California Approves Statewide Rent Control - <AUTHOR> https://www.nytimes.com/2019/09/11/business/economy/california-rent-control.html <comment><USER2> I am a landlord in Oregon, but not California. The curious, although ultimately predictable, outcome of the new rent control measure in Oregon is that while I have historically had an arrangement with my property management to be restrained in annual rent increases, they are now advising a default annual increase of the maximum allowed (7 percent before inflation). This is because larger adjustments cannot be made if and when necessary due to market conditions, so it's smart to just steadily increase rent at the maximum rate permitted. If I agree, I believe the result will be more profitable for landlords, and hurtful to tenants.

The real solution to a housing problem is to incentivize and facilitate the building of more housing. ADUs, relaxed zoning, reduced building regulations, reduced fees for permitting, etc. I fear rent control is actually going to do more damage to the housing market than good.

<comment><USER3> The entire point of the law is to prevent you from being able to make those larger adjustments, though.

How often do you replace tenants? And what's your occupancy rate? If you're in a situation where you can reliably raise rent 7% YoY indefinitely without decreasing your occupancy rate, then you were severely underpriced for the market (and you should probably fire that management company for pricing you that absurdly low). 7% YoY after inflation is a big increase that outstrips average wage increases.

If you aren't severely underpriced, then what's going to happen is that when you increase by 7%, the tenants will choose to end the lease because they can find something cheaper (or they emmigrate from the city because nothing is affordable), and you'll struggle to replace them with wealthier tenants willing to pay what you think is market price, so you'll have to lower rent to attract a tenant. Once you get to the point where your price is roughly in line with what the market will bear, you'll only be able to squeeze one or two years of rent increases out of a tenant before the non-monetary costs of moving are outweighed by the cheaper rent, so constantly trying for 7% YoY post inflation will just mean a decrease in your occupancy rate, both because you'll be replacing tenants more frequently and because finding new ones will take longer.

<comment><USER4> What in your second paragraph doesn't apply without rent control? In other words, what makes 7% the magic number? Your entire argument seems based on market forces (if you raise too much, your tenant leaves and if there's no wealthy people to replace them, you're stuck). How is this not the case without rent control? Do wealthy tenants somehow appear without rent control?

<comment><USER3> Nothing. The parent comment was arguing that because the law now says that rent couldn't increase by more than 7% they were now being advised to increase rent by that much every year (ostensibly because they are now planning to do this), and my response is that it's absurd to claim that anything in the law will change things so that you could make that sort of increase now if you couldn't already make that increase before the law existed.

<comment><USER5> Many landlords are not paperclip maximizers. REITs are, but small time families often charge below-market rents to the long term tenants they personally like or can't be bothered to replace. They feel comfortable doing this because they can always revert to market rate later. With that long-term optionality going away, some will revert to market rate or as close as legally possible right now.

<comment><USER6> So in other words, landlords love to reserve the right to kick a tenant they stop liking out at the drop of a hat for no specific reason, by jacking the rent up as high as they want. As compensation for this power, they are willing to charge well below market rates to help indigent tenants.

If they lose this "right", they insist on becoming pure profit maximizing machines?

<comment><USER7> > So in other words, landlords love to reserve the right to kick a tenant they > stop liking out at the drop of a hat for no specific reason, by jacking the > rent up as high as they want.

It's disingenuous to pretend like the landlord is the only party with any control. Landlords cannot remove a tenant at "the drop of a hat" by any stretch of the imagination, nor can they arbitrarily increase rental prices. Rentals usually involve a lease that protects the tenant from arbitrary removal and price modifications as much as it protects the landlord from unexpected vacancy. If you're renting, you should know when your lease is up and know that the landlord has the option not to renew and/or to modify the price. (If you're in California, you should also know that the new law punishes your landlord for trying to do you a solid and keep your rent stable across lease terms.)

On top of conventional lease protections, virtually every state has default tenant protections written into statute that can't be overridden by lease agreements, and that include a default implicit month-to-month tenancy term, providing at least basic protection from out-of-the-blue demands to vacate.

If an eviction must occur, it has to be conducted as prescribed in state law. Tenants overstaying or defaulting on their leases frequently can't be removed without 3-6 months of legal wrangling, which is no fun.

<comment><USER3> >>> (If you're in California, you should also know that the new law punishes your landlord for trying to do you a solid and keep your rent stable across lease terms.)

The CA law allows the rental price to reset to market rate for a new tenant, so unless the landlord doing you a solid was planning to stick you specifically with a rent increase down the line to recapture the present solid, they can still keep your rent stable across lease terms.

<comment><USER8> I am a CA landlord of a single house. Keeping track of "market rate" is an annoying exercise and I tend to just leave the rate unchanged for multiple years (3-5) then bring it up in one go. The last time I did this the rent increased ~12%.

Before, the tenant was happy because they got below market rent for 4 years, and I was happy because I could defer pricing work without long term penalty or risking a move-out during an already busy year. This new law will likely result in my tenant paying more, and me working more at times I don't want to work.

It's not the end of the world, it's just one more annoying piece of red tape that doesn't seem to help anyone.

<comment><USER9> Was the tenant happy when you increased it? Increasing rent 12% in one go effectively kicks out most tenants. A smaller annual increase will give them time to adjust to market conditions and choose over a longer period whether or not to move and to save up to do so.

You are doing no one any favors except short-term renters who never get an increase. In other words, your so-called benefit is actually a detriment to long-term renters.

<comment><USER8> I have done this twice with the same tenant without complaint or moveout. My tenant was presumably getting basic inflation based increases at work, which offset most of the delta.

Unclear on why doing it all at once is worse than doing it regularly and extracting more rent in the period in between. Is the theory that they will be unable to adjust their budget in 60 days?

<comment><USER10> It's beyond me why people would think this is worse for the tenant. Can I move to CA and be your tenant? You're basically giving your tenants free money.

Let's say the rent is $1000/month (for simplicity). That's $12000/yr in the first year. If you increase the rent by 12% ever 4 years they'll have 3 years of paying $1000/month, followed by a 4th year of $1120/month and so on.

If you instead raised it yearly by 2.87%, which give-or-take is the same as a 12% one-off increase we can calculate the net rent paid over the period in the two scenarios:

        $1000*12*3 = 36000

        r=1000;x=1.0287;
        (r*x^1*12)+(r*x^2*12)+(r*x^3*12) =~ $38106

The result is that by deferring rental increases you've given your tenant a benefit of $2106, and we can safely assume the rent is a lot higher than $1000/month. I.e. every month of the rent not keeping with market increases is more money for the piggy bank.

<comment><USER11> Not only that, the money saved in the short term (those 4 years without a rent increase) can be allocated however the tenant chooses. It can be frivolous spending, or the tenant can choose to turn it into long-term investments for compounding effect. I love being a tenant in these scenarios.

I think people that are arguing bigger rent increases that happen less often are bad are assuming tenants are stretching their housing budget to the max and won't be able to afford the large hikes. In which case they wouldn't have been able to afford it with smaller increases either.

<comment><USER12> Getting a surprise bill for 48 months of interest free credit is still a surprise bill. The landlord in question admits both to deferring out of disinterest in tracking market value (which as a trend is simply not hard work to determine) and to increasing the rent enough to recoup the rent lost by deferring the increase. During this time a tenant has no idea there is a claim on some undisclosed portion of their budget and has every incentive to set their operating budget accordingly.

It is well known that most people can not afford significant sudden expenses. I think the inability of some folks here to recognize how bad a 4 year rent hike can be have the privilege of not being in that group.

<comment><USER7> Renters generally understand that rent can be changed when the lease runs out and should be braced for the possibility that there will be a moderate increase. If the renter doesn't understand that, they probably haven't rented much before, and they'll learn it the first time their rent increases. If you are lucky enough to go multiple years without any adjustment, you should expect that the landlord will want to correct the differential at some point and budget accordingly.

Note this works both ways. If the market goes down, if no one wants to live there anymore, tenants have a lot of room to negotiate. Vacancies are expensive and the hassle of getting a new tenant is not something many people want to handle even in good conditions.

