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I'm shocked at the ideological fervor here and the fact that virtually no one seems to have looked at the details of the actual bill. This is nothing like the r

I'm shocked at the ideological fervor here and the fact that virtually no one seems to have looked at the details of the actual bill. This is nothing like the rent control ordinance in SF that has caused $3000 units to get stuck at $500 rents. That will never happen under this law. The allowable increases are so much higher than "normal" rent control laws that any given unit will catch up to market rates in a matter of years, at most. Whereas the laws we love to hate result in units getting stuck far below market for decades or even generations. The difference with this law is that a 20% rent hike will take 3-4 years to be implemented instead of 30 or 60 days. That difference, while not enough to allow all families to remain in place, will allow families time to adjust or move within a reasonable time frame. This law is different. If you want to complain about rent control in SF or NYC or elsewhere, have at it, but know that most of your complaints do not apply to this law.

throwaway5752 7y ago
This should be the top comment. The upshot is that if you are a family that is renting, you won't be forced out of your home on short notice. Try - for a moment - to imagine you are living close to your maximum expenses and your landlord increases your rent by 20% next year.
- m463 7y ago
  This happened to a family I know, except it was 50%. The building was purchased, "refurbished" and the rent was reset to a very high number.
  - optimusclimb 7y ago
    > The building was purchased, "refurbished" and the rent was reset to a very high number. And if someone was willing to pay that number, then that's what the place was worth.
    - anthony_doan 7y ago
      That doesn't help the housing issues... which is the whole point of this article and the comment your replied to. While what you're saying isn't false it's not going to solve anything. Unless you don't think there is a housing issue.
    - heyoni 7y ago
      Yea but moving as an individual is stressful and 10x moreso for families. We’re trying to keep people off the streets and from having to make bad decisions without hurting the landlords ability to capitalize on their investment. This is a compromise.
      - mratzloff 7y ago
        Not to mention a sudden, unexpected expense in a situation where renters are on a tight budget and likely don't have much or any savings.
        nostrebored 7y ago
        What are you talking about... One of the nicest things about being a renter is being able to choose to live in a place where you can get those savings.
        mratzloff 7y ago
        Spoken as if many people have a true choice about whether or not to rent.
        heyoni 7y ago
        That’s it. That’s all this is. The law is just regulating shitty behavior. But you always have those who say “well I can legally raise blah and if I don’t less money.” Well now they can’t. Good. We’ve made it slightly hard to be a major cunt.
        thaumasiotes 7y ago
  - rdtwo 7y ago
    A lot of units require seismic retrofitting and that’s super expensive. If you can’t pass that cost on a lot of these buildings won’t be retrofitted
- CryptoPunk 7y ago
  As counter-intuitive as it seems, this should happen. People should not look at rental property with no rent stabilization provision as a stable housing arrangement. If there is a sudden shortage in housing, we need prices to suddenly reflect that shortage, in order for people to be suddenly incentivised to and compensated for building housing to fill that shortage. Shortage is pain and rent control simply distributes that pain in a different way than the market would and does so in a way that reduces the ability of the market to gradually alleviate that pain. The more the government intervenes in rental contracts to mandate that they be like a lifetime lease agreement, the less incentives and sustenance there is to build a rental property overall. Society is better off having more rental units that have prices that are not legislatively stabilized than have a smaller supply of rental units with mandatorily stabilize prices. If someone wants stabilized rental prices and they should sign a lease agreement with the landlord that gives them that at the price of a slightly higher per month rental rate. These kinds of things should arranged by actors in the market rather than having the government ban all alternatives in order to force people into stabalized rent contracts.
joe_the_user 7y ago
Well, It's not entirely unreasonable to think landlords somewhere in the state will take this "5% + inflation" as automatically what's called-for. Conceivably a few landlords who otherwise would have held the line will do this. But given this was more or less already standard for the large landlords and given the landlords who have been really, really gouging, this sad collateral.
macspoofing 7y ago
So ... you are arguing rent control is good? Or that this isn't rent control? Or that some rent control is good, but more is really bad?
- ac29 7y ago
  The point was that this CA statewide bill is quite different from places like SF. New state law: 5% + inflation SF: 60% of inflation. This has has never been over 2.9% a year since the law changed in 1992 from a fixed 4% [0]. I think one could sanely argue that allowing increases of up to 5% plus inflation is a suitable restriction, while limiting increases to significantly below inflation is not. [0] https://sfrb.org/sites/default/files/Document/Form/571%20Allowable%20Annual%20Increases%2019-20.pdf https://sfrb.org/sites/default/files/Document/Form/571%20All...
