4 ms·

Assuming they live in a unit subject to The Ellis Act, SF renters benefit from ludicrous amounts of rent control that cause unending headaches for small-scale l

• driverdan 13y ago
  Good to see Krugman actually got something right, even if it was back in 2000. SF has many ridiculous laws pertaining to real estate and rentals. If they got rid of rent control and eased their building restrictions they'd have more housing and more affordable housing.
  • dclowd9901 13y ago
    They would certainly have more housing, but I'm pretty sure it wouldn't be any more affordable. There is simply more people who want to live there than it could possibly support, even now. Hell, I'm a developer and I can't even afford to live there.
    • malandrew 13y ago
      It most certainly would be more affordable, but just not immediately. There is a backlog of 30+ years of market correction to endure before things return to where they should be. How quickly that correction occurs depends on the political will of those governing the city.
  • SilasX 13y ago
    Wait until rent control becomes as politically popular as the minimum wage. Or when academics start scouring for positive effects of RC as hard as they do for the MW (and get the inevitable validating study). Then, he will almost certainly come out in favor.
  • mmanfrin 13y ago
    Good to see Krugman actually got something right Implying that he (nobel laureate) is usually incorrect in his assessments?
  • anigbrowl 13y ago
    Actually, they wouldn't - but I'm going to preface my comment with Krugman's observation that 'So now you know why economists are useless: when they actually do understand something, people don't want to hear about it.' Also, the argument below doesn't mean I'm endorsing the status quo in SF city politics. The problems are twofold: geography, and the fact that SF doesn't operate in a vacuum. Geographically, there's water on 3 sides and hills on the 4th. No matter what you do SF is always going to engaged in an uphill fight against density because it's almost as much of an island as Manhattan is. The vacuum is the bigger problem. Even if the mayor and board of supervisors agreed to abolish the planning commission tomorrow and hand out permits to any proposal compliant with building safety codes, it would not do much to accelerate building. Why? Because neighbors would sue under CEQA, the California Environmental Quality Act. This allows virtually anyone to file a suit alleging that a negative impact on the environment or an insufficiency in the preparation of an environmental impact report, anywhere in CA. This is not just 'the environment' in terms of wild salmon or old-growth forest, though - it includes everything from air quality to aesthetics. I'm expecting to be invited to join a suit on this because I live close to a hospital which is planning a large expansion, and the neighbors a few blocks away are furious about the likely change in traffic patterns and noise during the construction phase, which will last a few years. I don't actually care about this, but on the other hand I have misgivings about the proposed siting of a helipad right across the street from me. And this leads to the observation that while CEQA has become a go-to example of obstructive red tape/environmentalism gone mad in California, it's actually just a culmination of much longer-standing legal traditions benefiting property owners. Any place that you have sufficient density for people and businesses to annoy each other, property owners end up in court with disputes about who should give way to whom. Grumble as one might about property taxes, nobody wants the value of their property to go down, either on paper in the more abstract sense of having less enjoyment due to (say) a reduction in the pleasantness of one's view or the amount of sunlight one's garden receives (which factors ultimately affect the $ value of their property anyway). If you have paid $$$ to buy a fancy loft with an amazing view of the SF skyline, you and your neighbors are going to be most unhappy if some developer proposes erecting a skyscraper and replacing your view with that of a concrete wall 30 feet away. In a more general context, people are much less enthusiastic about paying property taxes for parks and schools if the erection of tall buildings blocks sunlight from ever reaching them (and that particular complaint is a frequent one in SF, where the hilly geography tends to exacerbate the issue). The complaints of property owners carry a great deal of weight in arguments over planning, since they provide a large part of the current tax base (vs the hypothetical future tax revenue of any given development) and angry taxpayers are highly likely to vote out officials who don't do their bidding and vote in those who are willing to pass laws restricting the use or development of property. Indeed, annoyed property owners have historically not just objected to new development but have often successfully argued for a halt to existing land use which impacts their enjoyment of property: in a famous English legal case, Sturges v. Bridgeman (1879), a doctor bought a house in a nice neighborhood and then successfully sued a nearby candy-maker, who had been there for years, over the noise of the candy-making. The court reasoned that while the candy maker had indeed been there first, the business was much noiiser than anything else in the neighborhood and it was only a matter of time before someone brought it up, regardless of the fact that the doctor had 'come to the nuisance.' That seems wacky, but think about it in the context of a city like SF that used to have a lot more light industry inside the city borders. If you know the city well at street level, I'm sure you've come across places where there's a bunch of shiny new apartments and hip restaurants, stores etc., except for that one wierd lot with a run down small manufactory/liquor store whatever, that either doesn't fit with the neighborhood any mroe or whose customers have gone away due to changes in traffic patterns. The business situated there makes less and less money, the owners maintain it less and less well, and eventually someone launches a blight lawsuit in an attempt to force the current occupant out. The practical upshot of this for development is that a developer has to take into account the loss-of-value that a project will impose upon neighboring property as a potential development cost, and a wise developer will secure their agreement by offering to pay that cost to the neighbors up front, because otherwise they'll probably just end up paying the same amount in damages later (unless they gamble on winning an arms race of legal transaction costs, which is much more viable in rural than urban areas).
• dnr 13y ago
  I think you're confusing the Ellis Act with the SF Rent Ordinance, which establishes rent control and other things. The Ellis Act is generally considered to be hostile to tenants and friendly to landlords (as it sets up a sort of loophole to evict rent-controlled tenants).
  • varelse 13y ago
    Viewed as hostile to tenants by tenants I expect. It's a pretty expensive loophole that I've personally seen bring small landlords to economic ruin. After all, heaven forbid we allow property owners to have control over their own property at any time.
    • dnr 13y ago
      That doesn't make much sense to me: doing an Ellis eviction is a voluntary act by a landlord. If it would bring them to ruin, why would they initiate it? (I hope your second paragraph wasn't directed at me. I haven't given any indication of my opinions on the laws in question.)
      • varelse 13y ago
        In the case of my friend, because she could no longer afford to subsidize the rent of the tenant and they've decided that if they have to pay the mortgage and property taxes of the unit, they might as well live in it (or in the case of the friend, she wanted to move her parents into the unit as opposed to into assisted living). But even if she just wanted to personally sunbathe in each room of the unit, WTH should such a landlord have to pay a cent towards the relocation expenses of the soon to be ex-tenant? I'm a pretty liberal guy in most ways, but this is utter BS entitlement IMO.