5 ms·

I think the problem isn't the conversion of rent controlled apartments, it's that there are rent controlled apartments. Rent control artificially limits supply

I think the problem isn't the conversion of rent controlled apartments, it's that there are rent controlled apartments. Rent control artificially limits supply and drives up prices for everyone else. This is one of the few things economists can agree on regardless of political affiliation. This isn't Airbnb's fault.

idlewords 12y ago
Rent control is a political tool that allows at least some poorer people to keep living in the city. The underlying problem is severe and chronic lack of supply in absolute terms. Rent control is a way to mitigate social tension enough so the people on Google buses don't end up with their heads on a pike.
- afafsd 12y ago
  What's the advantage of having poor people living in the city? Is it advantageous to the rich, so they can get a minimum-wage cleaner who doesn't have to commute in from Oakland? Meh, I don't think it makes a big difference. Or is it advantageous to the poor, so that they too can stand in line for a $70 bottomless mimosa brunch every Sunday or buy some nice eighteen-buck cocktails? No, that's stupid, the poor would be better off in a poorer city where (a) everything is cheaper, and (b) they don't have to suffer the indignity of being constantly surrounded by people much more successful than themselves. No poor people live in Beverley Hills, and it works out just fine for them.
  - pjlegato 12y ago
    It is psychologically advantegous for bourgeois bohemians (rich people who profess liberal or leftist political views) to find a way to magnanimously allow a few poor people to live nearby, so they can disingenuously convince themselves that they are part of the solution rather than part of the problem. Voting for housing subsidies is an easy moral balm with no downside; it lets them not feel like total hypocrites for living a high income lifestyle despite professing a profound sympathy for the poor and disadvantaged. Otherwise, they might have to give up their biannual $3,000 laptop upgrades and join the Peace Corps. In that regard, it should be noted that San Francisco's much lauded Below Market Rate (BMR) housing program actually accepts only a tiny fraction of the many eligible applicants, by lottery.[1] The actual impact on the poor at large, or on the social composition of the city, are both marginal. It's a lottery. Running a lottery undoubtedly helps the few winners, but it's not a strategy for helping any significant number of people; it's a strategy for making people feel good about themselves for seeming to help people. [1] For example, the recent Natoma Family Apartments had 60 units available, and 2,800 eligible applicants. If anything, this is an unusually high ratio for San Francisco BMR projects. http://www.sfgate.com/bayarea/article/Affordable-housing-in-S-F-Depends-on-whom-you-5321064.php http://www.sfgate.com/bayarea/article/Affordable-housing-in-...
- saosebastiao 12y ago
  The problem is that this tool to satiate the plebs actually makes the problem worse, because it introduces more plebs. Rent control reduces the quantity and quality of housing. This raises prices, making non-poor people poor.
  - LandoCalrissian 12y ago
    http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-... This is an old Krugman Op-Ed from 2000 that says exactly that.
  - idlewords 12y ago
    "satiate the plebs" - Don't be a jerk.
  - akgerber 12y ago
    Rent control doesn't reduce the quantity of housing when redevelopment, especially denser redevelopment, is essentially illegal due to zoning laws and a lack of by-right development. It might reduce the aggregate quality, but that's a moot question for those who couldn't afford a higher-quality unit. When the number of housing units is essentially fixed, rent control instead redistributes the profit from rental unit price increases from the property owner to the renter. And in a renter-heavy city, renters prefer lower-quality units they can afford to higher-quality units they can't.
- optimusclimb 12y ago
  I'm really sick of this notion that rent control is targeted at the poor in SF. It's not. It's targeted at whoever got there earlier. If you are or have ever been in the market for room shares in SF, you'll know there are TONS of professional workers making a decent wage coasting on rent controlled leases that have somehow been passed along for years paying way less than they should be. I also know tons of professionals making 6 figures+ paying way below market. NOT exactly poor people. How do you think it is for the young kid hired in to work somewhere that has to look for a place in SF while his boss's boss who probably makes 10s of thousands more pays $1300 a month? But wait, that never happens...rent control is for poor people. Yeah right.
  - kingkawn 12y ago
    The only reason rent control has persisted and protected any poor people into this era is that the program does not select based on class or income, but based on who has been there. There are a larger number of poor people who benefit, and some rich people too. This is why it has not gone away, and continues to benefit those poor people who need it most. Like social security.
    - optimusclimb 12y ago
      If the city wants to target the poor, why not pay housing subsidies based on income? If you force owners to rent to people at rates way under what they should be getting, you're just making the owners pay that subsidy. When those owners happen to own multiple units, and new ones open up...they pass those subsidies on to the new renters.
      - wavefunction 12y ago
        And then watch rents rise across the city as land-lords queue up for that sweet-sweet subsidy cash. Perhaps the solution is to spread the economic activity out from where it is concentrated and build more high-density housing near the economic activity despite ensuing NIMBYism.
- pjlegato 12y ago
  Rather, rent control is a wealth transfer from "people who have moved recently" to "people who have not moved recently." Poor people move too, all the time, for the same reasons as anyone else. They're the ones who get screwed the most by rent control when they do. When you move into a new rent-controlled unit, you're subsidizing everyone in all the other properties owned by that landlord who moved in before you. Your personal wealth level has nothing to do with it.
acomjean 12y ago
As someone who lives in a city (cambridge MA) that got rid of rent control, its done little to limit rents going higher and higher. It did spur a lot of renovations though. I think zoning has a lot to do with it. If there is anything that will limit housing supplies its land and zoning. You need to get the zoning right and developers will show up to build more housing if the rents make it worth it.

