9 ms·

I'm curious, and maybe this is not the right forum for this kind of discussion, but it seems to me at some level there's going to be a tradeoff between the abil

I'm curious, and maybe this is not the right forum for this kind of discussion, but it seems to me at some level there's going to be a tradeoff between the ability of current tenants to afford their current housing and newcomers to afford housing. In markets like NYC, where demand is ever-increasing and for various reasons supply cannot keep up with demand, maintaining rent-controlled apartments necessarily drives prices higher overall. This prices a large group of people (especially the working-class young) out of the market. At the same time, were landlords allowed to adjust to market at-will, people who potentially have lived in a community for decades could be displaced without notice. Both situations are undesirable, since it would seem that someone gets screwed either way. I've been wondering this for a while, but haven't come up with a satisfying answer: to what extent do people have the right to live in a given community? Does this depend on if people have lived in a community for some time? Does it only depend on whether they can afford to live there? I feel like these questions aren't black and white, but there's also no clear middle part I feel comfortable committing to.

busterarm 8y ago
Maybe New York City doesn't really need any more middle-class suburban white twenty/thirty-somethings.
- deleted 8y ago
  [deleted]
majormajor 8y ago
I'd ask a slightly different question: why is so much of our economic policy centered around new and higher paying jobs in a certain area, in disconnect with the current residents preferences for housing policy? It seems like these things are controlled by very different interests that end up fighting in ways that treat the non-high-income/wealthy existing residents as collateral damage. We want housing to be more affordable in LA, [a different but still local] we also want Amazon to come to town and bring in a bunch of new workers from out of town. Those two goals seems hard to reconcile.
- busterarm 8y ago
  I'm glad you are considering this and get it.
- taurath 8y ago
  Economic growth without a civic plan creates huge bubbles. The second growth slows in Seattle I can’t help but think the market will be flooded with units from people wanting to finally get out at the peak.
  - closeparen 8y ago
    You say this like it’s a drawback. “Flooded with units” would be amazing and it’s exactly the condition YIMBYs are trying to engineer, because being “flooded with units” (relative to current population) is affordability.
    - taurath 8y ago
      I did not mean to imply that! I’d love it in fact.
    - Spooky23 8y ago
      Or the hood. I remember driving through the Bronx with my dad in the 80s when he worked there. It looked like a war zone. Bubbles tend to pop, and bankrupt buildings get boarded up, not cheaper.
      - pcwalton 8y ago
        If that were true, downtown Detroit would still be as expensive as it was during the American auto boom.
        Spooky23 8y ago
        Detroit is a failed city. Half the city was abandoned and much of it burnt to a crisp.
      - 8y ago
sbenitoj 8y ago
All non-market pricing options (like rent control) are inherently arbitrary. Also frequently it’s property taxes that force people out of neighborhoods (eg their families own a place for years, and then the property values go up making it too expensive for them to live in). If property taxes were eliminated, this would displace fewer people. Naturally you don’t see any politicians talking about this since they don’t want to eliminate a source of revenue for the state — they’d rather blame Airbnb!
- higginsc 8y ago
  Except this is exactly what Prop 13 does in California, and it is incredibly damaging to housing and rental prices.
  - wahern 8y ago
    All market interventions have some cost. The idea is that the benefits exceed the costs. The notion that benefits can never exceed costs is wrong on its face but somehow its what everybody assumes. We live in very cynical times. Prop 13 wouldn't be so damaging if it were easier to build. Unfortunately Prop 13 incentives and/or minimizes the consequences of communities restricting development, so it had this weird feedback effect. Regulations have unintended consequences and so we should be rightly wary of them. But that reality shouldn't be dispositive on whether we should attempt them. Market dynamics are like gravity: you can't ignore gravity but gravity doesn't make human flight impossible, it just constrains the solution space. Arguing that we shouldn't attempt market interventions is like arguing that we shouldn't have attempted human flight because God didn't equip us with wings or that we should've waited around until we evolved wings.
- throwaway2048 8y ago
  Property taxes are one of the few ways you can concretely tax the wealth of people that hold large amounts of property for speculative purposes, its far too easy to play shell games with liquid money. If you eliminate property tax, or prevent it from rising, you make the absentee owner who only cares about a payoff 20 years from now leaving perfectly livable homes empty many magnitudes worse. (as evidenced by california)
