3 ms·

In my experience (SF, LA) the rent control is there to prevent the gouging of yuppies, not to keep the poor people in. The idea is the city wants to keep rent

In my experience (SF, LA) the rent control is there to prevent the gouging of yuppies, not to keep the poor people in. The idea is the city wants to keep rent just high enough to retain the rich people for the tax and spending base but low enough that the landlords to squeeze them out, which they most likely would do if given the chance. It might be different in places other than California though, like New York.

natrius 16y ago
You can't squeeze out rich people by raising prices without ending up with empty units, which landlords don't want.
- tastybites 16y ago
  Lots of landlords are stupid and will raise rent beyond the market clearing rate just to make a quick buck, resulting in empty units and shitty communities.
  - wazoox 16y ago
    No, actually it's rent control that gives way to that. Landlords don't rent at a loss, and prefer keeping their apartments empty, resulting in shitty communities, then squatters, etc.
    - gjm11 16y ago
      Both mechanisms seem somewhat plausible. Either of you got any evidence about how often each actually happens?
      - wazoox 16y ago
        From the Wikipedia page ( http://en.wikipedia.org/wiki/Rent_control http://en.wikipedia.org/wiki/Rent_control ): Most economists believe that a ceiling on rents reduces the quality and quantity of housing available.[41][42] This view is based on analysis of empirical evidence as well as the understanding generated by theoretical models.[42] Economists from differing sides of the political spectrum, such as Paul Krugman[43] and Thomas Sowell,[44] have criticized rent regulation as poor economics which, despite its good intentions, leads to the creation of less housing, raises prices, and increases urban blight.
      - tastybites 16y ago
        It probably works both ways, depending on exactly how low or high the rents are held. I've lived in some really, really nice areas that are rent controlled (SF Pacific Heights, Santa Monica, Downtown San Diego), apparently others have lived in relatively crappy neighborhoods where rent is also controlled. Now that I think about it further, it seems obvious that rent control would be a tool that can be used by a municipality to control rents in either direction, depending on their goals.
- defen 16y ago
  Here in SF the geniuses of the Lembi Group bought a bunch of apartment buildings on credit (something like 1 billion dollar's worth), used questionable/borderline illegal tactics to squeeze people out of rent controlled units, and then jacked the prices way up. Then the real estate bubble popped and they went bankrupt.

natrius 16y ago

You can't squeeze out rich people by raising prices without ending up with empty units, which landlords don't want.

tastybites 16y ago
Lots of landlords are stupid and will raise rent beyond the market clearing rate just to make a quick buck, resulting in empty units and shitty communities.
- wazoox 16y ago
  No, actually it's rent control that gives way to that. Landlords don't rent at a loss, and prefer keeping their apartments empty, resulting in shitty communities, then squatters, etc.
  - gjm11 16y ago
    Both mechanisms seem somewhat plausible. Either of you got any evidence about how often each actually happens?
    - wazoox 16y ago
      From the Wikipedia page ( http://en.wikipedia.org/wiki/Rent_control http://en.wikipedia.org/wiki/Rent_control ): Most economists believe that a ceiling on rents reduces the quality and quantity of housing available.[41][42] This view is based on analysis of empirical evidence as well as the understanding generated by theoretical models.[42] Economists from differing sides of the political spectrum, such as Paul Krugman[43] and Thomas Sowell,[44] have criticized rent regulation as poor economics which, despite its good intentions, leads to the creation of less housing, raises prices, and increases urban blight.
    - tastybites 16y ago
      It probably works both ways, depending on exactly how low or high the rents are held. I've lived in some really, really nice areas that are rent controlled (SF Pacific Heights, Santa Monica, Downtown San Diego), apparently others have lived in relatively crappy neighborhoods where rent is also controlled. Now that I think about it further, it seems obvious that rent control would be a tool that can be used by a municipality to control rents in either direction, depending on their goals.
defen 16y ago
Here in SF the geniuses of the Lembi Group bought a bunch of apartment buildings on credit (something like 1 billion dollar's worth), used questionable/borderline illegal tactics to squeeze people out of rent controlled units, and then jacked the prices way up. Then the real estate bubble popped and they went bankrupt.