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER13> I'm shocked at the ideological fervor here and the fact that virtually no one seems to have looked at the details of the actual bill. This is nothing like the rent control ordinance in SF that has caused $3000 units to get stuck at $500 rents. That will _never_ happen under this law. The allowable increases are so much higher than "normal" rent control laws that any given unit will catch up to market rates in a matter of years, at most. Whereas the laws we love to hate result in units getting stuck far below market for decades or even generations.

The difference with this law is that a 20% rent hike will take 3-4 years to be implemented instead of 30 or 60 days. That difference, while not enough to allow all families to remain in place, will allow families time to adjust or move within a reasonable time frame.

This law is different. If you want to complain about rent control in SF or NYC or elsewhere, have at it, but know that most of your complaints do not apply to this law.

<comment><USER14> The lack of affordable housing always has been and always will be a supply problem. When demand for homes outpaces the number of homes being built, prices go up. Plain and simple.

Homes that are built for renting (mainly apartments and condos, but some houses, too) are built for profit. If you make it less profitable to build, fewer will be built. If fewer homes are built, the problem is compounded, not rectified.

If you want to make housing more affordable, make it as cheap and profitable as possible to build new homes. Get rid of the fees that can push over $100,000 for a single family home in some counties, before the builder even buys a nail or 2x4. In most states you can build a home for less than the price of permission to build a home in some California counties.

<comment><USER15> > Homes that are built for renting (mainly apartments and condos, but some > houses, too) are built for profit. If you make it less profitable to build, > fewer will be built. If fewer homes are built, the problem is compounded, > not rectified.

Arguments like this continue to be made for more and more aspects of our market: pharmaceuticals, heathcare services, elder care services, and now housing. Everywhere you look the markets seem ill equipped to handle the needs of people.

Maybe the problem is markets then? Maybe the problem is expecting our entire society to work based on profit motive? I don't deny it's served us fairly well for awhile, but it seems like we're hitting the wall a lot lately.

<comment><USER16> Markets are hardly perfect, but in this specific case it should be the most efficient solution to the problem - if you could fix the zoning and other laws that distort it so badly that it's dysfunctional. And your still going to want to add incentives for things you value but the market does not - perhaps like lower income housing. In some of the other cases you mentioned markets are not necessarily the best solution. Canada benefits greatly from having a single buyer for pharmaceuticals - that concentrates the negotiating power and we get better prices because of it.

<comment><USER15> What are the zoning laws you see as the problem? Serious question, I'm not in that area and don't know much about SF's zoning issues.

<comment><USER17> There are severe restrictions on density and heavy parking requirements just to start. It's much much more complex than that, but to simplify - people who lived in a given area want it to remain the same.

SF Bay Area is creating 3+ jobs per new unit built (any unit). So the gap is growing rather rapidly, resulting in demand far outpacing supply.

Most of the peninsula cities/towns do not want any growth and want to remain single family home neighborhoods. However, based on demand, they should probably evolve more into either denser row houses or apartment/townhome type.

The way to restrict this from happening is to require more land per sq.ft. of housing and require more parking per bedroom and guest parking for Multifamily housing. All this makes land use less efficient and therefore more expensive, deterring development.

</comment></comment></comment></comment></comment></comment><comment><USER18> There is no functioning market to begin with. Housing prices and rent are through the roof in California, yet supply is not rising to meet demand, largely because existing owners oppose new construction.

Turnabout is fair play. If owners organize politically to control supply, tenants can organize politically to control prices.

<comment><USER19> Let's just not even talk about the fact that regulation is the reason why housing is scarce, let's just assume California is 100% at capacity. How the hell does rent control increase turnabout? It just let's people who got in at the right time have their status as a resident enforced indefinitely, when there are plenty of people who are willing and able to pay far more in order to live there.

<comment><USER18> It hurts the owners who would be receiving the wealthy newcomers' money.

It doesn't solve anything directly, but it's an attack on the prosperity of the people who are maintaining artificial restrictions on new construction.

A laissez-faire approach to both construction and rent would probably be a better option. But that's already not happening, and it's not going to happen without pressuring homeowners and landlords to stop opposing construction.

<comment><USER20> Construction isn't easy anymore. we've taxed and regulated it into a luxury.

<comment><USER21> Maybe, but construction may not even be necessary. Shipping containers can now be easily retrofitted into stylish apartments. They can easily be stacked eight stories tall.

95% of the work can be done in overseas factories and is subject to the same globally competitive downward price pressure as every other manufactured good. Build them in Shenzen at a wholesale cost of $30,000 per pod, ship them to San Franciso for $2000, stack and install them at a cost of $8000. At 320 square feet, that's $120 per square foot. The same cost as new homes in rural Texas.

All the California legislature needs to do is pass a law zoning everywhere in the state for multi-story shipping container apartments. Then watch prices plummet. Even for single family regular construction homes, because the shipping container apartments will suck so much demand out of the market.

<comment><USER22> Who the fuck wants to live in a shipping container?

<comment><USER21> A shipping container is 320 square feet. Two pods can be joined into a single 740 square foot unit. That's a total cost of $80,000. Let's round to $100,000. Assume a rental yield of 12%.

$1000 a month for a brand new 740 square foot apartment in the middle of San Francisco. Plus with modern finishes that are frankly much nicer than anything you'll find in the low-end SF rental market. I'd imagine quite a lot of people would sign up.

<comment><USER23> Why do you think construction price, and not land price, is the limiting factor?

I'm in a high-demand city in Canada. The house I'm in right now is worth about $70k. The land it sits on is worth $900k. Shipping containers aren't going to help with that.

<comment><USER21> It will if you stack them eight stories high.

Don't know where you live, but I doubt it's more expensive land than San Francisco, where the average acre of land costs $3.2 million[1]. Taking that acre of land, save half the area for green-space and courtyard. Use half the footprint for shipping containers. Stack the containers 8 high.

You now have 242 double-pod units. The amortized land cost per unit is $13,000. Assuming a generous rental yield of 12%, the land cost only adds $130 a month to the rent. That's hardly anything for a 720 square foot apartment.

The lesson is that even San Francisco land costs are no match for the power of high-rise high-density housing.

[1] [https://www.6sqft.com/study-shows-huge-disparity-in-u-s- urba...](https://www.6sqft.com/study-shows-huge-disparity-in-u-s-urban-land- value-with-nyc-making-up-10/)

<comment><USER23> Same ballpark ($2-3 million/acre) - and yeah, you're not wrong that if you can get approval for 250 units in an acre you can have reasonably priced housing. But the hard part in that equation is convincing whoever controls zoning to allow for it - once you do that, whether it's shipping containers or traditional construction you can have affordable housing.

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER24> One thing I have noticed as I have become more aware is that many of our laws are aimed at trying to freeze a moment of time, often by piling on contradictory policies on top of each other.

Subsidize home loans Ban new construction Ban rent increases

It is no wonder why housing prices/rents continue to rise in these markets.

In software engineering sometimes conclude that a rewrite is necessary. How can we completely rewrite our regulations?

<comment><USER25> Stop making housing an investment?

<comment><USER26> I've seen this argument before. Why shouldn't it be an investment?

1\. Land is a limited resource. 2\. Property improvements last for a very long time, and are incrementally improved. 3\. The buy-in price is relatively high, so only very interested parties get involved. 4\. It's a home for goodness sake, why would you not call it an investment?

<comment><USER27> Housing cannot be both affordable _and_ and a good investment. The definition of a good investment is a piece of property that has a price that increases over time. The nature of exponential growth means that eventually housing will become unaffordable if it is perpetually a good investment.

Society's expectation that housing is a good investment results in people taking on significant debt to buy increasingly expensive homes. The consequence is that homeowners have a huge incentive to suppress the construction of additional housing, to inflate the values of their homes. And when housing prices do fall, people's financial lives are ruined. Contrast metros like SF, Portland, and Seattle with places like Tokyo where homes can be bought for < $400,000. A big part of this is that housing is expected to be a depreciating asset: [https://www.youtube.com/watch?v=iGbC5j4pG9w](https://www.youtube.com/watch?v=iGbC5j4pG9w)

<comment><USER28> You're conflating "an investment" with "an exponentially growing investment".

