4 ms·

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 righ

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.
  - gowld 8y ago
    China does^Hdid this for real estate. https://www.forbes.com/sites/sarahsu/2017/03/21/good-news-for-chinese-homeowners-premier-li-offers-some-clarity-on-land-leases/#511e4ccc7b4a https://www.forbes.com/sites/sarahsu/2017/03/21/good-news-fo... "Last Wednesday, Premier Li Keqiang said a real estate protection provision that would ensure individual’s access to property under a 70-year lease would be renewed unconditionally is being drafted. This will help to quell ongoing fears that wealth garnered from one generation will be removed after the 70-year lease ends by the government. And while this does not address the fate of 20-year leases, the precedent set in Wenzhou may be replicated in other areas."
  - tacostakohashi 8y ago
    That's basically the Housing Development Board system in Singapore.
  - wahern 8y ago
    In Malaysia, Singapore, and Hong Kong (all common law jurisdictions) leaseholds are more common, I think, than freeholds, at least until very recently. Leasehold estates are commonly 99 years or less (50, 60, 75, etc). I don't know how well this works (I only have a superficial knowledge of the property market from my travels and relations) but I imagine it becomes a problem when you have major improvements. For example, imagine a condominium. As a political matter the government isn't going to kick out 100 tenants just because the leasehold on the land terminated. So I suspect that in terms of revenue the governments are no better off than relying on property taxes. In the few cases I'm personally familiar with the typical scenario seems to be that the government offers renewal terms at a highly discounted rate a couple of decades before the lease expires. It seems like a pointless contrivance. Certainly freeholds are nicer from the perspective of efficient markets because you don't have arbitrary dates to contend with. Imagine trying to sell land with only 10 years remaining on the leasehold. The seller can expect very little, which is to be expected and not per se problematic. But more importantly 10 years limits the types of things you can use the land for, especially if you're risk averse. In general buyers will find it difficult to find land with a remaining term long enough to recapture the value of improvements, so liquidity would suffer significantly. Seems to me property taxes are a much simpler, more consistent, and theoretically fairer way for governments to capture the value of land. And that's ignoring Henry George-style land-value taxes. I suppose leaseholds may make it easier for governments to actually kick people off land if they're committed to doing so. The end of the lease is a nice, neutral date to implement some difficult policy objective.
    - lr4444lr 8y ago
      What is the typical term length on mortgages there? If someone needs to refi when there are too few years on the lease than the person can come up with in principal for that many years, there's going to be some serious pain all around.
      - wahern 8y ago
        That's a great point. I don't know enough to answer, though. Here's a short, interesting article a quick Google search found: https://www.straitstimes.com/singapore/housing/understanding-what-happens-at-the-end-of-a-99-year-lease https://www.straitstimes.com/singapore/housing/understanding... What caught my eye was "And when the flat reaches 69 years, CPF savings cannot be used to finance the mortgages." CPF is the mandatory savings program, sort of like Social Security and Medicare, except you can borrow against it. So basically if there's only 30 years left on a leasehold you can't borrow against your CPF account. My guess is that as the leasehold nears expiry your ability to securitize simply goes down to nothing, probably long before termination. And even before then you probably start paying a premium because if you default the bank is stuck with a rapidly depreciating asset. From what little I've gleaned from my travels and from the academic literature, I think Americans enjoy an exceptionally liquid property market and efficient financing market, particularly for residential property.