eherot 8y ago
This is actually a key problem with using rent control as a primary means to achieve housing affordability. Rent control works as a way to soften the blow of large rent increases (like the kind you might see after a major building renovation), but it really only works as long as there are plenty of other units on the market so that when eviction inevitably does happen, the tenant has somewhere else to go that they can afford. The problem is, many cities like NYC and San Francisco are trying to have their cake and eat it to. Liberal residents want to keep their suburban-style single family neighborhoods while simultaneously appearing to care about skyrocketing rents. You simply cannot have it both ways. The ONLY viable solution is to relax the rules blocking the construction of new housing. SB827 in California, which would have overridden local zoning to legalize the construction of higher density buildings within walking distance of transit stops, was a valiant effort to do the right thing, but it failed because of a strong anti-development sentiment from anti-capitalist tenants rights groups and pro-housing-appreciation single family home owners (in a particularly absurd moment, the mayor of ultra-tony Beverly Hills, which has built almost no new housing in the last few years, claimed to be against the bill because he was concerned about all of the "luxury housing" it would build in his town).
- CPLX 8y ago
  > cities like NYC and San Francisco are trying to have their cake and eat it to. Liberal residents want to keep their suburban-style single family neighborhoods while simultaneously appearing to care about skyrocketing rents. Those two cites are not the same at all. NYC has few suburban style neighborhoods and the ones we do have aren't that relevant to these discussions. New York is at least somewhat functional as a large city, and can and does permit the building of massive amounts of high rise residential development. From where I stand in downtown Brooklyn, the skyline has become nearly unrecognizable in recent years. And predictably, rents are starting to fall noticeably. San Francisco doesn't operate this way at all.
  - eherot 8y ago
    New York is nowhere near as bad as San Francisco when it comes to permitting, and it does have more parcels where height is not significantly limited, but it still builds far less housing than it needs to, and overly restrictive zoning is still basically the reason.
alex_young 8y ago
What right do owners of buildings have to dictate that long term renters move out or pay higher prices? The answer to this question, and to yours, is that rights are defined by laws, and laws are defined by the community. Yes, rent control exacerbates an already existing problem, but it doesn't create it. The same landlords who profit from the high prices of housing in our urban cores actively oppose new development because of that same reason. We can't solve this problem by banning rent control. The only way to solve a capacity problem: adjust supply or demand. I don't see demand changing anytime soon.
- lr4444lr 8y ago
  The fact that they own the building and the land deed. Tenant rights can be made strong, but property rights will always be stronger.
  - derefr 8y ago
    Is there a country that has tried "regular property rights, except for real-estate, which is owned entirely by the state and leased directly to its current tenants with no subleasing"? So e.g. an "apartment building" would be a building owned by the state, segmented into units, each of which would be rented from the state to individual tenants; and a "house" would be a building owned by the state with the whole thing rented to one tenant. In such a situation, there'd be no real real-estate speculation, and levels of rent-extraction above cost would be controlled by municipal bylaw (as they'd effectively be a tax.) Property development companies would all either be nationalized, or would be private government-exclusive subcontractors. Basically: imagine China, but instead of privatizing every industry all at once, they had kept construction and property management state-run. How would that look?
    - namibj 8y ago
      Maybe soviet Russia/GDR?
    - v_lisivka 8y ago
      You can fly to Russia or North Korea and see it by your own eyes. In short: very small and cheap apartments and lack of up-keeping.
sien 8y ago
> In markets like NYC, where demand is ever-increasing and for various reasons supply cannot keep up with demand, maintaining rent-controlled apartments necessarily drives prices higher overall. It's because of zoning. Allow more high rise to be built and allow more expansion and demand can be met. It's not some mystery. It's local laws that prevent people increasing height of buildings and prevent expanding the area. It's a problem that can be seen around the world due to similar planning laws in many places. See the Demographia report below: https://fcpp.org/wp-content/uploads/dhi2018-fcpp.pdf https://fcpp.org/wp-content/uploads/dhi2018-fcpp.pdf
- sien 8y ago
