4 ms·

We need to get out of the mindset that housing should operate like a market. We need to build lots more housing, yes, but to really solve the problem for good w

We need to get out of the mindset that housing should operate like a market. We need to build lots more housing, yes, but to really solve the problem for good we need to change how we think about housing. Otherwise we'll build a bit more and then rest on our laurels until the next crisis. There are practical steps we can take, today, to incentivize building more housing, such as: Eliminating parking minimums: use the building's space for people, not cars. Tax land on its ability to house. It should be a tax advantage to build houses over building a surface parking lot. Build and maintain low rise, distributed public housing. Ensure operational costs are covered, not just capital costs. Low rises are easier to maintain than big projects. Rent control -- I know this is polarizing, but I believe housing shouldn't be a constant upward pricing until you reach the limits of what the market will bear. People need live somewhere, and if we continue to turn the screws on rent, they'll have less to spend elsewhere. There are other things we could do today too, like strengthen tenants unions, improve tenant protection laws, enact right of first refusal laws that require landlords to sell to the current tenants first, and more. I know folks might disagree with me, and that's ok. I'd ask that you bring some good faith discussion rather than just downvoting and moving on. (In case it is relevant, I am a home owner in a hot real estate market.)

colinmhayes 6y ago
Rent control is an interesting argument because it's clear that it lowers total surplus but there's no way to really know if lowers total utility since the the rate of surplus to utility conversion is dependent on wealth. So now we get people arguing past each other instead of with each other because their priors aren't aligned. One group wants to maximize surplus and the other utility. We need to answer that question before we can move onto the policy decisions.
- Pfhreak 6y ago
  I think it might not be zero sum. While sometimes we have policies that maximize one for the sake of the other, not all policies will. Some will maximize both, others will minimize both. The solution likely includes some policies that will make tradeoffs (e.g. like rent control), offset by other polices that maximize surplus at the cost of utility. Yes, this means some policies will be working at cross purposes, but different people in our society will be impacted differently by those policies. (E.g. there are some folks for whom rent control means being able to live in their community at all). So it might be best to not try to chart the most efficient course from the outside, and instead accept some inefficiencies if it means making positive moves now.
- imtringued 6y ago
  The fundamental problem with rent control is that it is damage control after the fact. Politicians just introduce rent control to get voters off their neck and then do nothing to solve the actual problem, because they don't have to.
  - 8note 6y ago
    It solves one out of two problems: How do you keep people in their homes? How do you get everyone into a home? Tearing down existing housing to redevelop into high rise apartments similarly only solves one of the two
kelnos 6y ago
Re: rent control, if we keep it and extend it to all the housing stock, it needs a few tweaks. For one, changing occupancy can't "reset" it to market rate. The current state of things just keeps people in the same place for many years past when they'd like to move, simply because they don't want to give up their low rent. It also severely disadvantages potential new residents who haven't moved here yet, as they're always faced with a market-rate rent rather than a lower rent-controlled one. SF rent control currently allows landlords to raise rent by 5-10% per year (depending on how large the yearly cost-of-living increase is), and can also raise rent somewhat for capital improvements[0]. To offset the above change, maybe we could bump that a little bit... but honestly 10% a year seems like a lot already; if you look at the other side of the equation, most renters are probably not getting a 10% raise each year, and a lot probably aren't even getting 5%. Does a landlord's costs really increase by 5-10% a year? I'd be surprised if so. We also need a vacancy tax. Landlords should not be allowed to keep units vacant when doing so makes more financial sense than leasing it. [0] Because I had to look it up myself: https://sftu.org/rent-control/ https://sftu.org/rent-control/
- EdJiang 6y ago
  10% is not correct, that's the max allowed by CA. SF is way lower, and set on an annual basis: https://sf.gov/information/allowable-rent-increases https://sf.gov/information/allowable-rent-increases Here's from the last 10 years in SF: https://sfrb.org/sites/default/files/Document/Form/571%20Allowable%20Annual%20Increases%2020-21%20EN%204.6.20.pdf https://sfrb.org/sites/default/files/Document/Form/571%20All... Effective Period Amount of Increase March 1, 2020 – February 28, 2021 1.8% March 1, 2019 – February 29, 2020 2.6% March 1, 2018 – February 28, 2019 1.6% March 1, 2017 – February 28, 2018 2.2% March 1, 2016 – February 28, 2017 1.6% March 1, 2015 – February 29, 2016 1.9% March 1, 2014 – February 28, 2015 1.0% March 1, 2013 – February 28, 2014 1.9% March 1, 2012 – February 28, 2013 1.9% March 1, 2011 – February 29, 2012 0.5% March 1, 2010 – February 28, 2011 0.1%
- colinmhayes 6y ago
  Disadvantaging potential new residents is the entire point of rent control. It's supposed to allow communities to stick together at the cost of people who want to pay more to live there.
missedthecue 6y ago
Thinking that a commodity market like housing can just "not be a market" if we pretend hard enough that it isn't seems like a silly way to deal with things. Like leaping off a skyscraper because you're determined that gravity is irrelevant.
- Pfhreak 6y ago
  I strongly believe that, through legal/social/regulatory pressure, we can make housing not a commodity market. Just like we don't consider our roads or elementary schools to be a commodity market. I'm happy to discuss more, in depth, but just dismissing the idea out of hand with "you might as well jump off a building" doesn't raise any substantive objections to further a discussion.
  - missedthecue 6y ago
    What I think the whole housing debate revolves around is not really about living standards, or even economics, but morality. Advocates of housing reforms such as the ones you list are outright opposed to the fact that housing is market price–determined by supply and demand, the same as the price of apples or lumber or a barrel of oil. And it is for that reason, rather than the practical details, that the broader political movement of which the demand for it is the leading edge is ultimately doomed to failure: For the amorality of the market economy is part of its essence, and cannot be legislated away. Rent control for instance causes a decrease in the supply of housing. People in Stockholm are on 12 year waiting lists for apartments because rent control has reduced the amount of housing available. Simply telling people it's not a commodity will not make it cease to function like one.
cheriot 6y ago
You bring up good topics, but the core of the issue is simpler than that. The city has a housing shortage because it prohibits housing from being built. Done. When there's not enough housing for all the people that work in a city the prices go up and commutes get longer. When a city/county/region allows new office construction there's an obligation to allow new residential construction to house all those new workers. San Francisco and other bay area municipalities have spent the last 30 years avoiding that responsibility.
trident5000 6y ago
Or you know, people could just not live on top of each other in cities and fucking move/demand their companies allow them to live in rural areas. Micro-solutions like "eliminating parking minimums" is just a tiny band-aid on a giant gaping wound of an issue. If your company allows you to work remotely and you dont, thats on you and you get the life quality you deserve for being inflexible. Theres a lot of people who live in cities as a choice rather than a necessity because they want the lifestyle. Well you cant afford it, sorry.
- pertymcpert 6y ago
  Cities should be affordable. They offer huge benefits in terms of collaboration, and the increased viability of communal services, and also cultural events. We need to be interacting much more with our fellow people in the US, not less.
  - SirZimzim 6y ago
    Agreed, city life builds a deep level of culture that will never happen with everyone working remote and moving to less populated areas just so that they can own a bigger house. We need to bring back the starving artists, allow people to take risks in cities by removing these inflated financial burdens. The internet as great as it is primarily promotes exceptionalism where we put most of our eggs in one basket and copy paste type work.
  - trident5000 6y ago
    lol. I lived in nyc for a decade. Most people dont even know their neighbors.
- Pfhreak 6y ago
  I absolutely love living in a city. I also suspect that if we were to spread everyone out evenly over the globe we'd have limited wilderness areas (and introduce a number of inefficiencies in commodity exchanges). While the work tech workers do can be remote, it would be much harder to operate, e.g., a restaurant in a highly distributed world than a dense one.

