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What's the not-asshole thing to do when you find out you could be making a profit literally ten times as big as your current profit? Especially when you know th

by Kalium 12y ago

What's the not-asshole thing to do when you find out you could be making a profit literally ten times as big as your current profit? Especially when you know the supply being competed over won't be changing much.

kelnos 12y ago
The not-asshole thing to do is to continue making your current profit. Or hell, raise it a little, but not enough to make it financially untenable for your current tenant to live there. You think it's ok to do something that will benefit your bank account but will simultaneously force someone to move out of their home? Enriching yourself at the expense of others is an asshole move, to me at least.
- Kalium 12y ago
  > The not-asshole thing to do is to continue making your current profit. Or hell, raise it a little, but not enough to make it financially untenable for your current tenant to live there. So every lease becomes a lifetime deal. Hmm. Since rent keeps going up, this means prices are going to have to go up dramatically now so that I'm not completely hosed in ten to twenty years. After all, rent control increase caps are pretty much always below property tax increase caps. Long-term, me-the-landlord is going to be put in a situation where rent doesn't even cover taxes. Nevermind repairs, maintenance, and insurance. > You think it's ok to do something that will benefit your bank account but will simultaneously force someone to move out of their home? Huh. I guess evictions for non-payment are out now. After all, it's their home, and it would be evil for me to evict someone from their home just for the sake of my bank account... Between this and your previous point, you've made an excellent case that a moral and ethical person who owns property in SF would refuse to rent it under any circumstances. Well done. > Enriching yourself at the expense of others is an asshole move, to me at least. Are you aware that you just defined turning a profit as an asshole move? Perhaps you want to rethink your definition.
  - kelnos 12y ago
    > Are you aware that you just defined turning a profit as an asshole move? Perhaps you want to rethink your definition. Nowhere did I say that, and I'll thank you to not put words in my mouth. Actually, interestingly, you've now also defined profit as a zero-sum game across society. For some to be enriched, others must falter and be brought lower. If that's what profit is, then yes, I do believe profit is an asshole move. (But I don't think that's what profit is!) It's entirely possible for landlords to raise rents in such a way that continues to cover their costs, continues to provide a tidy profit margin, but does not displace tenants. That's why I said it's possible to maintain your current profit (which you could consider a fixed dollar amount or a percentage, and my argument still holds) and did NOT say maintain your current rent.
    - Kalium 12y ago
      > Actually, interestingly, you've now also defined profit as a zero-sum game across society. For some to be enriched, others must falter and be brought lower. OK. What nuance of your stated position did I mistake? In what way do you make a profit and enrich yourself without it coming at the expense of another? Bear in mind that trading something of yours for money from someone else is very literally a trade taking place at their expense - they are spending money. > It's entirely possible for landlords to raise rents in such a way that continues to cover their costs, continues to provide a tidy profit margin, but does not displace tenants. Not when prop 13 caps are generally higher than rent control caps. Over time, a property-owner will lose ground and their margin will shrink as their costs increase faster than their incomes. In practice, this manifests as landlords deciding not to invest in the upkeep and maintenance so they can preserve their profit margins.