  Also look at how Houston has grown: http://www.harriscountytx.gov/CmpDocuments/74/Budget/FY18%20Population%20Report.pdf http://www.harriscountytx.gov/CmpDocuments/74/Budget/FY18%20... It's grown by 67% since 1990. Far greater than NYC or LA or SF in percentage terms. The other thing that should be mentioned is that Texas has fairly high property taxes. They also help.
  - mobilefriendly 8y ago
    Texas also has no state income tax, which also drives migration to the state.
- ex3ndr 8y ago
  In our platform (Openland, W18) we have identified a LOT of buildings that can be built up in SF and current laws allows this. This is not high rises, but you can upgrade from 1 story to 3-4 stories easily. But why this buildings are still single story? I suppose there are other problems like lengthy process of permitting (basically at least 1 year for issuing building permit) and entitlement (unpredictable). This huge delays reduces margins of a projects and in some cases they became unprofitable.
  - L_Rahman 8y ago
    You suppose there are other problems? That is the entire problem. The entire problem of building more dense housing - even 3-4 stories in SF is negotiating every single thing besides the literal physical feasibility of construction. If your startup doesn't think this is the key problem to solve, I'm not sure you have a complete grasp of what you're trying to do here.
jpao79 8y ago
Yup - in all seriousness, I would have thought most retired folks would just naturally gravitate toward lower cost areas with more pleasant climates such as Boca Raton. Or maybe Myrtle Beach if you still want to visit friends living in NYC...
JamesBarney 8y ago
I think in this case contemplating preferences might be more important than rights. How much do tenants actually value a guaranteed right to live in a given community? When we look at anywhere in the U.S. that isn't rent controlled, we figure out, it's not much at all. There is nothing illegal about signing a very long lease with a landlord. Commercial real estate contracts routinely include a a clause which allows tenants to extend a lease at a very similar price for many years in the future. Landlord would absolutely love to do leases like this. But the reason this doesn't exist in the non-commercial settings is because no one cares enough about living in a place long enough to actually pay for that option. Rent control only exists because its a a popular transfer of wealth, and is emotionally appealing, not because it actually makes people better off.
- bradleyjg 8y ago
  It’s only a transfer of wealth and the time it is enacted. The landlords that owned NYC real estate in 1974 lost the then net present value of the difference between the units they owned under a market rate regime and under the rate stabilization regime. Any landlord that acquired his property since then has lost nothing, and indeed would garner a windfall if rent stabilization were to be abolished.
  - JamesBarney 8y ago
    You're right. I wasn't super clear.
- gowld 8y ago
  Where can I sign a 20-year transferable lease?
  - JamesBarney 8y ago
    If you're in Houston I know plenty of landlords that would love to sign a lease like that with you.
- Spooky23 8y ago
jackcosgrove 8y ago
Prosaically, the elderly have higher voting rates than the young so they win this fight. Philosophically, I don't like placing two sympathetic groups on opposite sides of a scale and weighing them, because that's usually a false choice and there is some external factors unaccounted for that make the choice less normative. In the case of rent control, this externality is clearly that it depresses new unit construction, exacerbating the problem. So I oppose rent control.
hamandcheese 8y ago
My simple and possibly harsh viewpoint is that if you want to live somewhere forever, you better own the property you live on. I find measures to limit the amount that property tax can increase on a property you own and occupy much easier to stomach than measures like rent control.
- Eric_WVGG 8y ago
  I'd counter, if you don’t want to play fair with rent control laws, don’t be in the landlord business.
  - closeparen 8y ago
    Someone going into the landlord business is a renter’s only hope of having a place to live.
    - Eric_WVGG 8y ago
      I don’t understand this rejoinder. Are you suggesting that it’s impossible to be a responsible and law-abiding landlord? This city is full of landlords who got rich with the existing rent control system. It’s just preventing some of them from getting mega buck wild rich. So sad.
      - closeparen 8y ago
        When you disincentivize something, you get less of it. Cities are also full of condo conversions and units left empty because their owners responded rationally to society’s cry of “if you don’t like it, don’t be a landlord.” Not all, obviously, but every unit suppresssed costs something, and those costs have to be weighed against the benefits of the regulation.
deleted 8y ago
[deleted]
WhompingWindows 8y ago
You're not considering an important subset of renters. Consider the elderly, those who have lived in a given community for many years. They may not be driving anymore, everyone they know is around that neighborhood, their doctors, family, and their whole life. It'd be very heartless if it was possible for landlords to displace the old since they are unable to keep up with the market forces which demand 5% rent increases yearly.