- gowld 8y ago
  Only until the law gets changed to remove the perpetuity of real property rights. Real estate (and airwaves, and any limited resource) should be auctioned by the state for limited periods of time.
  - tacostakohashi 8y ago
    This happens to some extent in some places - e.g., a large amount of private apartments in Singapore are built in 99 year ground leases. The problem is that you end up with a 50 year old building that is falling apart and should be redeveloped, but it's not worth it on a 50 year lease, or you need to negotiate a complicated and expensive lease top-up. Lots of important land uses like airports, factories, train stations require huge investment with returns spread over decades or centuries, it would be harder to get people to make these investments on leased land.
  - mobilefriendly 8y ago
    Wow that's full blown communism 2.0. Why do you assume politicians rigging auctions and controlling all property would produce a more stable or honest system for allocating scarce resources?
  - selectodude 8y ago
    Go move to China, then.
  - lr4444lr 8y ago
    Airwaves are not owned. They are leased. Real property is core to human freedom since the Magna Carta at least. You have no idea what unintended consequences you're stirring up by overturning this.
    - gowld 8y ago
      We don't live in the 13th Century anymore, and we don't live under a monarch anymore. Laws that make sense in the monarchy frontier don't make sense in a crowded finite space. It seems you have no idea what unintended consequences you're preserving by staying beholden to an ancient status quo.
- ubernostrum 8y ago
  Even in politically-conservative parts of the US where rent control is an unthinkable idea, there are plenty of situations where a tenant's rights "win" against the property owner's rights. The law generally -- and correctly -- recognizes that making someone homeless is a very serious thing, and should not be done on a mere whim, no matter how much someone might want to argue that as a property owner their whims are sacred.
JamesBarney 8y ago
It's usually home and condo owners who oppose density increases not landlords.
telchar 8y ago
I'd suggest that a solution to the demand problem is basic income. Let those who can and want to move out to the sticks and live on UBI. There are a nearly unlimited number of places with low cost of living and ample or potentially ample housing. Why does everyone want to move to SF and NY? It's not the poop on the sidewalk, it's mostly the jobs. Fewer people having to move to big cities for work (especially those who prefer the country) means less housing pressure. I think UBI would significantly help relieve housing pressure in large metro areas and perhaps help revitalize some currently-dying small towns and rural areas, which after all will need more services with increased population.
- linkregister 8y ago
  You vastly underestimate most people's desire to stay in the same place. Most Americans don't relocate after they have children. Imagine yourself being retired, and learning that you have to move away from your friends and family due to a change in market conditions. Even places that are economically barren see people just go onto Social Security disability (perhaps a form of UBI) instead of moving to regions with jobs.
  - telchar 8y ago
    There are plenty of people who move to large cities for better jobs, these people could just remain in the town they already live in instead. The problem you point out then becomes a benefit. There are also people who move when they retire, or when they have kids. This could facilitate that happening earlier which would also reduce the pressure on housing in cities.

