6 ms·

What about the benefit of actual living quarters for the tenants? Who besides a landlord is going to rent 4 walls and a roof to someone who needs it? Seems si

by ColanR 8y ago

What about the benefit of actual living quarters for the tenants? Who besides a landlord is going to rent 4 walls and a roof to someone who needs it? Seems similar to saying that hotel owners 'contribute nothing to the general welfare'.

TheOtherHobbes 8y ago
https://en.wikipedia.org/wiki/Public_housing https://en.wikipedia.org/wiki/Public_housing
- ColanR 8y ago
  That's just a case where the government is the landlord.
thereisnospork 8y ago
Well the landlord's contribution is maintenance and matchmaking. The problem is that the fair economic value of maintenance and matchmaking, plus construction (labor, materials, design, oversight, etc.) when amortized monthly is far less than the average SF rent of 2-4 thousand dollars a month.
- ColanR 8y ago
  Isn't the problem in SF that the wages have gone up hugely for a small subset of the population? If that's the case, then the landlord is just following a standard negotiation tactic [1], since this is their livlihood. [1] https://www.monster.com/career-advice/article/dont-leave-money-on-the-table-hot-jobs https://www.monster.com/career-advice/article/dont-leave-mon...
  - thereisnospork 8y ago
    > Isn't the problem in SF that the wages have gone up hugely for a small subset of the population? Wages of the renting population is irrelevant to the 'fair economic price1' of an apartment. The equilibrium/fair cost of a latte doesn't go up because a few millionaires move into a neighborhood, it might go up because of a barista labor-shortage, a coffee bean-tariff, or other supply-side effect. You're not wrong that the rent prices are being driven up because there is an influx of wealth to a subset, but the core problem is that the supply is artificially constrained. If you put a quota on lattes sold in our hypothetical neighborhood, only the rich will be able to drink them - and will pay 'rich people prices' to ensure they can (or if you prefer, Starbucks will maximize its profit in the latte constrained environment. Let Starbucks serve all the lattes it wants, and prices will stay more or less constant. 1 to be specific, the fair economic price is the breakeven + opportunity cost (profit!) to build an operate an apartment building, which can be amortized to a monthly rent per unit that would be required in order to make building the apartment worth while to the builder, architect, et al. In SF, and much of the Bay Area, monthly rents far exceed this value - which if SF was a functioning market would drive the construction of more apartments driving rents down towards their fair economic price.
    - ColanR 8y ago
      Well, it seems like you're making an assumption about the 'opportunity cost' of building/operating the apartment building, that it's grown far less than the wages. If your argument (that rental costs are too high) rests on that assumption, seems like it should be addressed and backed up. I am curious, though, about the artificial constraint you mentioned. Don't know what you're specifically referring to, would like to know more.
      - thereisnospork 8y ago
        My analysis is a top-down one, In summary: rents in SF/Bay area are 3-4k for new construction 1 bedroom, which is say double Chicago or Houston, and much more even than the Bay Area 10 or 15 years ago. So it reasons that at the prices being paid, people should be able to build profitably. That they aren't implies they can't or have onerous restrictions. For fun, take a (google maps) walk around SF or downtown Oakland and count the single-family homes, parking lots, and vacant lots that, at least mechanically, could easily be turned into very profitable apartments - yet aren't. > I am curious, though, about the artificial constraint you mentioned. Don't know what you're specifically referring to, would like to know more. Restrictive zoning, planning commissions, NIMBYs, activist groups (historical societies, environmental groups,), onerous and vague regulations1 (that can be easily challenged in court.) for a few examples. All serve to both make development costs increase and project success uncertain. 1 e.g. Regulations should exist that require buildings to be earthquake safe (environmentally friendly, etc.), but said regulations should also provide concrete metrics to define 'earthquake safe' otherwise nothing stops lawsuits alleging a failure to properly design a building to be earthquake safe -- which costs a lot of money and time.