  - adamsb6 7y ago
    What if the market clearing price increases at greater than 5% plus inflation? This isn’t a free lunch, the tradeoff of a price cap is under provision of a good.
    - namesbc 7y ago
      We currently have a drastic under provision of a good to the tune of 3.5 million homes in CA alone. This under provision is not because building new homes isn't profitable, it is because realtors, landlords and homeowners are actively blocking new supply in order to extract above market rents from desperate people. Adding a rent cap of MORE THAN DOUBLE inflation will have no affect on supply, it is ridiculously profitable to rent out your property right now. CA would have to do something like cap rents at less than $500 per bedroom before profit margins would affect supply.
      - jjav 7y ago
        > it is ridiculously profitable to rent out your property right now I'd be curious if you can share specific numbers on where this is true? Where in CA can I buy a house/apt and rent it out for more than the mortgage+insurance+taxes+maintenance? A link to the MLS listing would be appreciated. Every now and then I look at housing costs vs. rental income to consider buying some investment property. But the numbers never work out, I'd always end up loosing money to rent it out.
jquery 7y ago
Are there any provisions for periods of high inflation in the market?
- WalterSear 7y ago
  The limit is 5% plus inflation.
SquishyPanda23 7y ago
> I'm shocked at the ideological fervor here Really? This is pretty common on HN. This is IMO one of its weaknesses. There are certain topics that bring out political rants. One is regulation and another is housing prices in the bay area. This story brings out both.
- quotemstr 7y ago
  >> I'm shocked at the ideological fervor here > Really? This is pretty common on HN. This is IMO one of its weaknesses. HN is heavily focused on the Bay Area. This fervor seems like a persistent feature of that region's culture and not HN in particular.
- t34543 7y ago
  Plastic, climate change, and identity politics also bring out radical behavior.
  - skybrian 7y ago
    Also, privacy and anything somehow related to Google or Facebook.
busterarm 7y ago
The rent control laws in NYC aren't even nearly as bad as SF, despite how much they get demonized here on HN. In NYC units that might be _actually cheap_, as in rent controlled and not stabilized, number roughly 17k units _in total_. And only about 1/3 of those are significantly below market or in desirable neighborhoods. It's almost insignificant and the number of rent controlled units has gone down by roughly HALF in the last 5 years, because the tenants in them are dying and income limits on any descendants usually kick the units out of being controlled into stabilized. NYC has a much larger number of rent stabilized units, which is somewhere near 1/3 of all available units that are renting at or below $2700 (twice the national average, btw). The overwhelming majority of these are within a few hundred dollars of market rate. There are about 4.2M housing units in NYC with roughly 30k being added every year. The "cheap" rent-controlled units are a rounding error. That is not anything like the situation folks in SF are rightfully railing against.
- irq11 7y ago
  The rent control laws in SF aren’t even as bad as HN comments would have you believe. Rent control doesn’t apply to new construction in SF. It also allows a regulated annual increase, and rent automatically jumps back up to market upon a number of different conditions - not the least of which is that the owner can push you out to renovate the building! HN commenters are usually just repeating stuff they heard somewhere, and have no idea what the laws actually say. Moreover, while there are indeed lots of publications on the theoretical impacts of rent control, few of those publications consider laws as they actually exist, or if they do, the scope of the impacts is rarely communicated when translated into HN talking points. Every study I’m aware of has shown, at worst, diffuse, long-term negative impacts to housing costs. Meanwhile, many of them do exactly what they set out to do: stabilize short-term prices for vulnerable populations. These laws are simply not the boogeymen that comments here make them seem.
  - refurb 7y ago
    Rent control in SF really is that bad. Rent increase limits are 60% of CPI, so it can’t even match inflation. If your costs go up (utilities) or you want to do capital improvements, good luck getting the rent board to approve a pass through. Want to prevent other people than the tenant from moving into a 1 bedroom? Tough, can’t say no to that, it just has to be under 3 people. Want to move into your own house? Sure, just pay the tenant a few tens of thousands in “pay off”. SF rent control is absolutely onerous and definitely shrinks the pool of potential landlords and thus potential units.
xenocyon 7y ago
The Urbanist has an article on how modern rent control proposals differ from older ones, and the ramifications thereof: https://www.theurbanist.org/2019/08/05/the-case-for-rent-control/ https://www.theurbanist.org/2019/08/05/the-case-for-rent-con...
seraphsf 7y ago