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.
- gowld 8y ago
  China does^Hdid this for real estate. https://www.forbes.com/sites/sarahsu/2017/03/21/good-news-for-chinese-homeowners-premier-li-offers-some-clarity-on-land-leases/#511e4ccc7b4a https://www.forbes.com/sites/sarahsu/2017/03/21/good-news-fo... "Last Wednesday, Premier Li Keqiang said a real estate protection provision that would ensure individual’s access to property under a 70-year lease would be renewed unconditionally is being drafted. This will help to quell ongoing fears that wealth garnered from one generation will be removed after the 70-year lease ends by the government. And while this does not address the fate of 20-year leases, the precedent set in Wenzhou may be replicated in other areas."
- tacostakohashi 8y ago
  That's basically the Housing Development Board system in Singapore.
- wahern 8y ago
  In Malaysia, Singapore, and Hong Kong (all common law jurisdictions) leaseholds are more common, I think, than freeholds, at least until very recently. Leasehold estates are commonly 99 years or less (50, 60, 75, etc). I don't know how well this works (I only have a superficial knowledge of the property market from my travels and relations) but I imagine it becomes a problem when you have major improvements. For example, imagine a condominium. As a political matter the government isn't going to kick out 100 tenants just because the leasehold on the land terminated. So I suspect that in terms of revenue the governments are no better off than relying on property taxes. In the few cases I'm personally familiar with the typical scenario seems to be that the government offers renewal terms at a highly discounted rate a couple of decades before the lease expires. It seems like a pointless contrivance. Certainly freeholds are nicer from the perspective of efficient markets because you don't have arbitrary dates to contend with. Imagine trying to sell land with only 10 years remaining on the leasehold. The seller can expect very little, which is to be expected and not per se problematic. But more importantly 10 years limits the types of things you can use the land for, especially if you're risk averse. In general buyers will find it difficult to find land with a remaining term long enough to recapture the value of improvements, so liquidity would suffer significantly. Seems to me property taxes are a much simpler, more consistent, and theoretically fairer way for governments to capture the value of land. And that's ignoring Henry George-style land-value taxes. I suppose leaseholds may make it easier for governments to actually kick people off land if they're committed to doing so. The end of the lease is a nice, neutral date to implement some difficult policy objective.
  - lr4444lr 8y ago
    What is the typical term length on mortgages there? If someone needs to refi when there are too few years on the lease than the person can come up with in principal for that many years, there's going to be some serious pain all around.
    - wahern 8y ago
      That's a great point. I don't know enough to answer, though. Here's a short, interesting article a quick Google search found: https://www.straitstimes.com/singapore/housing/understanding-what-happens-at-the-end-of-a-99-year-lease https://www.straitstimes.com/singapore/housing/understanding... What caught my eye was "And when the flat reaches 69 years, CPF savings cannot be used to finance the mortgages." CPF is the mandatory savings program, sort of like Social Security and Medicare, except you can borrow against it. So basically if there's only 30 years left on a leasehold you can't borrow against your CPF account. My guess is that as the leasehold nears expiry your ability to securitize simply goes down to nothing, probably long before termination. And even before then you probably start paying a premium because if you default the bank is stuck with a rapidly depreciating asset. From what little I've gleaned from my travels and from the academic literature, I think Americans enjoy an exceptionally liquid property market and efficient financing market, particularly for residential property.
gowld 8y ago
Only until the law gets changed to remove the perpetuity of real property rights. Real estate (and airwaves, and any limited resource) should be auctioned by the state for limited periods of time.
- tacostakohashi 8y ago
  This happens to some extent in some places - e.g., a large amount of private apartments in Singapore are built in 99 year ground leases. The problem is that you end up with a 50 year old building that is falling apart and should be redeveloped, but it's not worth it on a 50 year lease, or you need to negotiate a complicated and expensive lease top-up. Lots of important land uses like airports, factories, train stations require huge investment with returns spread over decades or centuries, it would be harder to get people to make these investments on leased land.
- mobilefriendly 8y ago
  Wow that's full blown communism 2.0. Why do you assume politicians rigging auctions and controlling all property would produce a more stable or honest system for allocating scarce resources?
- selectodude 8y ago
  Go move to China, then.
- lr4444lr 8y ago
  Airwaves are not owned. They are leased. Real property is core to human freedom since the Magna Carta at least. You have no idea what unintended consequences you're stirring up by overturning this.
  - gowld 8y ago
    We don't live in the 13th Century anymore, and we don't live under a monarch anymore. Laws that make sense in the monarchy frontier don't make sense in a crowded finite space. It seems you have no idea what unintended consequences you're preserving by staying beholden to an ancient status quo.
ubernostrum 8y ago
Even in politically-conservative parts of the US where rent control is an unthinkable idea, there are plenty of situations where a tenant's rights "win" against the property owner's rights. The law generally -- and correctly -- recognizes that making someone homeless is a very serious thing, and should not be done on a mere whim, no matter how much someone might want to argue that as a property owner their whims are sacred.

JamesBarney 8y ago

It's usually home and condo owners who oppose density increases not landlords.

telchar 8y ago

I'd suggest that a solution to the demand problem is basic income. Let those who can and want to move out to the sticks and live on UBI. There are a nearly unlimited number of places with low cost of living and ample or potentially ample housing. Why does everyone want to move to SF and NY? It's not the poop on the sidewalk, it's mostly the jobs. Fewer people having to move to big cities for work (especially those who prefer the country) means less housing pressure. I think UBI would significantly help relieve housing pressure in large metro areas and perhaps help revitalize some currently-dying small towns and rural areas, which after all will need more services with increased population.

linkregister 8y ago
You vastly underestimate most people's desire to stay in the same place. Most Americans don't relocate after they have children. Imagine yourself being retired, and learning that you have to move away from your friends and family due to a change in market conditions. Even places that are economically barren see people just go onto Social Security disability (perhaps a form of UBI) instead of moving to regions with jobs.
- telchar 8y ago
  There are plenty of people who move to large cities for better jobs, these people could just remain in the town they already live in instead. The problem you point out then becomes a benefit. There are also people who move when they retire, or when they have kids. This could facilitate that happening earlier which would also reduce the pressure on housing in cities.