        ColanR 8y ago
        Well, I don't disagree with either of those points. :) Thanks for the elucidation.
        njarboe 8y ago
        You should take a walk around downtown Oakland. Most of the parking lots have turned into construction sites over the last 3 or 4 years. Not many tear downs happening yet(a few, like an Acura dealership across from Whole Foods getting torn down and a ~20 story apt building going up in its place), but this boom has gone on so long that the NIMBYs have finally gotten tired and thousands of apartments will be coming on the market in Oakland pretty soon. As a long time home owner in the area I like how this is finally happening after decades of people thinking an Oakland revival was just around the corner. Most of the companies doing the construction are from out of state. Maybe they just didn't know it was impossible to build in Oakland, saw the huge potential profits, and went for it.
- mcguire 8y ago
  Unfortunately, in the modern American economic system, prices are set by what consumers are willing to spend (assuming that is above what producers need to ask) rather than whatever "fair economic value" is.
landryraccoon 8y ago
> What about the benefit of actual living quarters for the tenants? Would you argue that patents and copyright should last infinitely long because the world is richer forever due to the one solitary act of the inventor? Landlords hold a monopoly over the land they own as much as copyright holders own a monopoly on the IP they own. I think it's quite reasonable to ask if that monopoly deserves to be forever. I agree with you that someone who develops property deserves to be rewarded - but maybe not an infinite reward?
- ColanR 8y ago
  If I'm understanding you correctly, you're advocating for the landlord to lose ownership of their property? If so, question of my own. The landlord worked and spent resources (time, money) to increase his assets (develop the property). You, at your job, worked and spent resources (time, etc.) to increase your assets (e.g. size of your bank account). Do you think you should have indefinite ownership of your bank account?
  - claudiawerner 8y ago
    A key idea here is the distinction between what many consider to be personal property (one's toothbrush and probably bank account and house) and private property, which is used to the ends of profit or production otherwise, in older terms, production of surplus value. Land is an interesting case that cannot be compared to bank accounts also because it's a finite natural resource, in some sense still only given only by permission of the state, which represents the people (or it is supposed to do so anyway). From Proudhon's What Is Property? (1840): >Let us complete the argument of M. Ch. Comte. A man who should be prohibited from walking in the highways, from resting in the fields, from taking shelter in caves, from lighting fires, from picking berries, from gathering herbs and boiling them in a bit of baked clay, — such a man could not live. Consequently the earth — like water, air, and light — is a primary object of necessity which each has a right to use freely, without infringing another’s right. Why, then, is the earth appropriated? >Water, air, and light are common things, not because they are inexhaustible, but because they are indispensable; and so indispensable that for that very reason Nature has created them in quantities almost infinite, in order that their plentifulness might prevent their appropriation. Likewise the land is indispensable to our existence, — consequently a common thing, consequently insusceptible of appropriation; but land is much scarcer than the other elements, therefore its use must be regulated, not for the profit of a few, but in the interest and for the security of all. In a word, equality of rights is proved by equality of needs. Now, equality of rights, in the case of a commodity which is limited in amount, can be realized only by equality of possession.