idlewords 12y ago

Rent control is a political tool that allows at least some poorer people to keep living in the city. The underlying problem is severe and chronic lack of supply in absolute terms. Rent control is a way to mitigate social tension enough so the people on Google buses don't end up with their heads on a pike.

afafsd 12y ago
What's the advantage of having poor people living in the city? Is it advantageous to the rich, so they can get a minimum-wage cleaner who doesn't have to commute in from Oakland? Meh, I don't think it makes a big difference. Or is it advantageous to the poor, so that they too can stand in line for a $70 bottomless mimosa brunch every Sunday or buy some nice eighteen-buck cocktails? No, that's stupid, the poor would be better off in a poorer city where (a) everything is cheaper, and (b) they don't have to suffer the indignity of being constantly surrounded by people much more successful than themselves. No poor people live in Beverley Hills, and it works out just fine for them.
- pjlegato 12y ago
  It is psychologically advantegous for bourgeois bohemians (rich people who profess liberal or leftist political views) to find a way to magnanimously allow a few poor people to live nearby, so they can disingenuously convince themselves that they are part of the solution rather than part of the problem. Voting for housing subsidies is an easy moral balm with no downside; it lets them not feel like total hypocrites for living a high income lifestyle despite professing a profound sympathy for the poor and disadvantaged. Otherwise, they might have to give up their biannual $3,000 laptop upgrades and join the Peace Corps. In that regard, it should be noted that San Francisco's much lauded Below Market Rate (BMR) housing program actually accepts only a tiny fraction of the many eligible applicants, by lottery.[1] The actual impact on the poor at large, or on the social composition of the city, are both marginal. It's a lottery. Running a lottery undoubtedly helps the few winners, but it's not a strategy for helping any significant number of people; it's a strategy for making people feel good about themselves for seeming to help people. [1] For example, the recent Natoma Family Apartments had 60 units available, and 2,800 eligible applicants. If anything, this is an unusually high ratio for San Francisco BMR projects. http://www.sfgate.com/bayarea/article/Affordable-housing-in-S-F-Depends-on-whom-you-5321064.php http://www.sfgate.com/bayarea/article/Affordable-housing-in-...
saosebastiao 12y ago
The problem is that this tool to satiate the plebs actually makes the problem worse, because it introduces more plebs. Rent control reduces the quantity and quality of housing. This raises prices, making non-poor people poor.
- LandoCalrissian 12y ago
  http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-... This is an old Krugman Op-Ed from 2000 that says exactly that.
- idlewords 12y ago
  "satiate the plebs" - Don't be a jerk.
- akgerber 12y ago
  Rent control doesn't reduce the quantity of housing when redevelopment, especially denser redevelopment, is essentially illegal due to zoning laws and a lack of by-right development. It might reduce the aggregate quality, but that's a moot question for those who couldn't afford a higher-quality unit. When the number of housing units is essentially fixed, rent control instead redistributes the profit from rental unit price increases from the property owner to the renter. And in a renter-heavy city, renters prefer lower-quality units they can afford to higher-quality units they can't.
optimusclimb 12y ago
I'm really sick of this notion that rent control is targeted at the poor in SF. It's not. It's targeted at whoever got there earlier. If you are or have ever been in the market for room shares in SF, you'll know there are TONS of professional workers making a decent wage coasting on rent controlled leases that have somehow been passed along for years paying way less than they should be. I also know tons of professionals making 6 figures+ paying way below market. NOT exactly poor people. How do you think it is for the young kid hired in to work somewhere that has to look for a place in SF while his boss's boss who probably makes 10s of thousands more pays $1300 a month? But wait, that never happens...rent control is for poor people. Yeah right.
- kingkawn 12y ago
  The only reason rent control has persisted and protected any poor people into this era is that the program does not select based on class or income, but based on who has been there. There are a larger number of poor people who benefit, and some rich people too. This is why it has not gone away, and continues to benefit those poor people who need it most. Like social security.
  - optimusclimb 12y ago
    If the city wants to target the poor, why not pay housing subsidies based on income? If you force owners to rent to people at rates way under what they should be getting, you're just making the owners pay that subsidy. When those owners happen to own multiple units, and new ones open up...they pass those subsidies on to the new renters.
    - wavefunction 12y ago
      And then watch rents rise across the city as land-lords queue up for that sweet-sweet subsidy cash. Perhaps the solution is to spread the economic activity out from where it is concentrated and build more high-density housing near the economic activity despite ensuing NIMBYism.
pjlegato 12y ago
Rather, rent control is a wealth transfer from "people who have moved recently" to "people who have not moved recently." Poor people move too, all the time, for the same reasons as anyone else. They're the ones who get screwed the most by rent control when they do. When you move into a new rent-controlled unit, you're subsidizing everyone in all the other properties owned by that landlord who moved in before you. Your personal wealth level has nothing to do with it.

acomjean 12y ago

As someone who lives in a city (cambridge MA) that got rid of rent control, its done little to limit rents going higher and higher. It did spur a lot of renovations though. I think zoning has a lot to do with it. If there is anything that will limit housing supplies its land and zoning. You need to get the zoning right and developers will show up to build more housing if the rents make it worth it.