I agree with you. I’m renting out a previous condo, and as a landlord, this law strikes me as reasonable and measured. The market will still find its natural level. These controls merely dampen short-term shocks, allowing tenants and communities time to adjust as market conditions change.
- rjf72 7y ago
  To take the other side of the argument here I'm completely against this change but I'm happy that it passed. The reason is simple: without data we're all just speculating. If I'm correct, now I will have real bias-free (since we're looking at this exact location as opposed to other locations where rent control has had... issues) data to support my views. And of course only a fool would cling to certainty on issues this complex. It's very possible my views are wrong. And if they are then that's a great outcome. If they're not? Well the cost of this experiment is not going to be that big, and it can be reversed relatively easily. The one thing I think both sides often fail to do though is to set falsifiable metrics before running such an experiment. Take a group of qualified individuals against the program, and those for the program. And have them sit down and work out their expectations of the program. So for instance homelessness. The pro side probably expects this will cause it to decline, the neg side probably does not expect it to have much of an effect. Why not convert those views to numbers collected in a mutually agreed upon fashion, which can then be regularly published - alongside results? And let's see who's right, with accurate data. Of course there are confounders. If we hit a major recession, homelessness will increase regardless. These factors could be mentioned alongside such data. Instead without doing things beforehand both sides are simply going to spin arguments entirely in their favor, such as with the case of minimum wage increases. Did minimum wage increases collapse the economies? No. Did they cause some economic damage? Yes. Did they bring about a great life for low earners? No. Did they improve the quality of life of some low earners? Yes. And so both sides just create disingenuous arguments painting themselves as 100% correct, which informs nobody and divides everybody, since both sides come back with 'told ya so!'
  - hcknwscommenter 7y ago
    "Did minimum wage increases . . . cause some economic damage? Yes." Citation needed. My admittedly cursory review of the latest results suggest no damage at all.
robomartin 7y ago
At a basic level I would not have any issues with these laws if they also limited expenses. In other words, if you are going to use force to limit income then landlords ought to have the right to limit expenses proportionately. For example, make tenants responsible for wear and tear on the property, just like you pay for mileage on a rental car and are responsible for damages. As it is, they are using force to limit income while expecting the landlord to offer the same product and services and foot the bill on unlimited expenses. How about legally limiting salary increases while requiring the same or more work? And, when you change jobs, you are only allowed to make 10% more. Oh, yes, but you have to spend thousands to renew your credentials. And how about truly severe penalties for tenants who destroy or damage property? Anyone who has been a landlord for with more than a handful of properties knows how much of a nightmare it can often be. Try running 10, 20 or 100 units and see how quickly you are going to bug out once even this mild form of rent control rears it’s ugly head. Because you know, with almost absolute certainty, that this is the proverbial slippery slope. And nobody wants to be the guy waiting for the last seat out of the Titanic. Oh, yeah, unintended consequences: If Airbnb is more profitable than conventional renting...
- streb-lo 7y ago
  No one should own 10, 20, or 100 units of housing. When people finally realize that, there will be hell to pay.
  - robomartin 7y ago
    Why not?
ovi256 7y ago
At a maximum 5% increase per year, it takes 37 years for a $500 unit to catch up to the $3000 market price. So this law doesn't help that much with that particular case.
- moccachino 7y ago
  I think the example was that this law will not create such a scenario, in the way that previous rent control schemes have. The example given is of a 500% increase in rent, by definition no rent control law should make such an increase possible in a short time frame.
  - eru 7y ago
    Some reasonable law might allow that. Eg a law could allow any increase up to some benchmark, and up to 5% per year when above the benchmark. (No clue whether that would be a good idea or not.)
xxxpupugo 7y ago
Well said. It is weird to see so many people jumping out to lay the accusations of 'uninformed!', 'never works', etc... In fact, the CA, especially in bay area, the rent is already top among this country. 7% on top of that is still a quite sizable increase. And it is hilarious to see those (aspiring) landlords playing the blame-the-game-not-the-player rhetoric here to blame the government not allowing more houses to be built, while themselves being one of the biggest opponents to such initiative.
- bko 7y ago
