5 ms·

Logically, it's the other way around: rent rises because wages (i.e., ability to pay, with an implied high willingness to pay for better housing) are high. Rent

by roel_v 15y ago

Logically, it's the other way around: rent rises because wages (i.e., ability to pay, with an implied high willingness to pay for better housing) are high. Rent rises to capture some of the surplus that is created by the high amounts of money that go around.

cpeterso 15y ago
San Francisco has apartment rent control so new renters (e.g. young people moving to the city) must pay more to offset landlords' loss of rental income from long-time renters.
- davidu 15y ago
  Your conclusion is not based with facts. Most landlords in the city do not have rent-controlled properties. That is a fact you can look up in the City websites. Therefore, the argument that rent is going up to offset rent-controlled properties is fallacious. :-)
  - rdl 15y ago
    This depends on where in the city you are -- most of the housing stock in SF is pre-1979 construction, and thus IS eligible for rent control. In SoMA, there's a lot of new construction, largely either in the form of condos or big corporate rented buildings (archstone, etc.). Most of the landlords for the older buildings own a small number of units (1-4); the big new buildings might have lots of units but not a lot of individual landlords. Most startup people seem to want to live in the Mission or other older areas, even if they work in SoMA. (something I don't understand; I like the new buildings in SoMA)
    - malyk 15y ago
      I'd chalk wanting to live in the mission or other areas to two things. Most people hate living in large apartment buildings when you can have a sweet victorian flat and the "nightlife" in soma is a totally different vibe than in the mission. Especially the variety of options.
  - earl 15y ago
    While it is possible that most landlords don't have rent-controlled properties, I think the majority of renter-occupied housing is subject to rent control. FYI almost anything built prior to 1979 is rent controlled. Also, what sf calls rent controlled is what nyc calls rent stabilized: when tenants leave the landlord can reset the unit to market rents. The law only caps increases while the same tenant lives in the same apartment. data: proportion of renter occupied housing in sf subject to rent control: http://www.thehdmt.org/indicators/view/192 http://www.thehdmt.org/indicators/view/192 2nd map direct link: http://www.thehdmt.org/img/indicators/pdf/RentControlHousingStock.pdf http://www.thehdmt.org/img/indicators/pdf/RentControlHousing...
  - cpeterso 15y ago
    > Most landlords in the city do not have rent-controlled properties. But what about tenants? The San Francisco Tenants Union says, "most [San Francisco] tenants are covered by rent control." [1] I couldn't find recent numbers, but the San Francisco Rent Board's 2002 Tenant Survey Summary Report [2] says two-thirds of survey respondents’ units were rent-controlled and 10% were market rate: San Francisco’s rental housing stock is still dominated by rent controlled units. Over two thirds of survey respondents’ units were classified as rent controlled; 13 percent were subsidized or assisted, 10 percent were market rate and the remainder were either occupied by close relatives of the property owner or their market status was undetermined. [1] http://www.sftu.org/rentcontrol.html http://www.sftu.org/rentcontrol.html [2] http://www.sfrb.org/Modules/ShowDocument.aspx?documentid=1885 http://www.sfrb.org/Modules/ShowDocument.aspx?documentid=188...
    - SilasX 15y ago
      All the rent control in the world doesn't mean a thing if a newcomer to SF can't actually rent such a low-priced unit. Here you go: http://sfbay.craigslist.org/sfc/apa/ http://sfbay.craigslist.org/sfc/apa/ Show me where the rent-controlled units I can get are. They don't exist, because whatever ones are out there are either crappy enough to more-than-make up for their cheapness, or snapped up by well-connected people. (Btw, love the URL -- at a glance it reads as stfu, lol.)
- roel_v 15y ago
  Apart from the other argument made that SF has a low portion of rent-controlled properties (I don't know anything about that really), your reasoning would only work if all landlords would collude in keeping rent prices artificially high; something that is often claimed by those less informed about economics but highly improbably in reality (for a variety of reasons - there is so much literature on why large-scale collusion for price inflation of commodities is implausible that it makes little sense for me to repeat it here). Furthermore, I think you're misunderstanding pricing strategies landlords use to set rent prices. A landlord doesn't (and can't) just say 'oh I need a 4% ROI on my capital, so I need to charge 1200$ of rent for this unit to make up for the 800$ I can charge on the other'. As a landlord, you try to capture as much of the value that consumers are willing to pay for housing as you can. There are various ways of trying that, but all involve variables that are completely separate from the rental income made from other properties (somehow the gambler's fallacy comes to mind, I think both lines of reasoning are in the same class of common cognitive mishaps).
- literalusername 15y ago
  San Francisco also has an artificial housing shortage caused by enforced height-limits for new buildings. Furthermore there's a significant amount of "affordable housing" and public projects sitting on huge multi-billion dollar lots. All that contributes to artificially high prices for everyone else. Most of San Francisco's woes directly result from policy-makers who don't understand basic Economics.
  - malyk 15y ago
    Or who eschew basic economics to provide a place to live for the underprivileged and underserved (in the case of affordable housing).
yuhong 15y ago
I wonder how long this cycle will last.