busterarm 8y ago

Maybe New York City doesn't really need any more middle-class suburban white twenty/thirty-somethings.

deleted 8y ago
[deleted]

majormajor 8y ago

I'd ask a slightly different question: why is so much of our economic policy centered around new and higher paying jobs in a certain area, in disconnect with the current residents preferences for housing policy? It seems like these things are controlled by very different interests that end up fighting in ways that treat the non-high-income/wealthy existing residents as collateral damage. We want housing to be more affordable in LA, [a different but still local] we also want Amazon to come to town and bring in a bunch of new workers from out of town. Those two goals seems hard to reconcile.

busterarm 8y ago
I'm glad you are considering this and get it.
taurath 8y ago
Economic growth without a civic plan creates huge bubbles. The second growth slows in Seattle I can’t help but think the market will be flooded with units from people wanting to finally get out at the peak.
- closeparen 8y ago
  You say this like it’s a drawback. “Flooded with units” would be amazing and it’s exactly the condition YIMBYs are trying to engineer, because being “flooded with units” (relative to current population) is affordability.
  - taurath 8y ago
    I did not mean to imply that! I’d love it in fact.
  - Spooky23 8y ago
    Or the hood. I remember driving through the Bronx with my dad in the 80s when he worked there. It looked like a war zone. Bubbles tend to pop, and bankrupt buildings get boarded up, not cheaper.
    - pcwalton 8y ago
      If that were true, downtown Detroit would still be as expensive as it was during the American auto boom.
      - Spooky23 8y ago
        Detroit is a failed city. Half the city was abandoned and much of it burnt to a crisp.
    - 8y ago

sbenitoj 8y ago

All non-market pricing options (like rent control) are inherently arbitrary. Also frequently it’s property taxes that force people out of neighborhoods (eg their families own a place for years, and then the property values go up making it too expensive for them to live in). If property taxes were eliminated, this would displace fewer people. Naturally you don’t see any politicians talking about this since they don’t want to eliminate a source of revenue for the state — they’d rather blame Airbnb!

higginsc 8y ago
Except this is exactly what Prop 13 does in California, and it is incredibly damaging to housing and rental prices.
- wahern 8y ago
  All market interventions have some cost. The idea is that the benefits exceed the costs. The notion that benefits can never exceed costs is wrong on its face but somehow its what everybody assumes. We live in very cynical times. Prop 13 wouldn't be so damaging if it were easier to build. Unfortunately Prop 13 incentives and/or minimizes the consequences of communities restricting development, so it had this weird feedback effect. Regulations have unintended consequences and so we should be rightly wary of them. But that reality shouldn't be dispositive on whether we should attempt them. Market dynamics are like gravity: you can't ignore gravity but gravity doesn't make human flight impossible, it just constrains the solution space. Arguing that we shouldn't attempt market interventions is like arguing that we shouldn't have attempted human flight because God didn't equip us with wings or that we should've waited around until we evolved wings.
throwaway2048 8y ago
Property taxes are one of the few ways you can concretely tax the wealth of people that hold large amounts of property for speculative purposes, its far too easy to play shell games with liquid money. If you eliminate property tax, or prevent it from rising, you make the absentee owner who only cares about a payoff 20 years from now leaving perfectly livable homes empty many magnitudes worse. (as evidenced by california)