  It is uninformed. Note that in a survey of economists ~80% of economists disagreed with the statement below and only 2% agreed: > Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them. [0] The negative effects of price controls, especially when it comes to rents is the most unifying issue in economics. Rent control isn't a new idea, but there is agreement that it's a bad idea. It's not the landlords who say this, its the people who study this stuff. Paul Krugman wrote about this in 2000 [1]. Putting in arbitrary controls on prices to fight cost increases is about as effective as putting arbitrary controls on thermometers to fight global warming. [0] http://www.igmchicago.org/surveys/rent-control http://www.igmchicago.org/surveys/rent-control [1] https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent...
  - chmod775 7y ago
    Your quote is completely irrelevant to this discussion, because increasing "amount and quality of broadly affordable rental housing" is not the goal of this law as described by your GP. The law is supposed to give families enough time to adjust or move away and find affordable housing elsewhere, without becoming bankrupt in the meantime. A completely different goal. Quoting opinions on something that is at best tangentially related does nothing.
    - leftyted 7y ago
meerita 7y ago
This has been tried in several countries, and it failed miserably. Rent control never worked. In Sweden you have to wait 20 years to get a flat with rent control. The only solution for the people is to increase the offer, how? by deregulating and allowing others to build more.
- Ardren 7y ago
  But this is not what the new bill is about. It doesn't cap total costs, it allows 5% per year increase, it doesn't apply to new homes, etc.
  - meerita 7y ago
    If there is any attempt to rent control is what I mentioned, not any particular point of the bill. The truth and I don't get it why people downvote me for just plainly state a fact, any kind of rent control and construction regulations just bring housing problems. Making caps (control) will not ease the crisis. Areas like SF or NY are very crowded and need more offer, not caps.
  - bko 7y ago
    > It doesn't cap total costs, it allows 5% per year increase, it doesn't apply to new homes If you tell everyone that you cannot increase more than 5% a year, this is used as a signal to all landlords to increase 5% a year. It's a coordination mechanism. And it helps hedge for years in which the market rent has increased by more than 5% and the landlord is unable to adjust. A commenter who is a landlord confirmed this as well. And this will increase the incentive to build new homes. This could be good but new homes tend to be more expensive and serve the high end. Much like the median price of a new car is significantly higher than the median price of all cars on the market. There are entire industries in New York that focus on buying units and converting them from rent stabilized/controlled to market rents through any means (direct payment, intimidation, legal, etc). To think this will somehow lower what people actually pay for housing is naive.
    - eru 7y ago
34679 7y ago
The lack of affordable housing always has been and always will be a supply problem. When demand for homes outpaces the number of homes being built, prices go up. Plain and simple. Homes that are built for renting (mainly apartments and condos, but some houses, too) are built for profit. If you make it less profitable to build, fewer will be built. If fewer homes are built, the problem is compounded, not rectified. If you want to make housing more affordable, make it as cheap and profitable as possible to build new homes. Get rid of the fees that can push over $100,000 for a single family home in some counties, before the builder even buys a nail or 2x4. In most states you can build a home for less than the price of permission to build a home in some California counties.
- folkrav 7y ago
  Not American, so my knowledge on the matter is limited. Is it that expensive even outside SF and LA areas? Also, AFAIK, these two areas (and surroundings) are very, very stressed in terms of traffic, and more housing means more people, and more cars. Can those cities deal with more traffic?
  - dragonwriter 7y ago
    > more housing means more people, and more cars. More housing in SF requires design that supports fewer cars. That's not as true in LA, perhaps, but it would still be the best way to do it.
  - rayiner 7y ago
    Remember the US is a federal system so costs vary greatly depending on state/municipality. California regulatory costs result in high prices even though the state is less dense than many others like Ohio with far cheaper housing. https://finance.yahoo.com/news/house-costs-500000-build-sell-california-texas-174156455.html https://finance.yahoo.com/news/house-costs-500000-build-sell....
  - noxToken 7y ago
    Very expensive. When you leave a lot of major metro areas, housing costs way less. There are 3+ BR homes on ½ acre of land (approx half an American football field or half a soccer pitch) in the South roughly 15 minutes from downtown areas for $125k - $175k USD. The cost of living in areas like SF and NYC are very high compared to the rest of the country. Housing is a major part of that cost of living hike.
MarkMc 7y ago
Given the booming demand and restricted supply for homes in San Francisco, the market rate for rent could easily outstrip inflation by 3% per year. That means it would take a decade for a rental rate that is currently 20% below market rate to catch up.
andrewla 7y ago
For those like me who do not subscribe to the nytimes, the text of the bill is here: https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201920200AB1482 https://leginfo.legislature.ca.gov/faces/billCompareClient.x...