<comment><USER29> That's sort of the classic interpretation of investment. AFAIK, the first question most people ask about investments is "what is the expected rate of return (relative to the risk)?".

I would not describe my car as an investment, since it's basically guaranteed to depreciate. Housing could be expected to behave in a similar manner (although that would likely require a decrease in population growth).

<comment> kube-system The value of the structure does often decrease over time. The land might be a different story, if it's a neighborhood where people want to move. Location, location, location. You can get property that decreases in value too, just move into a neighborhood in decline.

</comment></comment></comment></comment></comment></comment></comment><comment><USER30> Rent control is about housing security for existing tenants. Even a perennial 7% increase can be better than discovering your rent will jump 300% next month.

But rent control in the absence of housing supply increases will undoubtedly exacerbate the problem, and at a steady 7% inflation would also slowly price out existing tenants.

Many parts of California already had rent control that was based on building age. Theoretically this could have been the best of both worlds--improved housing security for the majority of existing tenants, but an incentive for new construction, which would be excluded from rent control. Of course, the price of housing security would be marginally higher rent prices up front, but in the real world that's a reasonable tradeoff. _Security_ and _predictability_ are at the top of most people's hierarchy of needs, whether they admit that or not, and regardless of whether they'd willing pay for it. (Healthcare being a great of example of people predictably making irrational decisions, requiring government intervention to mitigate the consequences.)

Unfortunately, new construction in California is extremely costly for entirely unrelated reasons. I think most developers in California would have bargained statewide rent control for development as-of-right. That California permitted rent control again without doing anything substantive about lowering the costs of development is inexcusable. I'm sure lawmakers told themselves that they were buying the acquiescence of NIMBYs and local control advocates regarding future development as-of-right legislation, but they're just lying to themselves.

<comment><USER31> > I think most developers in California would have bargained statewide rent > control for development as-of-right.

In fact, that was more or less the deal—until Anthony Portantino torpedoed it.

</comment></comment><comment><USER20> I'm a renter in Oregon and I've been outspoken about this long before the laws were passed. From my experience, people who support heavy laws, regulations and taxes don't spend enough time considering potential side effects. They feel like with enough support, they can just force anything they want to happen, while completely disregarding the market.

I feel like an amount of the general public just wants Big Daddy government to come in and authoritatively force everyone into an unnatural framework, which is pure ignorance.

<comment><USER32> Well, i disagree with your opinion. Silicon Valley has been attracting a lot of people from lot of states, who all need housing. Remember , size of California is fixed. Housing in Silicon valley doesn't grow at the same rate as number of people coming here. Added to that, foreigners living in foreign countries ( who have never visited USA, who have no intention of living in USA) are able to own land/houses in silicon valley , and do that purely for monetary reasons, ie get more money out of the property , jacking up prices even more. An ordinary American who wants to live in California is suffering as a result of this. rent control or low income housing are essential tools to make ordinary Americans' lives better.

<comment><USER33> > Housing in Silicon valley doesn't grow at the same rate as number of people > coming here

Bingo. And why not?

<comment><USER34> Existing homeowners don't want their living space turned into downtown Manhattan because there's a temporary exorbitant demand for ad click optimization and pic sharing networks.

<comment><USER33> There's a whole spectrum between single family homes and "Manhattan". It's not a binary!

The Bay Area's population has grown by 8.5% in the last 10 years. [0] Please, that's not "Manhattan". That's one person on your block converting their garage into a rentable unit.

Those "existing homeowners" are really messing things up for everyone because they don't want Bob to turn his garage into a rental? Somehow I think there's more to it than that.

[0]: [https://www.kqed.org/news/11741275/map-the-bay-area-leads- ca...](https://www.kqed.org/news/11741275/map-the-bay-area-leads-california- in-population-growth)

<comment><USER35> Full quote: The population of the nine-county region grew by over 600,000 people since 2010 — a nearly 8.5% increase — outpacing the growth rate in any other part of California, according to U.S. Census Bureau data released Thursday.

600k people is about as much as Seattle proper. Which happens to span 83.94 sq mi. In less than 10 years. That's _a lot_ of construction.

<comment><USER33> Huh? 600,000 people in the Bay Area's 7,000 square miles -- I don't see how the Seattle comparison of "83.94" square miles is related.

No residential neighborhood in the Bay Area needs to turn into "Manhattan" to house 600,000 extra people. If every block added a house we'd have extra housing to spare. Zoning prevents a ton of development, and everyone pretends they're fighting "Manhattan".

At Manhattan densities, the Bay Area would house 468 million people. That's not what's happening, and no one is advocating for that.

We don't need to build Seattle in the Bay to house everyone. We just need cities to stop dragging permits out years and every planning committee to stop saying "no" to any small increases in density.

How much construction it is isn't super relevant -- if it's profitable, it will happen!

</comment></comment></comment></comment></comment></comment></comment><comment><USER36> In NYC, rent stabilization laws have long had the concept of "preferential rent."

Rent stabilized apartments have a limit to how much can be charged for them (called the "legal regulated rent"). That amount can only be adjusted (on a percentage basis city-wide) by a government board every year and by a handful of other exceptions (historically: improvements to the building/apartment, major repairs, new tenant in the unit---however some of these exceptions were recently eliminated). The legal regulated rent is sometimes hilariously more than what any sane person would pay for a particular apartment and landlords would never be able to get a tenant at that price (for reference, as an NYC renter, my preferential rent is ~26% less than the regulated rent).

So in comes the concept of "preferential rent": a price below what the landlord is legally entitled to charge. That preferential rent is in effect for the duration of the lease signed. With the recent rent stabilization reforms in New York state, renewal leases on rent stabilized units will only be able to charge the preferential rent plus that year's percentage increase (as decided by the government board). Previously, landlords were allowed to raise the rent all the way up to the legal regulated rent plus that year's percentage.

In other words, before the recent reforms, landlords had a strong incentive to keep the legal regulated rent as high as possible since they can always raise rents upon renewal to that value. Previously, preferential rents were truly temporary and the landlords had no obligation to maintain them upon renewal. Now the only way to raise the preferential rent to the regulated rent is if the current tenant vacates the apartment and the landlord finds a new tenant, on whom they may charge any value up to the regulated rent.

It's difficult for landlords to kick out rent stabilized renters since those renters are generally entitled to renewal leases, but one simple tactic before was to just raise the rent from the preferential value to the regulated value. With the recent reforms, this is no longer a viable tactic.

</comment><comment><USER37> Rent control is abused in SF. Every engineer I know, who has been living in SF for over 5 years is currently paying an absurd amount compared to their monthly income. I even sub-leased an apartment from a friend who took off a sabbatical, and he didn't want to lose his rent control.

I don't know who rent-control is supposed to benefit, but it seems broken. Eventually these places end up in the hands of people who know how to game the system. Just build more housing and the incentive will go away.

<comment><USER38> When I was interviewing for jobs in the Bay area I noticed entry level salaries (even at smaller shops) were in the range of 100-120k and rent was like 35-40% of your salary after taxes. Certainly higher than the recommended 30% but it's not that different from somewhere like LA or NYC, even Chicago and Miami aren't much cheaper.

Are my numbers just totally off?

<comment><USER39> $120,000 comes out to around $6k/mo. A mediocre studio in SF is pretty close to $3k.

<comment><USER38> After taxes it's a bit under $6,900 so 40% of that is ~$2,700. Browsing Zillow/Apartments.com/Padmapper shows several thousand listings for studios under $2k and single bedrooms around $2.2-2.7k, depending on area. SF proper seems pretty tiny and the most expensive, is everyone just trying to cram in there? Do people try not to commute?

<comment><USER40> You are right that most casual analyses overstate the real cost of living in SF. A Bart commute in the Daly City direction, or Oakland, or a drive in from Pacifica all get you much more reasonable cost / commute trade offs for jobs in the city. Certainly in absolute prices remain absurd.

