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This suggests there are land owners who are growing rich on the backs of the prosperous tech community. I always find it strange that articles on this topic go
by iandanforth 13y ago
This suggests there are land owners who are growing rich on the backs of the prosperous tech community.
I always find it strange that articles on this topic go directly from wages to rent prices without acknowledging there is a human making the decision to raise rent in between. It's as if people have begun to believe that the relationship between demand and increased prices is a physical law rather than a societal tendency.
Consider the following alternatives. 1. A land owner decides not to raise the rent on their properties. (It might shock some to know that people do, willingly leave money on the table for all sorts of reasons) 2. Regulation fetters rent increases to prevent people from having to leave their homes.
I think there are many good examples where the above do not, and have not happened. But I take issue with the blindspot, or purposeful omission, of such discussion. Perhaps I am being overly harsh on readers of such articles, but I suspect that by omitting these considerations, you decrease the chance that one will call for property tax controls, rent caps, or organize local property owners into a self-regulating body to limit rent increases.
- raldi 13y ago> A land owner decides not to raise the rent on their properties. If a landlord has fifty prospective tenants (as they surely will if they're offering the best deal in town), how should they whittle that down if not by raising the asking price?
- nitrogen 13y agoBy choosing one at random, perhaps?
- YokoZar 13y agoMore realistically, through an arbitrary emotional choice. There's a reason stories of housing discrimination generally center around communities employing rent control. When faced with more tenants than they know what to do with, landlords have way less financial consequences from doing all manner of unfortunate things.
- masterleep 13y agoWhat an inefficient idea. Better to give it to the person who values it the most, as signified by the price they are willing to pay.
- rbanffy 13y agoIf you make someone pay more for the same thing that was worth less before, did you increase the value of the thing or decrease the value of money?
- masterleep 13y agoI don't think "you" did anything. It was the preferences and decisions of millions of cooperating parties that affected underlying value.
- raldi 13y agoYeah, Chapter One of any economics textbook makes clear that it takes two to tango. Actually, a lot more than two.
- nitrogen 13y agoScrew "efficiency." Why should rent in urban areas be $3500 for one person just because someone can afford it? People on HN love to talk about how suburbs are destroying the planet, then others turn around and claim that impossibly high rents in urban centers is "efficient"?
- rdtsc 13y agoVery easy, pick the ones more likely to stay around, more likely to not damage the place, more likely to not cause a nuisance. Now of course it is silly. Why would they not just raise the price? Unless they do what they do for fun or provide a public charity or good, why sift through hundreds of cred reports and pay marketing researches or run a lottery of sorts if say it is easier to just say "ok, rent is now 20% higher".
- raldi 13y agoIf there were a way to know in advance that a prospective tenant was going to damage the place or be a nuisance, or to stay a long / short time (whichever is worse) wouldn't landlords already be using that technique?
- rdtsc 13y agoThey do and try if it is quick. Credit reports are used as a proxy "Paid back his bills = proxy for will probably not skip on rent and trash the place". Others could use social status, for example, maybe other un-expected clues. Would it be illegal to create national black lists that land-lords can share? Casinos do it... It is just not worth bothering probably. It just doesn't pay to worry about it if can just raise the price. The price to fix-up and absorb the damage from a few such incidents is folded into the insurance and current rent price.
- prostoalex 13y agoSome landlords do that by offering discounts for signing a multi-year lease.
- Spooky23 13y agoBecause when the good times stop rolling, these high-earning tech workers getting bussed in to wherever they go will vanish. My uncle owned a few properties, mostly outright with no mortgages. Once he found a good tenant, he'd generally only raise the rents to absorb new property taxes. Everything has a price. If your investment horizon is 30 years vs 30 months, the safe gets are good bets.
- raldi 13y agoYour comment seems to be answering some question other than the one I asked.
- deleted 13y ago[deleted]
- nitrogen 13y agoI always find it strange that articles on this topic go directly from wages to rent prices without acknowledging there is a human making the decision to raise rent in between. There's also a confounding factor thrown in by the IRS: as I understand it, landlords are not allowed to claim losses on rental properties unless they charge above median rent for the area, without regard to property age or condition. Thus, there is a constant upward pressure on rent prices, especially for lower cost units.
- iandanforth 13y agoInteresting. I wasn't aware of that incentive. Thanks!
- GFK_of_xmaspast 13y ago"This suggests there are land owners who are growing rich on the backs of the prosperous tech community" I wouldn't think this was at all in doubt?
- rdtsc 13y agoThere would probably be a consolidation happening. In such a hot area, those that have large resources would probably come in and just try to buy blocks at a time if they can. I imagine in a while you'd find that some prince from Saudi Arabia owns whole neighborhoods.
- GFK_of_xmaspast 13y agoThen some landlords would 'grow rich' from selling property made more valuable by etcetcetc.
- prostoalex 13y agoEQR and AVB, both with significant ownership in Bay Area, are publicly traded.
- malandrew 13y agoThat's pretty much the side of the story that is never told. The newspapers only like to talk about the San Franciscans that are renters and find themselves forced out and completely omit the San Franciscans that are owners that realize they can make a great stable income taking advantage of the high rents if they are willing to live farther away. I'd love to see the following headline one day "Increased housing demand from techies; Some San Franciscans win, some lose." Furthermore, I'd love to see the following headline too: "Why can't renting native San Franciscans count on those San Franciscans that own homes to choose them over techies when choosing who to rent to?" The situation is absurd and it sucks for everyone, but if anyone should get the blame it is the housing owners. Ultimately, they can choose who to rent to and do have the right of renting to a fellow San Franciscan over a Google employee willing and able to pay a lot more. I really want to see the same people protesting the busses spend half their time blocking buses and half the time on the front lawns of those San Franciscans who've moved to the suburbs, but still own housing in San Francisco that they keep raising the rents on. Personally, I think those housing owners are right to accept a higher rent. Years ago they made the right choice to buy rather than rent while others took accepted their rent controlled apartment and ignored the housing problem until it was beyond their capacity to solve.