throwaway5752 7y ago

This should be the top comment. The upshot is that if you are a family that is renting, you won't be forced out of your home on short notice. Try - for a moment - to imagine you are living close to your maximum expenses and your landlord increases your rent by 20% next year.

m463 7y ago
This happened to a family I know, except it was 50%. The building was purchased, "refurbished" and the rent was reset to a very high number.
- optimusclimb 7y ago
  > The building was purchased, "refurbished" and the rent was reset to a very high number. And if someone was willing to pay that number, then that's what the place was worth.
  - anthony_doan 7y ago
    That doesn't help the housing issues... which is the whole point of this article and the comment your replied to. While what you're saying isn't false it's not going to solve anything. Unless you don't think there is a housing issue.
  - heyoni 7y ago
    Yea but moving as an individual is stressful and 10x moreso for families. We’re trying to keep people off the streets and from having to make bad decisions without hurting the landlords ability to capitalize on their investment. This is a compromise.
    - mratzloff 7y ago
      Not to mention a sudden, unexpected expense in a situation where renters are on a tight budget and likely don't have much or any savings.
      - nostrebored 7y ago
        What are you talking about... One of the nicest things about being a renter is being able to choose to live in a place where you can get those savings.
        mratzloff 7y ago
        Spoken as if many people have a true choice about whether or not to rent.
      - heyoni 7y ago
        That’s it. That’s all this is. The law is just regulating shitty behavior. But you always have those who say “well I can legally raise blah and if I don’t less money.” Well now they can’t. Good. We’ve made it slightly hard to be a major cunt.
        thaumasiotes 7y ago
- rdtwo 7y ago
  A lot of units require seismic retrofitting and that’s super expensive. If you can’t pass that cost on a lot of these buildings won’t be retrofitted
CryptoPunk 7y ago
As counter-intuitive as it seems, this should happen. People should not look at rental property with no rent stabilization provision as a stable housing arrangement. If there is a sudden shortage in housing, we need prices to suddenly reflect that shortage, in order for people to be suddenly incentivised to and compensated for building housing to fill that shortage. Shortage is pain and rent control simply distributes that pain in a different way than the market would and does so in a way that reduces the ability of the market to gradually alleviate that pain. The more the government intervenes in rental contracts to mandate that they be like a lifetime lease agreement, the less incentives and sustenance there is to build a rental property overall. Society is better off having more rental units that have prices that are not legislatively stabilized than have a smaller supply of rental units with mandatorily stabilize prices. If someone wants stabilized rental prices and they should sign a lease agreement with the landlord that gives them that at the price of a slightly higher per month rental rate. These kinds of things should arranged by actors in the market rather than having the government ban all alternatives in order to force people into stabalized rent contracts.

joe_the_user 7y ago

Well, It's not entirely unreasonable to think landlords somewhere in the state will take this "5% + inflation" as automatically what's called-for. Conceivably a few landlords who otherwise would have held the line will do this. But given this was more or less already standard for the large landlords and given the landlords who have been really, really gouging, this sad collateral.

macspoofing 7y ago

So ... you are arguing rent control is good? Or that this isn't rent control? Or that some rent control is good, but more is really bad?