by ColanR 8y ago

TheOtherHobbes 8y ago

https://en.wikipedia.org/wiki/Public_housing https://en.wikipedia.org/wiki/Public_housing

ColanR 8y ago
That's just a case where the government is the landlord.

thereisnospork 8y ago

Well the landlord's contribution is maintenance and matchmaking. The problem is that the fair economic value of maintenance and matchmaking, plus construction (labor, materials, design, oversight, etc.) when amortized monthly is far less than the average SF rent of 2-4 thousand dollars a month.

ColanR 8y ago
Isn't the problem in SF that the wages have gone up hugely for a small subset of the population? If that's the case, then the landlord is just following a standard negotiation tactic [1], since this is their livlihood. [1] https://www.monster.com/career-advice/article/dont-leave-money-on-the-table-hot-jobs https://www.monster.com/career-advice/article/dont-leave-mon...
- thereisnospork 8y ago
  > Isn't the problem in SF that the wages have gone up hugely for a small subset of the population? Wages of the renting population is irrelevant to the 'fair economic price1' of an apartment. The equilibrium/fair cost of a latte doesn't go up because a few millionaires move into a neighborhood, it might go up because of a barista labor-shortage, a coffee bean-tariff, or other supply-side effect. You're not wrong that the rent prices are being driven up because there is an influx of wealth to a subset, but the core problem is that the supply is artificially constrained. If you put a quota on lattes sold in our hypothetical neighborhood, only the rich will be able to drink them - and will pay 'rich people prices' to ensure they can (or if you prefer, Starbucks will maximize its profit in the latte constrained environment. Let Starbucks serve all the lattes it wants, and prices will stay more or less constant. 1 to be specific, the fair economic price is the breakeven + opportunity cost (profit!) to build an operate an apartment building, which can be amortized to a monthly rent per unit that would be required in order to make building the apartment worth while to the builder, architect, et al. In SF, and much of the Bay Area, monthly rents far exceed this value - which if SF was a functioning market would drive the construction of more apartments driving rents down towards their fair economic price.
  - ColanR 8y ago
    Well, it seems like you're making an assumption about the 'opportunity cost' of building/operating the apartment building, that it's grown far less than the wages. If your argument (that rental costs are too high) rests on that assumption, seems like it should be addressed and backed up. I am curious, though, about the artificial constraint you mentioned. Don't know what you're specifically referring to, would like to know more.
    - thereisnospork 8y ago
      My analysis is a top-down one, In summary: rents in SF/Bay area are 3-4k for new construction 1 bedroom, which is say double Chicago or Houston, and much more even than the Bay Area 10 or 15 years ago. So it reasons that at the prices being paid, people should be able to build profitably. That they aren't implies they can't or have onerous restrictions. For fun, take a (google maps) walk around SF or downtown Oakland and count the single-family homes, parking lots, and vacant lots that, at least mechanically, could easily be turned into very profitable apartments - yet aren't. > I am curious, though, about the artificial constraint you mentioned. Don't know what you're specifically referring to, would like to know more. Restrictive zoning, planning commissions, NIMBYs, activist groups (historical societies, environmental groups,), onerous and vague regulations1 (that can be easily challenged in court.) for a few examples. All serve to both make development costs increase and project success uncertain. 1 e.g. Regulations should exist that require buildings to be earthquake safe (environmentally friendly, etc.), but said regulations should also provide concrete metrics to define 'earthquake safe' otherwise nothing stops lawsuits alleging a failure to properly design a building to be earthquake safe -- which costs a lot of money and time.
      - ColanR 8y ago
        Well, I don't disagree with either of those points. :) Thanks for the elucidation.
      - njarboe 8y ago
        You should take a walk around downtown Oakland. Most of the parking lots have turned into construction sites over the last 3 or 4 years. Not many tear downs happening yet(a few, like an Acura dealership across from Whole Foods getting torn down and a ~20 story apt building going up in its place), but this boom has gone on so long that the NIMBYs have finally gotten tired and thousands of apartments will be coming on the market in Oakland pretty soon. As a long time home owner in the area I like how this is finally happening after decades of people thinking an Oakland revival was just around the corner. Most of the companies doing the construction are from out of state. Maybe they just didn't know it was impossible to build in Oakland, saw the huge potential profits, and went for it.
mcguire 8y ago
Unfortunately, in the modern American economic system, prices are set by what consumers are willing to spend (assuming that is above what producers need to ask) rather than whatever "fair economic value" is.

landryraccoon 8y ago

> What about the benefit of actual living quarters for the tenants? Would you argue that patents and copyright should last infinitely long because the world is richer forever due to the one solitary act of the inventor? Landlords hold a monopoly over the land they own as much as copyright holders own a monopoly on the IP they own. I think it's quite reasonable to ask if that monopoly deserves to be forever. I agree with you that someone who develops property deserves to be rewarded - but maybe not an infinite reward?

ColanR 8y ago
If I'm understanding you correctly, you're advocating for the landlord to lose ownership of their property? If so, question of my own. The landlord worked and spent resources (time, money) to increase his assets (develop the property). You, at your job, worked and spent resources (time, etc.) to increase your assets (e.g. size of your bank account). Do you think you should have indefinite ownership of your bank account?
- claudiawerner 8y ago
  A key idea here is the distinction between what many consider to be personal property (one's toothbrush and probably bank account and house) and private property, which is used to the ends of profit or production otherwise, in older terms, production of surplus value. Land is an interesting case that cannot be compared to bank accounts also because it's a finite natural resource, in some sense still only given only by permission of the state, which represents the people (or it is supposed to do so anyway). From Proudhon's What Is Property? (1840): >Let us complete the argument of M. Ch. Comte. A man who should be prohibited from walking in the highways, from resting in the fields, from taking shelter in caves, from lighting fires, from picking berries, from gathering herbs and boiling them in a bit of baked clay, — such a man could not live. Consequently the earth — like water, air, and light — is a primary object of necessity which each has a right to use freely, without infringing another’s right. Why, then, is the earth appropriated? >Water, air, and light are common things, not because they are inexhaustible, but because they are indispensable; and so indispensable that for that very reason Nature has created them in quantities almost infinite, in order that their plentifulness might prevent their appropriation. Likewise the land is indispensable to our existence, — consequently a common thing, consequently insusceptible of appropriation; but land is much scarcer than the other elements, therefore its use must be regulated, not for the profit of a few, but in the interest and for the security of all. In a word, equality of rights is proved by equality of needs. Now, equality of rights, in the case of a commodity which is limited in amount, can be realized only by equality of possession.