colinmhayes 6y ago

Rent control is an interesting argument because it's clear that it lowers total surplus but there's no way to really know if lowers total utility since the the rate of surplus to utility conversion is dependent on wealth. So now we get people arguing past each other instead of with each other because their priors aren't aligned. One group wants to maximize surplus and the other utility. We need to answer that question before we can move onto the policy decisions.

Pfhreak 6y ago
I think it might not be zero sum. While sometimes we have policies that maximize one for the sake of the other, not all policies will. Some will maximize both, others will minimize both. The solution likely includes some policies that will make tradeoffs (e.g. like rent control), offset by other polices that maximize surplus at the cost of utility. Yes, this means some policies will be working at cross purposes, but different people in our society will be impacted differently by those policies. (E.g. there are some folks for whom rent control means being able to live in their community at all). So it might be best to not try to chart the most efficient course from the outside, and instead accept some inefficiencies if it means making positive moves now.
imtringued 6y ago
The fundamental problem with rent control is that it is damage control after the fact. Politicians just introduce rent control to get voters off their neck and then do nothing to solve the actual problem, because they don't have to.
- 8note 6y ago
  It solves one out of two problems: How do you keep people in their homes? How do you get everyone into a home? Tearing down existing housing to redevelop into high rise apartments similarly only solves one of the two

kelnos 6y ago

Re: rent control, if we keep it and extend it to all the housing stock, it needs a few tweaks. For one, changing occupancy can't "reset" it to market rate. The current state of things just keeps people in the same place for many years past when they'd like to move, simply because they don't want to give up their low rent. It also severely disadvantages potential new residents who haven't moved here yet, as they're always faced with a market-rate rent rather than a lower rent-controlled one. SF rent control currently allows landlords to raise rent by 5-10% per year (depending on how large the yearly cost-of-living increase is), and can also raise rent somewhat for capital improvements[0]. To offset the above change, maybe we could bump that a little bit... but honestly 10% a year seems like a lot already; if you look at the other side of the equation, most renters are probably not getting a 10% raise each year, and a lot probably aren't even getting 5%. Does a landlord's costs really increase by 5-10% a year? I'd be surprised if so. We also need a vacancy tax. Landlords should not be allowed to keep units vacant when doing so makes more financial sense than leasing it. [0] Because I had to look it up myself: https://sftu.org/rent-control/ https://sftu.org/rent-control/