by roel_v 15y ago

cpeterso 15y ago

San Francisco has apartment rent control so new renters (e.g. young people moving to the city) must pay more to offset landlords' loss of rental income from long-time renters.

davidu 15y ago
Your conclusion is not based with facts. Most landlords in the city do not have rent-controlled properties. That is a fact you can look up in the City websites. Therefore, the argument that rent is going up to offset rent-controlled properties is fallacious. :-)
- rdl 15y ago
  This depends on where in the city you are -- most of the housing stock in SF is pre-1979 construction, and thus IS eligible for rent control. In SoMA, there's a lot of new construction, largely either in the form of condos or big corporate rented buildings (archstone, etc.). Most of the landlords for the older buildings own a small number of units (1-4); the big new buildings might have lots of units but not a lot of individual landlords. Most startup people seem to want to live in the Mission or other older areas, even if they work in SoMA. (something I don't understand; I like the new buildings in SoMA)
  - malyk 15y ago
    I'd chalk wanting to live in the mission or other areas to two things. Most people hate living in large apartment buildings when you can have a sweet victorian flat and the "nightlife" in soma is a totally different vibe than in the mission. Especially the variety of options.
- earl 15y ago
  While it is possible that most landlords don't have rent-controlled properties, I think the majority of renter-occupied housing is subject to rent control. FYI almost anything built prior to 1979 is rent controlled. Also, what sf calls rent controlled is what nyc calls rent stabilized: when tenants leave the landlord can reset the unit to market rents. The law only caps increases while the same tenant lives in the same apartment. data: proportion of renter occupied housing in sf subject to rent control: http://www.thehdmt.org/indicators/view/192 http://www.thehdmt.org/indicators/view/192 2nd map direct link: http://www.thehdmt.org/img/indicators/pdf/RentControlHousingStock.pdf http://www.thehdmt.org/img/indicators/pdf/RentControlHousing...
- cpeterso 15y ago
  > Most landlords in the city do not have rent-controlled properties. But what about tenants? The San Francisco Tenants Union says, "most [San Francisco] tenants are covered by rent control." [1] I couldn't find recent numbers, but the San Francisco Rent Board's 2002 Tenant Survey Summary Report [2] says two-thirds of survey respondents’ units were rent-controlled and 10% were market rate: San Francisco’s rental housing stock is still dominated by rent controlled units. Over two thirds of survey respondents’ units were classified as rent controlled; 13 percent were subsidized or assisted, 10 percent were market rate and the remainder were either occupied by close relatives of the property owner or their market status was undetermined. [1] http://www.sftu.org/rentcontrol.html http://www.sftu.org/rentcontrol.html [2] http://www.sfrb.org/Modules/ShowDocument.aspx?documentid=1885 http://www.sfrb.org/Modules/ShowDocument.aspx?documentid=188...
  - SilasX 15y ago
    All the rent control in the world doesn't mean a thing if a newcomer to SF can't actually rent such a low-priced unit. Here you go: http://sfbay.craigslist.org/sfc/apa/ http://sfbay.craigslist.org/sfc/apa/ Show me where the rent-controlled units I can get are. They don't exist, because whatever ones are out there are either crappy enough to more-than-make up for their cheapness, or snapped up by well-connected people. (Btw, love the URL -- at a glance it reads as stfu, lol.)
roel_v 15y ago
Apart from the other argument made that SF has a low portion of rent-controlled properties (I don't know anything about that really), your reasoning would only work if all landlords would collude in keeping rent prices artificially high; something that is often claimed by those less informed about economics but highly improbably in reality (for a variety of reasons - there is so much literature on why large-scale collusion for price inflation of commodities is implausible that it makes little sense for me to repeat it here). Furthermore, I think you're misunderstanding pricing strategies landlords use to set rent prices. A landlord doesn't (and can't) just say 'oh I need a 4% ROI on my capital, so I need to charge 1200$ of rent for this unit to make up for the 800$ I can charge on the other'. As a landlord, you try to capture as much of the value that consumers are willing to pay for housing as you can. There are various ways of trying that, but all involve variables that are completely separate from the rental income made from other properties (somehow the gambler's fallacy comes to mind, I think both lines of reasoning are in the same class of common cognitive mishaps).
literalusername 15y ago
San Francisco also has an artificial housing shortage caused by enforced height-limits for new buildings. Furthermore there's a significant amount of "affordable housing" and public projects sitting on huge multi-billion dollar lots. All that contributes to artificially high prices for everyone else. Most of San Francisco's woes directly result from policy-makers who don't understand basic Economics.
- malyk 15y ago
  Or who eschew basic economics to provide a place to live for the underprivileged and underserved (in the case of affordable housing).

yuhong 15y ago

I wonder how long this cycle will last.