<comment><USER41> I can confirm that as of December-January it was possible to find a decent 900-1000 sq ft house with two bedrooms in southern SF (Visitacion Valley or Crocker/Amazon, say) or Daly City, near BART, for $3000 a month. Still more expensive than than the comparable in New York, where a two-bedroom apartment in Jersey City with a comparable commute to lower Manhattan was $2300.

</comment></comment></comment></comment></comment></comment><comment><USER42> This rent control is a result of populism - plain and simple.

Rent control works for those already renting - and that is about it!

Everyone else suffers: those moving to the area, the landlords and those wanting to build more.

<comment><USER25> Rent control is a thing world wide. It's not populism.

It's the same concept as free healthcare or free education. It's here to ensure people can still find affordable places to live.

You can't make everything an investment if you want a healthy society.

<comment><USER43> It will not help you find an affordable place to live, it will help those who already have existing leases hold on to them forever. Rent control does not create an abundance of housing, it just creates a constituency of people that gets a better deal than those who don't.

<comment><USER44> Correct, rent control in the Boston area created haves and have-nots. It was great for those lucky enough to get in, but the rest of us were effectively subsidizing them.

</comment></comment></comment></comment><comment><USER45> It seems more and more clear that California, or at least those in power in California, don't _want_ to fix the housing problem. Because if you're a land owner, the only problem is people trying to spoil the good times. All this VC money pouring into the pockets of tech employees, and a larger and larger fraction going straight into landlords' pockets. What's not to love?

If actually you want lower home prices, build more homes. Build tall (curb height restriction rules); build everywhere (no more minimum parking rules); build immediately (reduce complex planning permissions for developers). Just build more.

Supply and demand will decide the price of most goods, and housing is no exception. Rent control does not address the underlying issues that cause prices to rise- lack of supply and growing demand.

<comment> seph-reed Are there really not enough houses? I've always been under the impression that there exists more than enough housing, but a lot of it is empty.

<comment><USER45> Not enough to fix the housing problems CA has. Not nearly. And if that's the problem, tax empty homes.

But even then, even if there are empty homes, building more will still fix the problem. Let those foolish owners leave the homes empty- we can build more anyways.

<comment> seph-reed I really dislike the notion of clearing more land and putting up more cookie cutter houses and apartments for the sake of saturating the housing market in order to get people to rent for reasonable prices.

<comment><USER46> I really dislike the fact that I'd have to save for decades just to afford a decent house in California.

The land isn't doing anything just sitting there. I am totally fine with clearing it out so people can actually afford houses.

<comment> seph-reed Coming from CA and living elsewhere now, it honestly hurts me how much people take that land for granted. It's so damn gorgeous and rare.

<comment><USER46> It is definitely stunning, and it can make a painful commute bearable, but I would put the needs of my fellow humans over aesthetic.

That said, there is still a ton of "boring" land we can build on first before cannibalizing the scenic drives.

<comment> seph-reed > my fellow humans

This may be the pivotal pinch point which marks the root of our disagreement. I honestly feel more fellowship with animals and computers than humans.

Also, when it comes to the "needs" of humanity, I think we've surpassed that mark. It's beginning to appear that people are insatiable consumers that will destroy anything for a bit of convenience, all while being unhappy the entire time.

I'm not on team human.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER47> When you mess with supply and demand there are always unintended consequences. I'm currently a beneficiary of rent control and am lucky to be paying below- market rate for my apartment. It would be nice to move to another neighborhood, but it would be dumb for me to give up the savings. My neighbor pays 1/10th of what I pay for the same size apartment. Neither of us are leaving anytime soon. This is why there's no liquidity in the SF housing market. They're trapped and live in constant fear of being evicted.

On a philosophical level, why should my landlord be subsidizing our housing costs? If we want to make housing more affordable for low-income families, surely there's a more equitable way to finance it.

<comment><USER48> Why should we subsidize your landlord, paying on a Prop 13 valuation 1/10th the market rate?

None of them are suffering.

<comment><USER49> I don't like rent control but I hate prop 13. Interesting is that Howard Jarvis rallied renter support claiming that landlords would be nice and pass the tax savings on to tenants. Of course this didn't happen and there were immediately movements for rent control around the state.

</comment></comment></comment><comment><USER50> The real solution here is to build more housing, as high prices are a market signal of a shortage. While I support more unit creation more than I support rent control, in the current crises we need both. What I still can't get over is how much of CA land use politics is pure generational warfare, the olds vs the millennials, and it seems that the millennials are finally starting to win some fights.

<comment><USER51> Rent control deters the building of more housing. It's literally part of the problem.

<comment><USER52> Can you explain what you mean? I don't follow. Rent control is a bandaid that provides a level of stability to the lower classes. They can live without daily anxiety of being rudely defacto 'evicted' by radical, surprise rent increases.

This enables a society to continue to grow and function at a somewhat more sustainable pace, letting cities and counties grow without intense boom-bust and crash cycles, with a more stable working class, and therefore a long-term sustainable housing construction market.

I understand that rent control is no grand solution, and that we need more houses built - but I do not understand how rent control is part of the problem.

The problem starts and ends with personal and corporate greed. The rent control is an attempt at constructing a sustainable, stable society from the ashes of an out-of-control capitalism that is leaving most of its consumers in the dust.

Rent control is not part of the problem and would _not_ deter rational actors from building additional housing - I believe it would increase it.

<comment><USER53> Rent control does indeed make the housing shortage worse in the following ways:

\- It makes it so new renters subsidize the old ones, raising prices for newly vacant places, defeating the purpose of controlling costs. It also doesn't offer tons of protection from boom/bust cycles, as mainly those riding the boom will be able to afford absurd prices in highly regulated places like SF — Where a 1br can fetch 3.7k/mo (!!)

\- "FU, got mine" attitude disengages renters from organizing the same way NIMBY homeowners do. For example, SF renters could easily outnumber homeowners to allow much more housing to be built, but ~70% of housing stock there falls under rent control.

I do want to be clear that I fully support controlling costs in some manner, however, this desperately _needs_ to be tied to a solution that results in more housing.

<comment><USER13> Luckily for all of us, this law will not create a new class of rent control prisoners/devotees because the allowable increases are too high.

</comment></comment></comment></comment></comment><comment><USER54> This is a misleading headline.

The problem with rent control is that it allows many well-off individuals to collect ever-growing rent subsidies, to the point where after 10 or 15 years their rent is a joke compared to what their (often less-fortunate) neighbors are paying.

This bill does not have that flaw. Crucially, it sets the maximum allowable rent increase to be well _above,_ not below, the historic long-term rent curve. Over time, in the long run, rents will approach market-rate. And that makes all the difference.

<comment><USER55> What you're ignoring is voters resoundingly rejected Prop 10, the rent control measure that went on the ballot LESS THAN ONE YEAR AGO. Which was pretty close to AB1482.

Yet, despite the majority of voters saying no, the legislature felt it necessary to push forward with legislation anyways.

Above all else, the government ignoring a direct vote from the people is most disgusting of all and reason enough for why this should be vetoed.

[https://www.sfchronicle.com/politics/article/Prop-10-Califor...](https://www.sfchronicle.com/politics/article/Prop-10-Califor..).

<comment><USER54> AB-1482 is nothing like Prop 10.

</comment></comment></comment><comment><USER56> This is a disaster. Have we learned nothing at all? Rent control won't help anyone except those who already have a low rent place and it'll only help for the short term until they need to move. After 50 years of ridiculous regulations that prevent more housing from being added, we're still moving in the wrong direction. This is truely a sad day.

<comment><USER57> It's not ideal and no silver bullet, but having rents go up means "normal" people living in places for years get pushed out of the city and land lords get richer, faster. It seems to address that issue, which is not all bad on the surface.

It's not the perfect solution, but what do you propose as something better that still helps normal people not get pushed out?

<comment><USER58> I don't have a perfect solution, either, but I see unintended consequence from this:

* Fewer rentals on the market

* More instances of landlords "re-occupying" a place (eg, ACTUALLY kicking out the residents) in order to fix it up (or not) and then re-rent to someone else at a much higher base rent, later.

When rents go up, tenants push themselves out (or, the market pushes them out). When we devise tenant protection laws, we invent 'better' landlords who find clever ways to PUSH out people who are paying below market.