EdJiang 6y ago
10% is not correct, that's the max allowed by CA. SF is way lower, and set on an annual basis: https://sf.gov/information/allowable-rent-increases https://sf.gov/information/allowable-rent-increases Here's from the last 10 years in SF: https://sfrb.org/sites/default/files/Document/Form/571%20Allowable%20Annual%20Increases%2020-21%20EN%204.6.20.pdf https://sfrb.org/sites/default/files/Document/Form/571%20All... Effective Period Amount of Increase March 1, 2020 – February 28, 2021 1.8% March 1, 2019 – February 29, 2020 2.6% March 1, 2018 – February 28, 2019 1.6% March 1, 2017 – February 28, 2018 2.2% March 1, 2016 – February 28, 2017 1.6% March 1, 2015 – February 29, 2016 1.9% March 1, 2014 – February 28, 2015 1.0% March 1, 2013 – February 28, 2014 1.9% March 1, 2012 – February 28, 2013 1.9% March 1, 2011 – February 29, 2012 0.5% March 1, 2010 – February 28, 2011 0.1%
colinmhayes 6y ago
Disadvantaging potential new residents is the entire point of rent control. It's supposed to allow communities to stick together at the cost of people who want to pay more to live there.

missedthecue 6y ago

Thinking that a commodity market like housing can just "not be a market" if we pretend hard enough that it isn't seems like a silly way to deal with things. Like leaping off a skyscraper because you're determined that gravity is irrelevant.

Pfhreak 6y ago
I strongly believe that, through legal/social/regulatory pressure, we can make housing not a commodity market. Just like we don't consider our roads or elementary schools to be a commodity market. I'm happy to discuss more, in depth, but just dismissing the idea out of hand with "you might as well jump off a building" doesn't raise any substantive objections to further a discussion.
- missedthecue 6y ago
  What I think the whole housing debate revolves around is not really about living standards, or even economics, but morality. Advocates of housing reforms such as the ones you list are outright opposed to the fact that housing is market price–determined by supply and demand, the same as the price of apples or lumber or a barrel of oil. And it is for that reason, rather than the practical details, that the broader political movement of which the demand for it is the leading edge is ultimately doomed to failure: For the amorality of the market economy is part of its essence, and cannot be legislated away. Rent control for instance causes a decrease in the supply of housing. People in Stockholm are on 12 year waiting lists for apartments because rent control has reduced the amount of housing available. Simply telling people it's not a commodity will not make it cease to function like one.

cheriot 6y ago

You bring up good topics, but the core of the issue is simpler than that. The city has a housing shortage because it prohibits housing from being built. Done. When there's not enough housing for all the people that work in a city the prices go up and commutes get longer. When a city/county/region allows new office construction there's an obligation to allow new residential construction to house all those new workers. San Francisco and other bay area municipalities have spent the last 30 years avoiding that responsibility.

trident5000 6y ago

Or you know, people could just not live on top of each other in cities and fucking move/demand their companies allow them to live in rural areas. Micro-solutions like "eliminating parking minimums" is just a tiny band-aid on a giant gaping wound of an issue. If your company allows you to work remotely and you dont, thats on you and you get the life quality you deserve for being inflexible. Theres a lot of people who live in cities as a choice rather than a necessity because they want the lifestyle. Well you cant afford it, sorry.

pertymcpert 6y ago
Cities should be affordable. They offer huge benefits in terms of collaboration, and the increased viability of communal services, and also cultural events. We need to be interacting much more with our fellow people in the US, not less.
- SirZimzim 6y ago
  Agreed, city life builds a deep level of culture that will never happen with everyone working remote and moving to less populated areas just so that they can own a bigger house. We need to bring back the starving artists, allow people to take risks in cities by removing these inflated financial burdens. The internet as great as it is primarily promotes exceptionalism where we put most of our eggs in one basket and copy paste type work.
- trident5000 6y ago
  lol. I lived in nyc for a decade. Most people dont even know their neighbors.
Pfhreak 6y ago
I absolutely love living in a city. I also suspect that if we were to spread everyone out evenly over the globe we'd have limited wilderness areas (and introduce a number of inefficiencies in commodity exchanges). While the work tech workers do can be remote, it would be much harder to operate, e.g., a restaurant in a highly distributed world than a dense one.