eherot 8y ago

This is actually a key problem with using rent control as a primary means to achieve housing affordability. Rent control works as a way to soften the blow of large rent increases (like the kind you might see after a major building renovation), but it really only works as long as there are plenty of other units on the market so that when eviction inevitably does happen, the tenant has somewhere else to go that they can afford. The problem is, many cities like NYC and San Francisco are trying to have their cake and eat it to. Liberal residents want to keep their suburban-style single family neighborhoods while simultaneously appearing to care about skyrocketing rents. You simply cannot have it both ways. The ONLY viable solution is to relax the rules blocking the construction of new housing. SB827 in California, which would have overridden local zoning to legalize the construction of higher density buildings within walking distance of transit stops, was a valiant effort to do the right thing, but it failed because of a strong anti-development sentiment from anti-capitalist tenants rights groups and pro-housing-appreciation single family home owners (in a particularly absurd moment, the mayor of ultra-tony Beverly Hills, which has built almost no new housing in the last few years, claimed to be against the bill because he was concerned about all of the "luxury housing" it would build in his town).

CPLX 8y ago
> cities like NYC and San Francisco are trying to have their cake and eat it to. Liberal residents want to keep their suburban-style single family neighborhoods while simultaneously appearing to care about skyrocketing rents. Those two cites are not the same at all. NYC has few suburban style neighborhoods and the ones we do have aren't that relevant to these discussions. New York is at least somewhat functional as a large city, and can and does permit the building of massive amounts of high rise residential development. From where I stand in downtown Brooklyn, the skyline has become nearly unrecognizable in recent years. And predictably, rents are starting to fall noticeably. San Francisco doesn't operate this way at all.
- eherot 8y ago
  New York is nowhere near as bad as San Francisco when it comes to permitting, and it does have more parcels where height is not significantly limited, but it still builds far less housing than it needs to, and overly restrictive zoning is still basically the reason.

alex_young 8y ago

What right do owners of buildings have to dictate that long term renters move out or pay higher prices? The answer to this question, and to yours, is that rights are defined by laws, and laws are defined by the community. Yes, rent control exacerbates an already existing problem, but it doesn't create it. The same landlords who profit from the high prices of housing in our urban cores actively oppose new development because of that same reason. We can't solve this problem by banning rent control. The only way to solve a capacity problem: adjust supply or demand. I don't see demand changing anytime soon.

lr4444lr 8y ago
The fact that they own the building and the land deed. Tenant rights can be made strong, but property rights will always be stronger.
- derefr 8y ago
  Is there a country that has tried "regular property rights, except for real-estate, which is owned entirely by the state and leased directly to its current tenants with no subleasing"? So e.g. an "apartment building" would be a building owned by the state, segmented into units, each of which would be rented from the state to individual tenants; and a "house" would be a building owned by the state with the whole thing rented to one tenant. In such a situation, there'd be no real real-estate speculation, and levels of rent-extraction above cost would be controlled by municipal bylaw (as they'd effectively be a tax.) Property development companies would all either be nationalized, or would be private government-exclusive subcontractors. Basically: imagine China, but instead of privatizing every industry all at once, they had kept construction and property management state-run. How would that look?
  - namibj 8y ago
    Maybe soviet Russia/GDR?
  - v_lisivka 8y ago
    You can fly to Russia or North Korea and see it by your own eyes. In short: very small and cheap apartments and lack of up-keeping.

sien 8y ago

> In markets like NYC, where demand is ever-increasing and for various reasons supply cannot keep up with demand, maintaining rent-controlled apartments necessarily drives prices higher overall. It's because of zoning. Allow more high rise to be built and allow more expansion and demand can be met. It's not some mystery. It's local laws that prevent people increasing height of buildings and prevent expanding the area. It's a problem that can be seen around the world due to similar planning laws in many places. See the Demographia report below: https://fcpp.org/wp-content/uploads/dhi2018-fcpp.pdf https://fcpp.org/wp-content/uploads/dhi2018-fcpp.pdf

