of existing nice ones * parking minimums * minimum area requirements * single-use zoning Also, local owners have a vest interested in voting to prohibit ANY new housing since it increases the value of their asset.
- CalRobert 10y ago
  Ugg. Vested Interest. Not vest interested.
jkot 10y ago
How about people living in bigger apartment they do not need? Or keeping an apartment, they only use for a few months every year? I lived in Prague when it had rent control. This was very common. There are other causes as well. But this is not a race, even if rent control contributes only 10% to the problem, it still contributes to the problem.
headShrinker 10y ago
I think it's clear there are a number of factors for the increase in rents. In NYC, globalization is a factor as an alarming amount of apartments are bought by companies or foreign investors. The apartments then sit empty. I think rent control and rent stabilization have an smaller effect. I say this as a rent stabilized renter. It can't be good if somewhat rent is 4 times less than some else's. I have a friend in a 2200 sf apartment on 5th ave and his rent stabilized lease is $2000 per month. Everyone else in that area is paying $15k per month. It's a common story in NYC. Also there is a huge demand and a huge wealth imbalance here and most everyone can't afford to buy. It's a very forced market.

by CPLX 10y ago

stuaxo 10y ago

There is no rent control in London, rents have been going up and up. Only 10 year graph I could find is this: http://leftfootforward.org/images/2015/02/London-rents-and-wages.jpg http://leftfootforward.org/images/2015/02/London-rents-and-w... At the same time, lots of property is being built and left empty - https://www.theguardian.com/society/2016/feb/21/tens-thousands-london-homes-deemed-long-term-vacant https://www.theguardian.com/society/2016/feb/21/tens-thousan...

MagnumOpus 10y ago
London is hemmed in by the "Metropolitan Green Belt" which restricts building, and inside the belt housebuilding is very hard due to planning policy. House building in London is barely keeping step with the usual deterioration of the housing stock - let alone with the population growing by more than a million people in a decade. > lots of property is being built and left empty 8,000 properties empty for more than 2 years is nothing in the big scheme of things. It is maybe 0.2-0.3% of the housing stock. In fact, this is amazingly low.
justincormack 10y ago
There used to be rent control in London, back in the 1980s, there was a very small market for rentals that were not living in with the owner. There has been a huge increase in rentals since, partly caused by inequality and differential availability of mortgages, but removing rent control did help (and adding shorthold tenancy contracts).

eggy 10y ago

I don't think it is just rent control. You should know if you have a degree in Economics that if you release rent-control apartments to the market, they will seek the highest price they can fetch, but after a spike, the introduction of these apartments would dilute the market a bit. How much, I can't say, but certainly better than with rent control. And if you are from NY, you should know the difference between rent-stabilized and rent-controlled apartments. I have friends who had a rent-controlled loft in Tribeca for over 30 years way before Bobby DeNiro and company stepped in. My friends were both better off than I with one friend's parent subsidizing her to the tune of $20K to $30K per year many years after grad school too, so I rented in Brooklyn where I was born and raised below the poverty line. My friends were paying $875 per month at the time of exit in 2015, and it was somewhere around $450 back in the 80s even. They were able to take long vacations and return to their loft in Tribeca two or three times a year. A nice life if you can get it. I had lived in Manhattan a couple of times before, Hell's Kitchen, 4th floor walkup before all of the restaurants, and what were called 'yuppies' moved in in those days ;), but I then rented in Chelsea in a rent-controlled building, and became very good friends with about 6 of the elderly tenants. My apartment was rent-stabilized ($925/mo at first). I also befriended the landlord. He was running this and two other buildings, and he showed me the humongous boiler and the cost to trash the old one, and buy and install a new one. He knew if he fell behind, and if he didn't fix it, he could have the city come down on him and the public call him 'slumlord' for freezing elderly people in the winter. Most of the elderly were paying around $375 to $425 (1993 to 1997), and the boiler removal, new purchase and installation for one that size was going to be close to $150K. A large percentage of capital expenditure among other systems in a building this size, including two full-time maintenance men/tenants. I knew of two other couples in their thirties living illegally in their grandmother's apartments who they moved out to the burbs with their Mom & Dad. I could see both sides of the argument: The owner (don't like landlord) never tried to evict poor, old Ann, a former garment worker and WWII holocaust survivor, or the others. He looked for increases where he could get them to offset the long-term tenants paying so little. He had compassion (which is not Economics), but at the same time, he was looking at losses in this building cutting into his income. How come he has to support others and not be able to take sufficient self-interest to support himself and his family in any manner he sees fit? He knew about the others 'working the system'. Emotional arguments sway most people in purchases and social issues, and not intellect unfortunately. Elderly people wouldn't be helpless and poster children for rent control in their eighties and nineties, if they had to find more affordable housing in their forties or fifties. The problem gets extended and worsens when the root cause is ignored.

CalRobert 10y ago

It's complex. Rent control is part of it, but so are laws making it illegal to build nice neighborhoods by forcing urban sprawl, driving up the cost of existing nice ones * parking minimums * minimum area requirements * single-use zoning Also, local owners have a vest interested in voting to prohibit ANY new housing since it increases the value of their asset.

CalRobert 10y ago
Ugg. Vested Interest. Not vest interested.

jkot 10y ago

How about people living in bigger apartment they do not need? Or keeping an apartment, they only use for a few months every year? I lived in Prague when it had rent control. This was very common. There are other causes as well. But this is not a race, even if rent control contributes only 10% to the problem, it still contributes to the problem.

headShrinker 10y ago

I think it's clear there are a number of factors for the increase in rents. In NYC, globalization is a factor as an alarming amount of apartments are bought by companies or foreign investors. The apartments then sit empty. I think rent control and rent stabilization have an smaller effect. I say this as a rent stabilized renter. It can't be good if somewhat rent is 4 times less than some else's. I have a friend in a 2200 sf apartment on 5th ave and his rent stabilized lease is $2000 per month. Everyone else in that area is paying $15k per month. It's a common story in NYC. Also there is a huge demand and a huge wealth imbalance here and most everyone can't afford to buy. It's a very forced market.