ac29 7y ago
The point was that this CA statewide bill is quite different from places like SF. New state law: 5% + inflation SF: 60% of inflation. This has has never been over 2.9% a year since the law changed in 1992 from a fixed 4% [0]. I think one could sanely argue that allowing increases of up to 5% plus inflation is a suitable restriction, while limiting increases to significantly below inflation is not. [0] https://sfrb.org/sites/default/files/Document/Form/571%20Allowable%20Annual%20Increases%2019-20.pdf https://sfrb.org/sites/default/files/Document/Form/571%20All...
- adamsb6 7y ago
  What if the market clearing price increases at greater than 5% plus inflation? This isn’t a free lunch, the tradeoff of a price cap is under provision of a good.
  - namesbc 7y ago
    We currently have a drastic under provision of a good to the tune of 3.5 million homes in CA alone. This under provision is not because building new homes isn't profitable, it is because realtors, landlords and homeowners are actively blocking new supply in order to extract above market rents from desperate people. Adding a rent cap of MORE THAN DOUBLE inflation will have no affect on supply, it is ridiculously profitable to rent out your property right now. CA would have to do something like cap rents at less than $500 per bedroom before profit margins would affect supply.
    - jjav 7y ago
      > it is ridiculously profitable to rent out your property right now I'd be curious if you can share specific numbers on where this is true? Where in CA can I buy a house/apt and rent it out for more than the mortgage+insurance+taxes+maintenance? A link to the MLS listing would be appreciated. Every now and then I look at housing costs vs. rental income to consider buying some investment property. But the numbers never work out, I'd always end up loosing money to rent it out.

jquery 7y ago

Are there any provisions for periods of high inflation in the market?

WalterSear 7y ago
The limit is 5% plus inflation.

SquishyPanda23 7y ago

> I'm shocked at the ideological fervor here Really? This is pretty common on HN. This is IMO one of its weaknesses. There are certain topics that bring out political rants. One is regulation and another is housing prices in the bay area. This story brings out both.

quotemstr 7y ago
>> I'm shocked at the ideological fervor here > Really? This is pretty common on HN. This is IMO one of its weaknesses. HN is heavily focused on the Bay Area. This fervor seems like a persistent feature of that region's culture and not HN in particular.
t34543 7y ago
Plastic, climate change, and identity politics also bring out radical behavior.
- skybrian 7y ago
  Also, privacy and anything somehow related to Google or Facebook.

busterarm 7y ago

The rent control laws in NYC aren't even nearly as bad as SF, despite how much they get demonized here on HN. In NYC units that might be _actually cheap_, as in rent controlled and not stabilized, number roughly 17k units _in total_. And only about 1/3 of those are significantly below market or in desirable neighborhoods. It's almost insignificant and the number of rent controlled units has gone down by roughly HALF in the last 5 years, because the tenants in them are dying and income limits on any descendants usually kick the units out of being controlled into stabilized. NYC has a much larger number of rent stabilized units, which is somewhere near 1/3 of all available units that are renting at or below $2700 (twice the national average, btw). The overwhelming majority of these are within a few hundred dollars of market rate. There are about 4.2M housing units in NYC with roughly 30k being added every year. The "cheap" rent-controlled units are a rounding error. That is not anything like the situation folks in SF are rightfully railing against.

irq11 7y ago
The rent control laws in SF aren’t even as bad as HN comments would have you believe. Rent control doesn’t apply to new construction in SF. It also allows a regulated annual increase, and rent automatically jumps back up to market upon a number of different conditions - not the least of which is that the owner can push you out to renovate the building! HN commenters are usually just repeating stuff they heard somewhere, and have no idea what the laws actually say. Moreover, while there are indeed lots of publications on the theoretical impacts of rent control, few of those publications consider laws as they actually exist, or if they do, the scope of the impacts is rarely communicated when translated into HN talking points. Every study I’m aware of has shown, at worst, diffuse, long-term negative impacts to housing costs. Meanwhile, many of them do exactly what they set out to do: stabilize short-term prices for vulnerable populations. These laws are simply not the boogeymen that comments here make them seem.
- refurb 7y ago
  Rent control in SF really is that bad. Rent increase limits are 60% of CPI, so it can’t even match inflation. If your costs go up (utilities) or you want to do capital improvements, good luck getting the rent board to approve a pass through. Want to prevent other people than the tenant from moving into a 1 bedroom? Tough, can’t say no to that, it just has to be under 3 people. Want to move into your own house? Sure, just pay the tenant a few tens of thousands in “pay off”. SF rent control is absolutely onerous and definitely shrinks the pool of potential landlords and thus potential units.

xenocyon 7y ago

The Urbanist has an article on how modern rent control proposals differ from older ones, and the ramifications thereof: https://www.theurbanist.org/2019/08/05/the-case-for-rent-control/ https://www.theurbanist.org/2019/08/05/the-case-for-rent-con...

seraphsf 7y ago

I agree with you. I’m renting out a previous condo, and as a landlord, this law strikes me as reasonable and measured. The market will still find its natural level. These controls merely dampen short-term shocks, allowing tenants and communities time to adjust as market conditions change.

