4 ms·

It's incorrect to blame Facebook for the rising rents. The landlords' greed must be blamed.

by dxxvi 8y ago

JumpCrisscross 8y ago
> landlords' greed must be blamed Generally speaking, if a fragmented group (e.g. Silicon Valley land owners) is behaving in a cohesive way, greed probably isn't to blame. In this case, it's supply and demand. If rents were capped, we'd instead be talking about housing queues and quotas.
- TeMPOraL 8y ago
  What is then the proper name for market participants causing problems by doing what all homo economicus are doing, that is maximizing the amount of value they can capture instead of leaving some money on the table for others to take? Because I think this is what is meant when someone accuses of greed a large group of people.
  - JumpCrisscross 8y ago
    Human nature? Emergent behaviour? Natural consequence of the region's housing policies? Calling someone "greedy" works when it can shame them into submission. (For example, shaming a drug company's executives for dramatically raising a patented drug's price.) It doesn't work when the blame can be shared away. The other difference between demand driving prices versus sellers "greedily" increasing them is the risk of shortages. If the drugmaker from my prior example reduces prices, it probably won't cause a shortage. Capping housing prices in the Bay Area, on the other hand, would result in queues and quotas. Calling the Bay Area's landowners "greedy" isn't only ineffective, it's also inaccurate. If someone bought a house recently, they probably need to charge a high rent to cover their mortgage and property taxes.
    - TACIXAT 8y ago
      The people preventing new construction are greedy. They are dictating what others can and can't do with their land in order to protect their own interests. They get million dollar home values and everyone else is stuck with $3000+/mo rents.
  - jerf 8y ago
    They aren't "causing" the problems, though. They are, at most, selecting a manifestation. But if they out of the goodness of their heart cut prices, there's still a housing shortage, the underlying problem that will manifest one way or another. If "housing shortage" sounds neutral or preferable to you, try to imagine the human-interest sob stories that would be written about how long-time residents are preventing anyone from moving in, or how unfair it is that this person got one of the underpriced slots ("a white male Facebook engineer from out east") and this other person ("disadvantaged resident whose family has been in the area for two hundred years") didn't. To the extent the problem is "Stop sob stories being written about Silicon Valley", trading high rents for a housing shortage didn't solve the problem, just moved it around. Or how upset a lot of people would be if Facebook just leaves because they can't get enough housing. Cutting prices would also reduce the motivation for others to figure out how to build more housing, because the higher the rents get the bigger the prize is for building more housing. Trying to use price fixing to mask underlying problems has a long track record of failing to fix the underlying problem, and then creating problems of its own. (To be honest, "Facebook leaving" or some equivalently sized employer is the only real solution that's ever going to work out. I think a good case can be made that Silicon Valley the business is now simply physically too big to fit into Silicon Valley the geography. Even if density was increased to the requisite levels, that would cause its own problems that people would be complaining about with air quality, even worse traffic, etc.)
  - dtech 8y ago
    Why should they? I could ask you to take a 30% pay cut and you rightly would ignore my request, so why should landlords decrease rent? The solution when market price is out-of-whack is to solve the cause of that, not politely ask suppliers to change their prices or consumers what they are willing to pay.
jeffreyrogers 8y ago
I think you're simplifying too much. Someone is paying the landlord and vacancy is low. If the landlords charged less there would still be a housing problem.
mkirklions 8y ago
I always wonder why existing families didnt take advantage of the real estate boom. FB had obviously been growing for years. If you lived in an area for more than 5 years, you should probably stop renting. If you moved there and dont have a tech job? Whhyyyyyyyy? I cannot understand this issue, it seems everything was in place for this area to eliminate problems.
- tqi 8y ago
  Minimum wage jobs probably didn't pay enough to allow a person to save enough for a down payment on a home, even 10 years ago?
  - mkirklions 8y ago
    Yes, but its been 10 years of growth in this city and they are still making minimum wage? (no one really makes minimum wage) Lets be real here, isnt the problem that many people didnt save money and havnt developed their career over the last 10 years?
    - cgriswald 8y ago
      The positive and negative externalities of that growth are not shared equally. The real problem is that these 10 years of growth were not accompanied by enough growth in available housing. > Lets be real here, isnt the problem that many people didnt save money and havnt developed their career over the last 10 years? For the sake of argument, let's say this is a possibility for everyone. Let's say, despite high rents, everyone can save a certain amount each month. Let's say that every elementary school teacher can advance to being superintendent, and every automotive technician can eventually own his own shop or become a district manager of a chain. This wouldn't solve the problem. Then house prices would be even higher, and there would still not be enough housing.
      - mkirklions 8y ago
        >t's say this is a possibility for everyone. Let's say, despite high rents, everyone can save a certain amount each month. Let's say that every elementary school teacher can advance to being superintendent, and every automotive technician can eventually own his own shop or become a district manager of a chain. I thought we were talking about people making 8$/hr. An starting elementary teacher making 30k/yr or a tech making 40k/yr can save up for a downpayment. If they didnt, we know they spent it on new cars, clothes, iphones, etc... I have lived on 19k/yr for 2 people, its not only possible, but it seemed easy.
beamatronic 8y ago
The market rent for those could be $3000-$5000 but it’s currently $1100 and they are raising it to $1900. Is that really “greed”?