      - kelnos 12y ago
        Not when prop 13 caps are generally higher than rent control caps. I don't believe we're talking about rent control here, or at least not exclusively. The original article is about someone's rent increasing by over 400%. I can't imagine how that could be justified by cost increases on the landlord's side. I'm not arguing that the current system of rent control and property tax increase limits is working properly and is the best way to do things. At any rate, you're re-framing the argument here to try to make me look bad. Your original question asked about landlords making 10x of their existing profit. If the landlord is already making a profit (which was the premise of your question), clearly they're not having issues making money in a rent-control+prop 13 environment. There are many multipliers between 0x and 10x, and I would argue that the responsible multiplier in order to maintain non-asshole status is well below 10... and even well below 1... but certainly greater than 0. Just to be clear, though, to reiterate my initial point and make my position clear: if you're making a $500 profit off a $2000 monthly rental, and decide that you can and should make $5000 (a 10x increase in profit) by raising the rent to $7000, if that's at the expense of the renter's ability to pay... yes, it is my opinion that you're an asshole. That is the original question you asked, and that's the question I answered.
- harryh 12y ago
  What about the other person who really wants to move to SF, is willing to pay more than your current tenant, but now can't because there is so little other supply available the market price on those is through the roof? Do we just not care about that person?
  - kelnos 12y ago
    If that person's ability to move to SF hinges on someone else getting kicked out of their home and city, then no, I don't care about that person. But I'd rather be able to care about both people. I'd rather SF's planning process wasn't so idiotic that it's impossible to build at the rate we need to in order to house everyone who wants to live here, at whatever economic level. I'd rather that rent control hadn't helped to foster a culture of NIMBYism that causes all new projects to get shot down, drastically scaled down, or at best delayed several years. The main priority in getting ourselves out of this housing crisis should be to build like crazy, and accept that neighborhoods will change, and the city will change. Once we've done that, and demand has stabilized, we can do things like eliminate or drastically scale back rent control, or at least make it more sane. But for now I believe it's necessary to avoid screwing people over.
    - Kalium 12y ago
      So, your answer is to assert privilege - they were there first, so they deserve it more, go fuck off. What's been noted repeatedly across history is that rent control tends strongly to encourage a culture of NIMBYIsm. Rent control has contributed heavily to creating the current situation and its persistence increases the political resistance to building more housing. Have you not noticed the routine grumbling about extending rent control to new housing and different kinds of housing? That scares the crap out of would-be builders and investers. Couple that with moralizing about how profit margins need to be razor-thin to be morally acceptable, and the scenarios you imagine are ones in which no developer is willing to work. The result is pretty much what we have now - not enough building. If rent control were relaxed now, or even made hugely more difficult to extend, those fears would be reduced. But right now? Rent control has created a witch's brew for political stasis. That's what you wanted, right? To enable privilege for people who are deserving by virtue of living in sufficiently old housing?