rjf72 7y ago
To take the other side of the argument here I'm completely against this change but I'm happy that it passed. The reason is simple: without data we're all just speculating. If I'm correct, now I will have real bias-free (since we're looking at this exact location as opposed to other locations where rent control has had... issues) data to support my views. And of course only a fool would cling to certainty on issues this complex. It's very possible my views are wrong. And if they are then that's a great outcome. If they're not? Well the cost of this experiment is not going to be that big, and it can be reversed relatively easily. The one thing I think both sides often fail to do though is to set falsifiable metrics before running such an experiment. Take a group of qualified individuals against the program, and those for the program. And have them sit down and work out their expectations of the program. So for instance homelessness. The pro side probably expects this will cause it to decline, the neg side probably does not expect it to have much of an effect. Why not convert those views to numbers collected in a mutually agreed upon fashion, which can then be regularly published - alongside results? And let's see who's right, with accurate data. Of course there are confounders. If we hit a major recession, homelessness will increase regardless. These factors could be mentioned alongside such data. Instead without doing things beforehand both sides are simply going to spin arguments entirely in their favor, such as with the case of minimum wage increases. Did minimum wage increases collapse the economies? No. Did they cause some economic damage? Yes. Did they bring about a great life for low earners? No. Did they improve the quality of life of some low earners? Yes. And so both sides just create disingenuous arguments painting themselves as 100% correct, which informs nobody and divides everybody, since both sides come back with 'told ya so!'
- hcknwscommenter 7y ago
  "Did minimum wage increases . . . cause some economic damage? Yes." Citation needed. My admittedly cursory review of the latest results suggest no damage at all.

robomartin 7y ago

At a basic level I would not have any issues with these laws if they also limited expenses. In other words, if you are going to use force to limit income then landlords ought to have the right to limit expenses proportionately. For example, make tenants responsible for wear and tear on the property, just like you pay for mileage on a rental car and are responsible for damages. As it is, they are using force to limit income while expecting the landlord to offer the same product and services and foot the bill on unlimited expenses. How about legally limiting salary increases while requiring the same or more work? And, when you change jobs, you are only allowed to make 10% more. Oh, yes, but you have to spend thousands to renew your credentials. And how about truly severe penalties for tenants who destroy or damage property? Anyone who has been a landlord for with more than a handful of properties knows how much of a nightmare it can often be. Try running 10, 20 or 100 units and see how quickly you are going to bug out once even this mild form of rent control rears it’s ugly head. Because you know, with almost absolute certainty, that this is the proverbial slippery slope. And nobody wants to be the guy waiting for the last seat out of the Titanic. Oh, yeah, unintended consequences: If Airbnb is more profitable than conventional renting...

streb-lo 7y ago
No one should own 10, 20, or 100 units of housing. When people finally realize that, there will be hell to pay.
- robomartin 7y ago
  Why not?

ovi256 7y ago

At a maximum 5% increase per year, it takes 37 years for a $500 unit to catch up to the $3000 market price. So this law doesn't help that much with that particular case.

moccachino 7y ago
I think the example was that this law will not create such a scenario, in the way that previous rent control schemes have. The example given is of a 500% increase in rent, by definition no rent control law should make such an increase possible in a short time frame.
- eru 7y ago
  Some reasonable law might allow that. Eg a law could allow any increase up to some benchmark, and up to 5% per year when above the benchmark. (No clue whether that would be a good idea or not.)

xxxpupugo 7y ago

Well said. It is weird to see so many people jumping out to lay the accusations of 'uninformed!', 'never works', etc... In fact, the CA, especially in bay area, the rent is already top among this country. 7% on top of that is still a quite sizable increase. And it is hilarious to see those (aspiring) landlords playing the blame-the-game-not-the-player rhetoric here to blame the government not allowing more houses to be built, while themselves being one of the biggest opponents to such initiative.