If there was a way to artificially hold ALL rents down, it might be less obvious -- but under a rent control scheme, everyone knows when you're paying below market; you look at the classified ads (okay, craigslist) and see that you could never afford to find a 'new' place like yours at the same price. The tenants know it, the landlords know it. The tenants have protection. For awhile. Until they don't.

<comment><USER59> My uncle was given an eviction notice last month so the owner can fix the place up. Expect many more people to get similar notices before the new eviction protections kick in at the end of the year.

</comment></comment></comment></comment><comment><USER60> Finally, a novel and innovate solution no one has thought of before.

What could go wrong?

[https://www.nytimes.com/2000/06/07/opinion/reckonings-a- rent...](https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent- affair.html)

<comment><USER50> To be clear, this is a 20 year old article, the literature on rent control has changed a lot since this was written. Basic economic consensus rn seems to be that rent control is a poor long term solution to rising housing costs but a necessary short term solution as the required supply shock wouldn't even be able to happen in the near term even if regulatory barriers are eased due to labor, construction, and land costs in expensive metros and that the anticipated negative impacts of rent control (less liquidity in rental market, higher prices) dwarfed by the impact of lack of supply.

<comment><USER61> It's a 20 year old story about rent control in San Francisco. So, we are talking about a long term problem?

" A few months ago, when a San Francisco official proposed a study of the city's housing crisis, there was a firestorm of opposition from tenant- advocacy groups. "

<comment><USER50> yes, and there was a huge well funded study a few stanford professors conducted of rent control in SF in 2018 that is a much more accurate study of the affects of rent control policies.

"Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighborhood."

To be clear, the rent control studied was a yearly rental increase of ~2/3 CPI, or 1-2% annually, while market rents increased at about 7% annually since the 50s in SF. The proposed policy is a rent cap of around 8%, which is higher than the aggregate rent increase in the SFBA over the past 30 years or so (also 7%). This isn't a rent control law as much as it is an anti gouging law, disallowing landlords from increasing rent 10-20% YoY, which happens to maybe 1-3% of the market.

[https://www.brookings.edu/research/what-does-economic- eviden...](https://www.brookings.edu/research/what-does-economic-evidence- tell-us-about-the-effects-of-rent-control/)

<comment><USER62> It sounds like this is a poor solution for a non-problem then.

<comment><USER50> its a great solution for people who's landlords are price evicting them by raising their rents by 25%. This law will allow people 2-3 years to find an alternate living arrangement compared to the 30-60 days they have today.

</comment></comment></comment></comment></comment></comment><comment><USER63> There's three paths:

1) Rent cap landlords. The landlords will cry Big Government.

2) Abolish single family-only zoning and legalize backyard cottages, townhomes and small apartments. The homeowners will cry Big Government.

3) Do nothing. Watch as more people start living in tents or endure super- commutes that snarl your traffic and worsen climate change.

<comment><USER20> I'm not a landlord or homeowner, and 1 makes me cry Big Government.

What if something crazy happens to the economy, say the dollar gets devalued, and all you have is rental property for income? Realistically you would raise your rental price.... But wait, there's a cap, and you can't.

2) "legalizing backyard cottages" is actually against Big Government, and I'm with you there.

You're forgetting another option: deregulate and let the market compete.

<comment><USER30> > What if something crazy happens to the economy, say the dollar gets > devalued, and all you have is rental property for income?

In San Francisco rent control is indexed to inflation. If the dollar is devalued, inflation increases, and you get to increase your rent more. The same is true for Oregon's new law, which permits 7% increases _in_ _addition_ _to_ _inflation_.

> You're forgetting another option: deregulate and let the market compete.

Rent control is about providing housing security and controlling volatility. Over the long-term unfettered markets may produce optimal supply, but in the short-term people can easily be pushed onto the street. As Keynes said, "economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again". (The more famous bit is, "in the long term we're all dead.")

<comment><USER64> SF is capped at 60% of CPI. Inflation is 10%, you can get 6%. Doesn't take long for that to add up.

<comment><USER65> In which universe is inflation 10%?

[https://www.bls.gov/regions/west/news- release/consumerpricei...](https://www.bls.gov/regions/west/news- release/consumerpriceindex_sanfrancisco.htm)

<comment><USER64> Let me restate that, if inflation was 10%, you'd only be able to increase by 6%, so you'd be losing 4% per year, which adds up quickly.

</comment></comment></comment></comment></comment></comment><comment><USER66> > The bill limits annual rent increases to 5 percent after inflation and > offers new barriers to eviction

The limits to rent increases seem like they are enough to avoid significant short term spikes, while keeping up with market rate rents.

The biggest problem with some existing rent control (like in SF) is that the limit is so low that rents can't keep up with market rates even over decades, which is clearly terrible economic policy. Maybe this limit is high enough that this won't be as much of a problem for the rest of California.

</comment><comment><USER67> Ah, because it worked so well in SF to ease housing prices! So why don't we expand the program?

Will never cease to amaze me just now inept politicians are.

<comment><USER68> This reminds me of the approach dictators have to issues. Issue an edict or decree making the problem itself illegal. Problem solved!

<comment><USER69> Sparrows are eating a great deal of the produce grown in California, let's remove them to end food insecurity.

<comment><USER68> Exactly! The "Four Pests Campaign" (除四害) aka the Great Sparrow Campaign (打麻雀运) agree.

[1][https://en.m.wikipedia.org/wiki/Four_Pests_Campaign](https://en.m.wikipedia.org/wiki/Four_Pests_Campaign)

</comment></comment></comment></comment><comment><USER70> AirBnb really changes the dynamics of rent control. If you rent to someone in a hot market, you are entering a long term agreement with less flexibility in raising the rent in accordance with market rates. In the past, when faced with rent control, the landlord had to either accept it, or let the property sit vacant.

Now, with AirBnb, landlords have a much more viable option. They can put the property on AirBnb and have the flexibility to charge what the market will bear.

I foresee that as a consequence of this law, there are going to be fewer rentals and more AirBnb properties in California.

<comment><USER71> Agreed if there were no other side effects.

However, since both NIMBY owners occupying their home and renters hate AirBnB, it's quick to imagine anti-airbnb legislation (like what SF already has) quickly passed if the tide turned.

</comment></comment><comment><USER72> Oh joy, politicians trying to get votes from the economically unaware. If you thought there was a housing crisis, just wait. It's going to be crazy.

Here is a different article, more tolerant of private browsing: [https://www.forbes.com/sites/adammillsap/2019/09/04/more- ren...](https://www.forbes.com/sites/adammillsap/2019/09/04/more-rent-control- in-california-will-make-housing-problem-worse/)

<comment><USER50> Limiting rent increases to max 8% (what this bill encodes) is only going to affect maybe 1-3% of lease agreements annually. This isn't about vast controls of housing stock, it about limiting 20% rent spikes people experience.

<comment><USER51> At the cost of further disincentives to actually building more housing. What a great idea.

Every field of economics agrees that rent control causes harm to the people it's supposed to help.

<comment> 52-6F-62 In a vacuum, yes. Just as much as on paper 0.1+0.2=0.3 but in most floating point implementations it doesn't.

In application Toronto has seen the opposite effect to what you describe. We hear this argument over and over as we just had our rent control stripped, but it's counter to the experience.

Here's one write-up:

[https://urbantoronto.ca/news/2018/11/people-why-universal- re...](https://urbantoronto.ca/news/2018/11/people-why-universal-rent-control- worth-fighting)

<comment><USER51> Your article says this:

> So far, empirical evidence shows that rent control has not crippled the > purpose-built rental market.

But the economic concensus is exactly the opposite.