It's incorrect to blame Facebook for the rising rents. The landlords' greed must be blamed.

by dxxvi 8y ago

It's incorrect to blame Facebook for the rising rents. The landlords' greed must be blamed.

> landlords' greed must be blamed Generally speaking, if a fragmented group (e.g. Silicon Valley land owners) is behaving in a cohesive way, greed probably isn't to blame. In this case, it's supply and demand. If rents were capped, we'd instead be talking about housing queues and quotas.

TeMPOraL 8y ago
What is then the proper name for market participants causing problems by doing what all homo economicus are doing, that is maximizing the amount of value they can capture instead of leaving some money on the table for others to take? Because I think this is what is meant when someone accuses of greed a large group of people.
- JumpCrisscross 8y ago
  Human nature? Emergent behaviour? Natural consequence of the region's housing policies? Calling someone "greedy" works when it can shame them into submission. (For example, shaming a drug company's executives for dramatically raising a patented drug's price.) It doesn't work when the blame can be shared away. The other difference between demand driving prices versus sellers "greedily" increasing them is the risk of shortages. If the drugmaker from my prior example reduces prices, it probably won't cause a shortage. Capping housing prices in the Bay Area, on the other hand, would result in queues and quotas. Calling the Bay Area's landowners "greedy" isn't only ineffective, it's also inaccurate. If someone bought a house recently, they probably need to charge a high rent to cover their mortgage and property taxes.
  - TACIXAT 8y ago
    The people preventing new construction are greedy. They are dictating what others can and can't do with their land in order to protect their own interests. They get million dollar home values and everyone else is stuck with $3000+/mo rents.
- jerf 8y ago
  They aren't "causing" the problems, though. They are, at most, selecting a manifestation. But if they out of the goodness of their heart cut prices, there's still a housing shortage, the underlying problem that will manifest one way or another. If "housing shortage" sounds neutral or preferable to you, try to imagine the human-interest sob stories that would be written about how long-time residents are preventing anyone from moving in, or how unfair it is that this person got one of the underpriced slots ("a white male Facebook engineer from out east") and this other person ("disadvantaged resident whose family has been in the area for two hundred years") didn't. To the extent the problem is "Stop sob stories being written about Silicon Valley", trading high rents for a housing shortage didn't solve the problem, just moved it around. Or how upset a lot of people would be if Facebook just leaves because they can't get enough housing. Cutting prices would also reduce the motivation for others to figure out how to build more housing, because the higher the rents get the bigger the prize is for building more housing. Trying to use price fixing to mask underlying problems has a long track record of failing to fix the underlying problem, and then creating problems of its own. (To be honest, "Facebook leaving" or some equivalently sized employer is the only real solution that's ever going to work out. I think a good case can be made that Silicon Valley the business is now simply physically too big to fit into Silicon Valley the geography. Even if density was increased to the requisite levels, that would cause its own problems that people would be complaining about with air quality, even worse traffic, etc.)
- dtech 8y ago
  Why should they? I could ask you to take a 30% pay cut and you rightly would ignore my request, so why should landlords decrease rent? The solution when market price is out-of-whack is to solve the cause of that, not politely ask suppliers to change their prices or consumers what they are willing to pay.

jeffreyrogers 8y ago

I think you're simplifying too much. Someone is paying the landlord and vacancy is low. If the landlords charged less there would still be a housing problem.

mkirklions 8y ago

I always wonder why existing families didnt take advantage of the real estate boom. FB had obviously been growing for years. If you lived in an area for more than 5 years, you should probably stop renting. If you moved there and dont have a tech job? Whhyyyyyyyy? I cannot understand this issue, it seems everything was in place for this area to eliminate problems.

tqi 8y ago
Minimum wage jobs probably didn't pay enough to allow a person to save enough for a down payment on a home, even 10 years ago?
- mkirklions 8y ago
  Yes, but its been 10 years of growth in this city and they are still making minimum wage? (no one really makes minimum wage) Lets be real here, isnt the problem that many people didnt save money and havnt developed their career over the last 10 years?
  - cgriswald 8y ago
    The positive and negative externalities of that growth are not shared equally. The real problem is that these 10 years of growth were not accompanied by enough growth in available housing. > Lets be real here, isnt the problem that many people didnt save money and havnt developed their career over the last 10 years? For the sake of argument, let's say this is a possibility for everyone. Let's say, despite high rents, everyone can save a certain amount each month. Let's say that every elementary school teacher can advance to being superintendent, and every automotive technician can eventually own his own shop or become a district manager of a chain. This wouldn't solve the problem. Then house prices would be even higher, and there would still not be enough housing.
    - mkirklions 8y ago
      >t's say this is a possibility for everyone. Let's say, despite high rents, everyone can save a certain amount each month. Let's say that every elementary school teacher can advance to being superintendent, and every automotive technician can eventually own his own shop or become a district manager of a chain. I thought we were talking about people making 8$/hr. An starting elementary teacher making 30k/yr or a tech making 40k/yr can save up for a downpayment. If they didnt, we know they spent it on new cars, clothes, iphones, etc... I have lived on 19k/yr for 2 people, its not only possible, but it seemed easy.

beamatronic 8y ago

The market rent for those could be $3000-$5000 but it’s currently $1100 and they are raising it to $1900. Is that really “greed”?