bko 7y ago
It is uninformed. Note that in a survey of economists ~80% of economists disagreed with the statement below and only 2% agreed: > Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them. [0] The negative effects of price controls, especially when it comes to rents is the most unifying issue in economics. Rent control isn't a new idea, but there is agreement that it's a bad idea. It's not the landlords who say this, its the people who study this stuff. Paul Krugman wrote about this in 2000 [1]. Putting in arbitrary controls on prices to fight cost increases is about as effective as putting arbitrary controls on thermometers to fight global warming. [0] http://www.igmchicago.org/surveys/rent-control http://www.igmchicago.org/surveys/rent-control [1] https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent...
- chmod775 7y ago
  Your quote is completely irrelevant to this discussion, because increasing "amount and quality of broadly affordable rental housing" is not the goal of this law as described by your GP. The law is supposed to give families enough time to adjust or move away and find affordable housing elsewhere, without becoming bankrupt in the meantime. A completely different goal. Quoting opinions on something that is at best tangentially related does nothing.
  - leftyted 7y ago

meerita 7y ago

This has been tried in several countries, and it failed miserably. Rent control never worked. In Sweden you have to wait 20 years to get a flat with rent control. The only solution for the people is to increase the offer, how? by deregulating and allowing others to build more.

Ardren 7y ago
But this is not what the new bill is about. It doesn't cap total costs, it allows 5% per year increase, it doesn't apply to new homes, etc.
- meerita 7y ago
  If there is any attempt to rent control is what I mentioned, not any particular point of the bill. The truth and I don't get it why people downvote me for just plainly state a fact, any kind of rent control and construction regulations just bring housing problems. Making caps (control) will not ease the crisis. Areas like SF or NY are very crowded and need more offer, not caps.
- bko 7y ago
  > It doesn't cap total costs, it allows 5% per year increase, it doesn't apply to new homes If you tell everyone that you cannot increase more than 5% a year, this is used as a signal to all landlords to increase 5% a year. It's a coordination mechanism. And it helps hedge for years in which the market rent has increased by more than 5% and the landlord is unable to adjust. A commenter who is a landlord confirmed this as well. And this will increase the incentive to build new homes. This could be good but new homes tend to be more expensive and serve the high end. Much like the median price of a new car is significantly higher than the median price of all cars on the market. There are entire industries in New York that focus on buying units and converting them from rent stabilized/controlled to market rents through any means (direct payment, intimidation, legal, etc). To think this will somehow lower what people actually pay for housing is naive.
  - eru 7y ago

34679 7y ago

The lack of affordable housing always has been and always will be a supply problem. When demand for homes outpaces the number of homes being built, prices go up. Plain and simple. Homes that are built for renting (mainly apartments and condos, but some houses, too) are built for profit. If you make it less profitable to build, fewer will be built. If fewer homes are built, the problem is compounded, not rectified. If you want to make housing more affordable, make it as cheap and profitable as possible to build new homes. Get rid of the fees that can push over $100,000 for a single family home in some counties, before the builder even buys a nail or 2x4. In most states you can build a home for less than the price of permission to build a home in some California counties.

folkrav 7y ago
Not American, so my knowledge on the matter is limited. Is it that expensive even outside SF and LA areas? Also, AFAIK, these two areas (and surroundings) are very, very stressed in terms of traffic, and more housing means more people, and more cars. Can those cities deal with more traffic?
- dragonwriter 7y ago
  > more housing means more people, and more cars. More housing in SF requires design that supports fewer cars. That's not as true in LA, perhaps, but it would still be the best way to do it.
- rayiner 7y ago
  Remember the US is a federal system so costs vary greatly depending on state/municipality. California regulatory costs result in high prices even though the state is less dense than many others like Ohio with far cheaper housing. https://finance.yahoo.com/news/house-costs-500000-build-sell-california-texas-174156455.html https://finance.yahoo.com/news/house-costs-500000-build-sell....
- noxToken 7y ago
  Very expensive. When you leave a lot of major metro areas, housing costs way less. There are 3+ BR homes on ½ acre of land (approx half an American football field or half a soccer pitch) in the South roughly 15 minutes from downtown areas for $125k - $175k USD. The cost of living in areas like SF and NYC are very high compared to the rest of the country. Housing is a major part of that cost of living hike.

MarkMc 7y ago

Given the booming demand and restricted supply for homes in San Francisco, the market rate for rent could easily outstrip inflation by 3% per year. That means it would take a decade for a rental rate that is currently 20% below market rate to catch up.

andrewla 7y ago

For those like me who do not subscribe to the nytimes, the text of the bill is here: https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201920200AB1482 https://leginfo.legislature.ca.gov/faces/billCompareClient.x...