[https://www.economist.com/the-economist- explains/2015/08/30/...](https://www.economist.com/the-economist- explains/2015/08/30/do-rent-controls-work)

[https://www.nytimes.com/2018/10/12/business/economy/rent- con...](https://www.nytimes.com/2018/10/12/business/economy/rent-control- explained.html)

[https://www.businessinsider.com/does-rent-control-work-no- it...](https://www.businessinsider.com/does-rent-control-work-no-it-actually- increases-rent-prices-for-most-people-2015-9)

[https://www.bloomberg.com/opinion/articles/2018-01-18/yup- re...](https://www.bloomberg.com/opinion/articles/2018-01-18/yup-rent-control- does-more-harm-than-good)

[https://www.nytimes.com/1989/05/30/opinion/how-rent- control-...](https://www.nytimes.com/1989/05/30/opinion/how-rent-control- hurts-the-poor.html)

<comment> 52-6F-62 The article continues beyond that line.

They outline, with numbers, the practical effects of rent control in the sample size of metro Toronto.

I'm not an economist but I didn't think consensus was a valid benchmark against empirical data.

<comment><USER51> Consensus are built from empirical data of more than just one metro area.

<comment> 52-6F-62 A consensus of opinion is irrelevant. And among those articles is hardly a consensus. One wants regulations limited to an extent, another wants vouchers instead of rent controls.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER73> Prop 13 but for renters now too!

I wonder if this was pushed by landlords. It's easier to push a 5% hike in rent every year than random 10-20% hikes. Especially in a nearly tapped out market. The prices are already astronomical and the home prices are fluctuating/faltering. In 10 years, the rent will be 63% higher. And that's after inflation. Your $3,000 1-bedroom will be nearly $4900 after 10 years. Unbelievable. Will FAANG prop up landlords by adding 5-10% TC increases every year? Startups certainly won't. They stopped increasing comp a few years ago.

</comment><comment><USER74> The real solution is to decommodify housing.

>The landlords, like all other men, love to reap where they never sowed, and demand a rent even for the natural produce of the earth.

-Adam Smith

<comment><USER75> >decommodify housing

genuinely curious what would that entail, in practical steps

<comment><USER76> My guess is to implement a higher tax on properties where the owner does not live on the property, or put a limit on how many rental units a landlord can own. Something like that could dis-incentivize large tracts of rental properties.

<comment><USER43> How does that create an abundance of housing?

</comment></comment></comment></comment><comment><USER68> I wonder if they put in measures to make permitting easier for builders so we can actually get more housing built?

I guess we'll find out in some years whether rent control entices builders to build more or if it will depress the market for building (as it usually does) such that at some point we see people (families) bunking together ala Soviet housing solutions to demand.

<comment><USER77> I know people doing that in Berkeley already.

<comment><USER78> Berkeley and Oakland are two places that have outrageous transfer taxes when you buy/sell your house. Its 15x what it is in most other cities in California. Basically more impediment to owning a home.

<comment><USER77> 1.5% is definitely high, but I have a difficult time believing that it's a larger impediment to owning than the generally high price of property due to lack of supply.

<comment><USER78> Its a lot to come up with with when you are struggling for a downpayment on your first house.

<comment><USER68> It is a lot in some ways (it's a remodel, or repair, etc.) but you're not going to buy your fist home in Berkeley if you're working with a tight budget. People are paying cash in some instances.

</comment></comment></comment></comment></comment></comment><comment><USER79> I'm sorry, I think it's pretty odd when you can't set the price for your property being leased.

If you like better rates, negotiate, fix zoning, or buy. If you can't do any of those, you should leave. The rest of the country is really not that bad.

<comment><USER44> California already has a net outflow of people, especially middle class. This is offset by immigration and undocumented migration from Mexico so that the state's population actually continues to grow. But most of the newcomers are not affluent, will almost certainly rent rather than own, and tend to live together in large family groups like 10 people in one apartment. This is going to keep putting pressure on the housing market -- people need a place to live, they can't afford to buy, so the powers that be, in their wisdom, decided to just legislate limits to the price, hoping no one would notice all the unintended consequences that will definitely happen.

</comment></comment><comment><USER80> You hear that? That's the sound of my home rising in value as supply to compete against it is reduced. Very cool CA!

<comment><USER25> Hear this? These are the tenants that would have had to move out because they made the mistake of not moving in a rent-controlled place.

</comment></comment><comment><USER81> It doesn't help the housing crisis when the core problem is severe lack of inventory. It will help politically though since this helps seniors, the most reliable voting bloc. Pricing controls will just make it worse for everyone else, especially younger generations and families.

</comment><comment><USER17> Meanwhile in the booming Seattle: [https://www.seattletimes.com/business/real- estate/amid-build...](https://www.seattletimes.com/business/real-estate/amid- building-boom-1-in-10-seattle-apartments-are-empty-and-rents-are-dropping/)

> "I've been renting in Seattle since 2014, and this is the first time where I > felt like I have negotiating power," said Kjerstin Wood, who went apartment > hunting with her partner last weekend and got bombarded with offers like > free parking that she plans to use to play landlords off one another. "For > the most part, everyone we've met with has been very eager to get us to > apply right then and there."

> The trend is likely to continue: The apartment-construction surge that began > earlier this decade is continuing at the same brisk pace, outpacing demand > for rentals even as the city's population booms.

And a 2017(!) article talking about vacancy rate in Downtown LA that has seen a huge building boom (no not nearly enough to really depress prices, but enough to stave off the meteoric rise): [https://www.scpr.org/news/2017/09/15/75615/in-high- vacancy-d...](https://www.scpr.org/news/2017/09/15/75615/in-high-vacancy-dtla- landlords-offer-move-in-speci/)

</comment><comment><USER82> The Bay Area desperately needs ~6-story units in every urban area and near every public transit stop.

<comment><USER83> Along with 6 story units, we need better commute. The challenge is that the developers and cities lie and say hey we can add housing but we do not need to improve roads, and even if we improve roads, we will improve it just a tiny bit.

Please travel from Sunnyvale Saratoga starting at 101 at the north end to 85/DeAnza at the south end at 5-6 PM every day and see how long it takes to travel 6 miles. Unless you live here and know it already, you will be surprised.

But when it comes to selling housing, the developers, one example being of the vallco mall owner, somehow gets their way without any indication that their project will benefit the city, and thus rightly gets overturned at the ballot. [ And this is from someone (me) who failed to buy a house in Cupertino and now lives elsewhere.]

Anyways the way to build 6 story buildings can not be by making the living worse for everyone who already lives there. Much worse.

</comment></comment><comment><USER84> Just curious how the success of such a measure might be evaluated? Or is this pure theatre?

<comment><USER85> "... there could be a big effect in rapidly gentrifying neighborhoods like Boyle Heights in Los Angeles, where typical rents on apartments not covered by the city's rent regulations have jumped more than 40 percent since 2016."

A deceleration in rental inflation in neighborhoods such as the above? A reduction in newly homeless populations?

<comment><USER86> So are you willing to accept that if none of these things happen, and the homeless problems increase, that this measure failed and should be repealed?

It's one thing to describe a proposal's _political motivations_ , but quite another to actually declare that you might be wrong in your approach and are willing to define object criteria for success.

</comment></comment></comment><comment><USER87> Regarding SF house prices in particular:

San Francisco prices go up => only tech bros can afford rent

San Francisco rent prices get capped => tech bros still need place to live and win rental application lotto

Artists can't afford rent, but want to live in city full of tech bros and glass condos?

It doesn't make a lot of sense to me why you'd want to stay in SF if you're genuinely an artist. Is it a romanticization of the city's past rather than the reality of the present - a stark line between rich and poor with tent cities all around? An elementary school system not friendly to families making community ties (random geographic assignment)?

SF doesn't have a thriving liberal arts school - the art academy is a profit pit meant to create student debt. Aren't places like Berkeley, Pacifica, and Santa Cruz much more attractive locations? Even farther south like San Luis Obispo?

Lastly I am just going to ask this more fundamental question: should anyone be allowed to live anywhere they want, and is that the right people are striving for? Or is it simply they should be able to stay in the place they are once they're able to `get int`?

</comment><comment><USER88> Vote pro housing centrist fiscally right republicans , we need a more diverse ca congress

<comment><USER54> "As in previous polling, the law [to dramatically increase the housing supply] is more popular with Democrats than with Republicans, with 76 and 55 percent support respectively."