sien 8y ago
Also look at how Houston has grown: http://www.harriscountytx.gov/CmpDocuments/74/Budget/FY18%20Population%20Report.pdf http://www.harriscountytx.gov/CmpDocuments/74/Budget/FY18%20... It's grown by 67% since 1990. Far greater than NYC or LA or SF in percentage terms. The other thing that should be mentioned is that Texas has fairly high property taxes. They also help.
- mobilefriendly 8y ago
  Texas also has no state income tax, which also drives migration to the state.
ex3ndr 8y ago
In our platform (Openland, W18) we have identified a LOT of buildings that can be built up in SF and current laws allows this. This is not high rises, but you can upgrade from 1 story to 3-4 stories easily. But why this buildings are still single story? I suppose there are other problems like lengthy process of permitting (basically at least 1 year for issuing building permit) and entitlement (unpredictable). This huge delays reduces margins of a projects and in some cases they became unprofitable.
- L_Rahman 8y ago
  You suppose there are other problems? That is the entire problem. The entire problem of building more dense housing - even 3-4 stories in SF is negotiating every single thing besides the literal physical feasibility of construction. If your startup doesn't think this is the key problem to solve, I'm not sure you have a complete grasp of what you're trying to do here.

jpao79 8y ago

Yup - in all seriousness, I would have thought most retired folks would just naturally gravitate toward lower cost areas with more pleasant climates such as Boca Raton. Or maybe Myrtle Beach if you still want to visit friends living in NYC...

JamesBarney 8y ago

I think in this case contemplating preferences might be more important than rights. How much do tenants actually value a guaranteed right to live in a given community? When we look at anywhere in the U.S. that isn't rent controlled, we figure out, it's not much at all. There is nothing illegal about signing a very long lease with a landlord. Commercial real estate contracts routinely include a a clause which allows tenants to extend a lease at a very similar price for many years in the future. Landlord would absolutely love to do leases like this. But the reason this doesn't exist in the non-commercial settings is because no one cares enough about living in a place long enough to actually pay for that option. Rent control only exists because its a a popular transfer of wealth, and is emotionally appealing, not because it actually makes people better off.

bradleyjg 8y ago
It’s only a transfer of wealth and the time it is enacted. The landlords that owned NYC real estate in 1974 lost the then net present value of the difference between the units they owned under a market rate regime and under the rate stabilization regime. Any landlord that acquired his property since then has lost nothing, and indeed would garner a windfall if rent stabilization were to be abolished.
- JamesBarney 8y ago
  You're right. I wasn't super clear.
gowld 8y ago
Where can I sign a 20-year transferable lease?
- JamesBarney 8y ago
  If you're in Houston I know plenty of landlords that would love to sign a lease like that with you.
Spooky23 8y ago

jackcosgrove 8y ago

Prosaically, the elderly have higher voting rates than the young so they win this fight. Philosophically, I don't like placing two sympathetic groups on opposite sides of a scale and weighing them, because that's usually a false choice and there is some external factors unaccounted for that make the choice less normative. In the case of rent control, this externality is clearly that it depresses new unit construction, exacerbating the problem. So I oppose rent control.

hamandcheese 8y ago

My simple and possibly harsh viewpoint is that if you want to live somewhere forever, you better own the property you live on. I find measures to limit the amount that property tax can increase on a property you own and occupy much easier to stomach than measures like rent control.

Eric_WVGG 8y ago
I'd counter, if you don’t want to play fair with rent control laws, don’t be in the landlord business.
- closeparen 8y ago
  Someone going into the landlord business is a renter’s only hope of having a place to live.
  - Eric_WVGG 8y ago
    I don’t understand this rejoinder. Are you suggesting that it’s impossible to be a responsible and law-abiding landlord? This city is full of landlords who got rich with the existing rent control system. It’s just preventing some of them from getting mega buck wild rich. So sad.
    - closeparen 8y ago
      When you disincentivize something, you get less of it. Cities are also full of condo conversions and units left empty because their owners responded rationally to society’s cry of “if you don’t like it, don’t be a landlord.” Not all, obviously, but every unit suppresssed costs something, and those costs have to be weighed against the benefits of the regulation.

deleted 8y ago

[deleted]

WhompingWindows 8y ago

You're not considering an important subset of renters. Consider the elderly, those who have lived in a given community for many years. They may not be driving anymore, everyone they know is around that neighborhood, their doctors, family, and their whole life. It'd be very heartless if it was possible for landlords to displace the old since they are unable to keep up with the market forces which demand 5% rent increases yearly.