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The article is a Rorschach test for housing policy. Do you see yourself as the vulnerable elderly tenant, forced to move and abandon your longtime existence? Or

by desuma 13y ago

The article is a Rorschach test for housing policy. Do you see yourself as the vulnerable elderly tenant, forced to move and abandon your longtime existence? Or the kindly landlord, trapped between two contradictory legal regimes? I live in San Francisco, and own a 2-unit building in the heart of the tech shuttle stops near Dolores Park. I had rented in the city for years before that. I couldn't have bought my place (almost unlivably dilapidated in the 2009 downturn) without a job at Google and help from my college friend who agreed to rent one of the apartments, despite the hot tub installed in the living room by the previous owner. Sadly, she's moving out this summer. Almost all of my friends rent, and very few of them work in tech. My partner is an artist, and his contribution to SF culture is an irreplaceable part of what makes SF great, but it's not remotely competitive financially with tech. I've personally benefitted from the city and its business and social cultures. I have a duty to pay it back. But I won't rent the vacant apartment, because renting to someone is a commitment more permanent than marriage. My house - not accounting for the insane appreciation - is more than 50% of my net assets. It'd be irresponsible. There has to be some protection for the cultural core of San Francisco, given its status as a boom-bust town. Rent stabilization, a la NYC. A maximum-allowable rent increase, tied to inflation. But there also needs to be a lot more housing. Rent control is a populist disaster that sounds great - remember "The rent is too damn high!"? - but actually accomplishes the reverse of its stated intent. The current political paralysis is a nightmare, and a fascinating window onto the class politics that our modern scaled economy is creating.

100k 13y ago
Granted it is very hard to evict a rent-controlled tenant in San Francisco, so I can understand your trepidation, but San Francisco rent control already works pretty much like your prescription: there is an annual allowed rent increase, and rents reset when the tenant moves out. In other words, this is "soft" rent control as opposed to "hard" rent control where prices are fixed, essentially forever. https://www.aeaweb.org/articles.php?doi=10.1257/jep.9.1.99 https://www.aeaweb.org/articles.php?doi=10.1257/jep.9.1.99
- desuma 13y ago
  The linked article is great reading, thanks! It's true that landlords can set the price of a vacant unit arbitrarily, unlike say NYC's rent stabilization, which limits increases even between tenants. However, I'd argue SF rent control isn't very "soft" by the article's definition - there's no hardship or rate of return provisions for the landlord, and during a tenant's stay, the allowable increases are negligible (less than CPI/inflation and certainly much less than market rate you'd expect on an investment with similar risk). Because a landlord has to evaluate a potential tenant for a lifetime lease, a lot of the same negative dynamics apply during the rental transaction. The landlord is trying to reduce their uncertainty - finding a tenant who will not only pay the greatest possible rent, but also stay for the shortest possible time. As market prices rise, tenants of rent-controlled units are highly incentivized to stay in their current home, because a new lease would be so much more expensive. This further reduces the available supply. It gets even worse when you consider the variety of protected classes SF rental law has created. Elderly and disabled tenants cannot be evicted without special cause, even if they've stopped paying rent years ago. The intent of the law is good: to protect vulnerable populations who would suffer greatly if they were evicted. But in effect, it only protects vulnerable tenants who already have a lease. Every other member of that class will find it much harder to find housing, because their tenancy comes with strings attached. There are anti-discrimination provisions in housing law, but in a competitive market, those are incredibly difficult to enforce.

by desuma 13y ago

100k 13y ago

Granted it is very hard to evict a rent-controlled tenant in San Francisco, so I can understand your trepidation, but San Francisco rent control already works pretty much like your prescription: there is an annual allowed rent increase, and rents reset when the tenant moves out. In other words, this is "soft" rent control as opposed to "hard" rent control where prices are fixed, essentially forever. https://www.aeaweb.org/articles.php?doi=10.1257/jep.9.1.99 https://www.aeaweb.org/articles.php?doi=10.1257/jep.9.1.99

desuma 13y ago
The linked article is great reading, thanks! It's true that landlords can set the price of a vacant unit arbitrarily, unlike say NYC's rent stabilization, which limits increases even between tenants. However, I'd argue SF rent control isn't very "soft" by the article's definition - there's no hardship or rate of return provisions for the landlord, and during a tenant's stay, the allowable increases are negligible (less than CPI/inflation and certainly much less than market rate you'd expect on an investment with similar risk). Because a landlord has to evaluate a potential tenant for a lifetime lease, a lot of the same negative dynamics apply during the rental transaction. The landlord is trying to reduce their uncertainty - finding a tenant who will not only pay the greatest possible rent, but also stay for the shortest possible time. As market prices rise, tenants of rent-controlled units are highly incentivized to stay in their current home, because a new lease would be so much more expensive. This further reduces the available supply. It gets even worse when you consider the variety of protected classes SF rental law has created. Elderly and disabled tenants cannot be evicted without special cause, even if they've stopped paying rent years ago. The intent of the law is good: to protect vulnerable populations who would suffer greatly if they were evicted. But in effect, it only protects vulnerable tenants who already have a lease. Every other member of that class will find it much harder to find housing, because their tenancy comes with strings attached. There are anti-discrimination provisions in housing law, but in a competitive market, those are incredibly difficult to enforce.