[https://sf.curbed.com/2019/5/17/18629809/sb-50-housing- trans...](https://sf.curbed.com/2019/5/17/18629809/sb-50-housing-transit-poll- crisis-ca-yimby)

<comment><USER89> Yeah, thats why we're seeing oodles of houses now that the Democrats practically control all of california. Are you trying to argue that the current one party rule is a good thing?

<comment><USER54> I didn't say that. But the fewer Republicans there are in Sacramento, the better the chances of SB-50 (or something like it) getting passed.

<comment><USER89> Ummmm...you do realize the Dems hold supermajorities in both houses right? Do republicans have psychic powers they're using to control the Dems now?

<comment><USER54> A single state senator (one of the few Democrats who opposes SB-50) blocked the bill from being voted on.

The supermajority was irrelevant.

<comment><USER89> So you blame republicans and want even more Democratic control of the Legislature than they already have.

<comment><USER54> When did I blame Republicans?

<comment><USER89> You having problems reading your past posts? You just basically said evil Republicans are blocking common sense housing solutions and indicated the solution is an even greater proportion of Democrats but then said that a Democrat blocked it and their numbers don't matter.

<comment><USER54> Could you quote the part where I said Republicans were blocking things?

<comment><USER89> "The fewer Republicans" et al

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER90> > _For a quarter-century, California law has sharply curbed the ability of > localities to impose rent control. Now, the state itself has taken that > step._

Yep. Because communities shouldn't be able to decide for themselves. Make it a state law. I'm just glad that (for now) these central planners are limited to a state economy and are not in Washington.

Great news for property owners in CA. Studies show over and over rent control legislation further restricts supply[1], so the existing housing will become even _more_ valuable!

1\. [https://web.stanford.edu/~diamondr/DMQ.pdf](https://web.stanford.edu/~diamondr/DMQ.pdf)

</comment><comment><USER91> Before anyone gets too excited, the cap is apparently 5% plus inflation per year [1] which seems pretty mild? (For comparison, Oregon's rent control is at 7% plus inflation, and San Francisco varies but is below 3% [2].)

[1] [https://la.curbed.com/2019/9/10/20857225/california-rent- con...](https://la.curbed.com/2019/9/10/20857225/california-rent-control- bill-1482-approved) [2] [https://sfrb.org/topic-no-051-years-annual-allowable- increas...](https://sfrb.org/topic-no-051-years-annual-allowable-increase)

<comment><USER31> San Francisco is _60% of inflation_ , which is the cause of all the problems. It's not even in the same league.

</comment></comment><comment><USER92> One thing that tends to be excluded in most analysis of rent control is the preference of landlords to operate fewer, more expensive units. When you have more units, you have more to keep track of - more tenants, more staff, more maintenance. A high-end luxury unit and a dirty fleabag mostly differ in some move-in amenities and services; rich tenants might demand more, but they don't trash the place _faster_. So every unit tends to be luxury by default since that's where the upside is.

If your rent increase gets capped by rent control, your ability to stay at a limited scale of operation and just add to the price gets squeezed, and that motivates making more capital investments in property(and specifically in vertical upgrades, since horizontal expansion puts them in a land bidding war). It hits investment properties run by large companies the most, and challenges them to use land more effectively to stay competitive, in the same way that higher minimum wage challenges companies to use labor more effectively.

However, we still need an SB50 or successor bill to deal with the build restrictions. The landlords and developers can demand building big(and they do already in many cases) but they're held back by zoning laws put in place by NIMBY residents. The trick is that instituting rent control does something change the outlook of the NIMBYs too, since their property value has a relationship to the value of rentals. Rental rates and turnover slow down = property values slow down = their house becomes less of an investment.

So it's a good first step either way.

</comment><comment><USER93> > California lawmakers approved a statewide rent cap on Wednesday covering > millions of tenants, the biggest step yet in a surge of initiatives to > address an affordable-housing crunch nationwide.

As though California is at all symptomatic of the problem of providing affordable housing in the rest of the nation. They might as well say it's the biggest step taken in an affordable-housing crunch globally.

A whole article about California's housing problem without a single mention of Prop 13, though? That's some impressive willful ignorance.

<comment><USER49> > A whole article about California's housing problem without a single mention > of Prop 13, though?

It's insane how many of these there are. I even know someone who recently bought a townhouse who didn't even know what prop 13 was.

</comment></comment><comment><USER94> This is interesting as Berlin, Germany is also set to pass a five-year rent freeze to address tenant concerns and rising gentrification. I always attributed to the fact that Berlin for some years has had a pretty left- leaning state/city government and the fact that Europeans are more willing to try things like this. As an American living here, I never thought I'd see such a large scale action back in the States. Is it now 'global' zeitgeist at this point to make moves like this?

</comment><comment><AUTHOR> For those living in SF, this significantly expands the number of eligible apartments for rent control. Right now only multi-unit homes/apartment complexes built before June 1979 have rent control. Now everything (except single family homes/owner occupied duplexes) built within last 15 years on rolling basis is eligible.

Given how slowly SF builds housing, the fact that anything built 2004 and earlier is eligible basically means almost everything except new high rises.

</comment><comment><USER95> This is only going to make the housing problem worse. They need to remove all the onerous zoning laws and restrictions of building taller buildings. It's a supply problem.

</comment><comment><USER96> Rent control causes housing shortages.

It limits the price of housing to an arbitrary price which is below the demand price of housing.

It fails to communicate the housing shortage with higher prices, and therefore it does not incentivize the building of additional housing to relieve the shortage.

Nor does it incentivize the finding of lower-cost alternatives, because all prices are capped at the limit, and so there is no information communicated about their relative differences.

</comment><comment><USER97> We absolutely need more ways to buy a house without all the rigamarole that causes a buyer to sell at 20% more a year later. Banks and real estate agents already force most people into selling at much higher. What if there was a special kind of property that's good at in-and-out ownership, low friction moves like rentals. Get rid of the bank and agent fees. Build it into the lien.

Startup idea anyone. The demand would be high.

</comment><comment><USER98> And of course there are exemptions for mom & pop landlords in the law.

This is why I'd rather do business with big megacorps than with small businesses; mom & pops are straight-up allowed to hurt their customers and their employees in ways megacorps aren't legally allowed to. See also: exemptions mom & pops have from mandatory sick leave laws, anti-discrimination laws, mandatory health insurance, etc.

</comment><comment><USER99> Ok, now there should be very little reason or objection from tenants rights folks not to pass SB-50 next session to make it easier to build density near transit. [https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...](https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB50)

</comment><comment><USER100> > "The housing crisis is reaching every corner of America, where you're seeing > high home prices, high rents, evictions and homelessness that we're all > struggling to grapple with," said Assemblyman David Chiu, a San Francisco > Democrat who was the bill's author.

If your new law is such a good idea, why do you have to lie so blatantly to promote it?

</comment><comment><USER101> In Paris, FR, rent control was approved a few years ago. The problem is that there is no incentives for landlords to update their apartments and to maintain them clean and good looking.

Before, a pretty apartment was typically more expensive than a similar apartment (same size, same zone) which was ugly and Now, it's same price.

</comment><comment><USER102> Aren't the effects of rent control well-studied and well-understood phenomena at this point? Won't this cause the rental market to become effectively deadlocked? i.e. people staying put for very long amounts of time due to not wanting to lose their low rents, landlords refusing to maintain their properties due to lack of incentives, inefficient allocation of rental properties (one person living in a 2 bedroom merely because the rent is low), and so on?

This seems like a bad solution to a problem (housing shortage @ current market prices) with an obvious solution (allow more housing to be built).

It's almost like the politicians pushing for this policy don't value the input of experts and the application of research, but instead are only interested in solutions that sound good at the most superficial level. Golly!

</comment><comment><USER103> Can someone explain how rent control works? It seems like it only benefits long-lived tenants. In the Bay Area, every apartment I've signed with advertises a "1 month off" deal or some equivalent. That guarantees them the option of at least a 9% increase in rent the second year.

</comment><comment><USER104> I genuinely don't understand folks reaction to Rent Control bills like this or the one recently passed in New York.