by Kalium 12y ago

kelnos 12y ago

The not-asshole thing to do is to continue making your current profit. Or hell, raise it a little, but not enough to make it financially untenable for your current tenant to live there. You think it's ok to do something that will benefit your bank account but will simultaneously force someone to move out of their home? Enriching yourself at the expense of others is an asshole move, to me at least.

Kalium 12y ago
> The not-asshole thing to do is to continue making your current profit. Or hell, raise it a little, but not enough to make it financially untenable for your current tenant to live there. So every lease becomes a lifetime deal. Hmm. Since rent keeps going up, this means prices are going to have to go up dramatically now so that I'm not completely hosed in ten to twenty years. After all, rent control increase caps are pretty much always below property tax increase caps. Long-term, me-the-landlord is going to be put in a situation where rent doesn't even cover taxes. Nevermind repairs, maintenance, and insurance. > You think it's ok to do something that will benefit your bank account but will simultaneously force someone to move out of their home? Huh. I guess evictions for non-payment are out now. After all, it's their home, and it would be evil for me to evict someone from their home just for the sake of my bank account... Between this and your previous point, you've made an excellent case that a moral and ethical person who owns property in SF would refuse to rent it under any circumstances. Well done. > Enriching yourself at the expense of others is an asshole move, to me at least. Are you aware that you just defined turning a profit as an asshole move? Perhaps you want to rethink your definition.
- kelnos 12y ago
  > Are you aware that you just defined turning a profit as an asshole move? Perhaps you want to rethink your definition. Nowhere did I say that, and I'll thank you to not put words in my mouth. Actually, interestingly, you've now also defined profit as a zero-sum game across society. For some to be enriched, others must falter and be brought lower. If that's what profit is, then yes, I do believe profit is an asshole move. (But I don't think that's what profit is!) It's entirely possible for landlords to raise rents in such a way that continues to cover their costs, continues to provide a tidy profit margin, but does not displace tenants. That's why I said it's possible to maintain your current profit (which you could consider a fixed dollar amount or a percentage, and my argument still holds) and did NOT say maintain your current rent.
  - Kalium 12y ago
    > Actually, interestingly, you've now also defined profit as a zero-sum game across society. For some to be enriched, others must falter and be brought lower. OK. What nuance of your stated position did I mistake? In what way do you make a profit and enrich yourself without it coming at the expense of another? Bear in mind that trading something of yours for money from someone else is very literally a trade taking place at their expense - they are spending money. > It's entirely possible for landlords to raise rents in such a way that continues to cover their costs, continues to provide a tidy profit margin, but does not displace tenants. Not when prop 13 caps are generally higher than rent control caps. Over time, a property-owner will lose ground and their margin will shrink as their costs increase faster than their incomes. In practice, this manifests as landlords deciding not to invest in the upkeep and maintenance so they can preserve their profit margins.
    - kelnos 12y ago
      Not when prop 13 caps are generally higher than rent control caps. I don't believe we're talking about rent control here, or at least not exclusively. The original article is about someone's rent increasing by over 400%. I can't imagine how that could be justified by cost increases on the landlord's side. I'm not arguing that the current system of rent control and property tax increase limits is working properly and is the best way to do things. At any rate, you're re-framing the argument here to try to make me look bad. Your original question asked about landlords making 10x of their existing profit. If the landlord is already making a profit (which was the premise of your question), clearly they're not having issues making money in a rent-control+prop 13 environment. There are many multipliers between 0x and 10x, and I would argue that the responsible multiplier in order to maintain non-asshole status is well below 10... and even well below 1... but certainly greater than 0. Just to be clear, though, to reiterate my initial point and make my position clear: if you're making a $500 profit off a $2000 monthly rental, and decide that you can and should make $5000 (a 10x increase in profit) by raising the rent to $7000, if that's at the expense of the renter's ability to pay... yes, it is my opinion that you're an asshole. That is the original question you asked, and that's the question I answered.
harryh 12y ago
What about the other person who really wants to move to SF, is willing to pay more than your current tenant, but now can't because there is so little other supply available the market price on those is through the roof? Do we just not care about that person?
- kelnos 12y ago
  If that person's ability to move to SF hinges on someone else getting kicked out of their home and city, then no, I don't care about that person. But I'd rather be able to care about both people. I'd rather SF's planning process wasn't so idiotic that it's impossible to build at the rate we need to in order to house everyone who wants to live here, at whatever economic level. I'd rather that rent control hadn't helped to foster a culture of NIMBYism that causes all new projects to get shot down, drastically scaled down, or at best delayed several years. The main priority in getting ourselves out of this housing crisis should be to build like crazy, and accept that neighborhoods will change, and the city will change. Once we've done that, and demand has stabilized, we can do things like eliminate or drastically scale back rent control, or at least make it more sane. But for now I believe it's necessary to avoid screwing people over.
  - Kalium 12y ago
    So, your answer is to assert privilege - they were there first, so they deserve it more, go fuck off. What's been noted repeatedly across history is that rent control tends strongly to encourage a culture of NIMBYIsm. Rent control has contributed heavily to creating the current situation and its persistence increases the political resistance to building more housing. Have you not noticed the routine grumbling about extending rent control to new housing and different kinds of housing? That scares the crap out of would-be builders and investers. Couple that with moralizing about how profit margins need to be razor-thin to be morally acceptable, and the scenarios you imagine are ones in which no developer is willing to work. The result is pretty much what we have now - not enough building. If rent control were relaxed now, or even made hugely more difficult to extend, those fears would be reduced. But right now? Rent control has created a witch's brew for political stasis. That's what you wanted, right? To enable privilege for people who are deserving by virtue of living in sufficiently old housing?