Don't you think that policymakers KNOW that the best way out of a housing crisis is to build your way out? California has put out bills in recent years to try to remedy this (ie. the bill that would require housing near transit lines) that FAILED, breaking down all the local neighborhood associations and powerful interests is not something that can be done in a single legislative cycle.

Rent control is about making it easier for everyday folks to survive day to day, its not meant to be a permanent solution, and if in 20 years this bill is still needed it won't be for lack of effort, it will because the NIMBYs were able to win out.

</comment><comment><USER105> I live in Sweden, which is heavily rent controlled. Let me just say that this hasn't worked out. Rental apartment contracts in larger cities gets sold on the black market for larger sums.

Queues are over 10 years in many cities and there is no real way of getting a rental apartment in any larger city. This means people are pushed into buying a housing apartment which cost a lot of money and drives up prices a lot.

It's not viable or logical that an apartment in central Stockholm should cost as much as an apartment in a small village in northen Sweden.

Norway, Finland and Denmark all have more free market and it's much easier to find a rental in all those countries. I would advice against having rent control.

</comment><comment><USER106> Instead of controls like this, increase housing supply and let the market drive down rent and house prices. If they do that, maybe the renters won't have to rent anymore.

The landlord's would be much more afraid of this kind of market based solution.

</comment><comment><USER107> The only way to drive down rents AS A WHOLE is to increase the supply of housing.

Any legislation that makes renting less profitable will make BUILDING RENTAL PROPERTY less profitable.

This sort of thing, on the whole, makes rents increase by decreasing housing supply.

</comment><comment><USER108> What hope do we have for self governance when the poster child of bad economic regulations, universally derided for having the opposite effect for which it intends, can still be implemented? Are governments incapable of learning? Are we doomed never to make any political progress on policies that are counter- intuitive, even when there is overwhelming agreement and empirical evidence of its harm? This makes me cynical of climate change. Even if we do achieve a carbon-neutral lifestyle, who's to say the next generation of politicians won't make the same arguments being made today against stopping climate change?

</comment><comment><USER109> Has anyone done an analysis to see what fraction of the wealth generated by silicon valley ends up in the hands of people who happened to own land there? If normal houses cost millions of dollars, I could see it being a sizable fraction.

I think the pricing mechanism plays a useful role in encouraging people with valuable land to give it to others who will use it more productively. At the same time, I think there's a risk that people who just own land could capture an unreasonable fraction of the generated wealth.

Would it really be right for San Francisco homeowners to capture over 50% of the wealth from Silicon Valley's success?

</comment><comment><USER110> Well, more bad and broken policy coming out of the state that has a long history of borking its housing policy.

This does nothing to fix the problem. They need to build more housing. A lot more housing.

But, no, we can't do that. That makes too much sense or something.

For people looking for solutions, here is a link to a supposedly suppressed Housing Development Toolkit put out by the White House in 2016:

[https://www.whitehouse.gov/sites/whitehouse.gov/files/images...](https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Housing_Development_Toolkit%20f.2.pdf)

</comment><comment><USER111> I have owned income property in San Diego for over thirty years, so I have a direct interest in this.

After looking at the details, this law looks OK for the present but if we enter a period of hyper inflation then it is not so good. The 5% plus inflation might not be enough since the government jumps through hoops to underestimate the rate of inflation. If we have 75% inflation and the government admits to only 20% inflation (for a hypothetical argument), then landlords will be damaged financially. I believe that sometime the government will inflate its way out of debt.

<comment><USER112> The perfect way to do it would be to only match the rent increase by the property tax increase. If the landlord isn't getting any increase on property taxes then it's fair for the tenant to not get any rent increase.

</comment></comment><comment><USER113> It's 5% rent increase, not the 1-2% seen in SF and NYC. Properties don't typically increase in rent that much. This isn't likely to lead to the absurd $1000 studio apartments in Manhattan.

</comment><comment><USER114> _California hurt itself in confusion_

</comment><comment><USER115> Rent control benefits no one, nor the landlord and certainly not the tenant. However, it is a classic "virtue signaling" used by politicians to advance their career. This is no exception.

<comment><USER116> Rent control benefits current residents and communities from being disrupted by real estate pricing.

</comment></comment><comment><USER117> Now that I think of it, I wonder why the larger employers in the South Bay don't build dormitories. Given a strong tendency to hire people fresh out of school (or nearly so), I would think that a great big dormitory on the company campus might be just the thing. It removes housing as an issue for a new hire, ties them more closely to the company (quit, you have to find an apartment), and they can spend their evenings shooting Nerf darts and shopping at the GoogleGrocery and the GoogleCoffeeShop.

</comment><comment><USER118> I think Henry George's Land Value Tax is a great solution that can really help us avoid a situation similar to what occurred during Mao Tse Tsungs revolution.

</comment><comment><USER59> I've just read through this law, and I think there might be some problems with it.

My uncle has just been evicted so that the owner can fix the place up and raise the rent. Under this law, that would be illegal, but this protection only comes into effect starting January first.

I expect to see thousands of similar last-minute evictions as anyone contemplating this course of action tries to get their tenant out before the end of the year.

</comment><comment><USER119> People will cry foul this will drive costs up in the long term. But we are far removed from free market economics since cities have put restrictions in building new housing thus keeping real estate prices artficially high. Now the state puts rent cost restrictions that will drive the prices of real estate down. Rent control seems to be used as a means to an end rather than a goal on itself because politics.

</comment><comment><USER120> Rent controls are either toothless or only help standing tenants.

Indeed, they work against supply while increasing demand. This does not help people looking for a home.

</comment><comment><USER121> > Economists from both the left and the right have a well-established aversion > to rent control, arguing that such policies ignore the message of rising > prices, which is to build more housing.

Nonetheless while it doesn't fix the underlying economics, I can see how it could be good to have a damper on the volatility of real estate prices, so that prices swing over the course of many years rather than violently.

</comment><comment><USER122> The only solution to higher rent is to build more, a LOT more, housing.

The rest of this is just distortion on the economy that will lead to all sorts of bad outcomes

</comment><comment><USER123> Hello, 11 month leases!

"Notwithstanding any other law, an after a tenant has continuously and lawfully occupied a residential real property for 12 months, the owner of the residential real property, in which the tenant has occupied the residential real property for 12 months or more, with or without a written lease, property shall not terminate the lease tenancy without just cause"

</comment><comment><USER124> We're already at unsustainable YoY rent increase levels in many places IMO. I for one have no problems moving if my LL decides to increase my rent ANY percentage. I know that over the course of my next lease I will always be able to come out ahead by hundreds if not thousands of dollars for the same price I'm currently paying and for sometimes better place.

</comment><comment><USER125> Governments respond to complaints from the masses.

From what I've heard, rent in a lot of Californian cities is extremely expensive, so I assume people are complaining about the price of their rent... probably statewide to some extent.

Hence the new bill. It's just a reaction to a temporary problem.

Which will probably stay in place long past the problem is solved!

</comment><comment><USER126> So yet another thing -- along with Prop. 13 and the cost of housing, which is partly the result of Prop. 13 -- that helps people who are already here, at the expense of newcomers. I suppose you could argue that that's appropriate, but it seems short-sighted to me. I'd rather see us build a lot more housing.

</comment><comment><USER127> It's still allowed to grow much faster than taxes under prop 13, which is rent-control to benefit property owners.

</comment><comment><USER128> This will encourage landlords to tear down existing properties rather than renovate them, as well as to not maintain them well.

Rental housing quality will bifurcate further, with poor and lower middle class people living in worse housing.

This is bad policy. It's not replicating the absolutely insane policies of SF, but it's still bad.

</comment><comment><USER129> In Oregon rent control was applied in a very targeted way to encourage new building such as exemption for the first fifteen years after a building is constructed and rezoning of a massive number of lots to allow multi tenet housing.

Did the California laws include anything to encourage additional housing to be built?

<comment><USER130> AB 1482 also only applies to properties over 15 years old.

</comment></comment><comment><USER131> This is nuts. In Iowa this might be unconstitutional as the government is prevented from rewriting contracts.

</comment><comment><USER132> [http://archive.is/5jIXP](http://archive.is/5jIXP)

</comment><comment><USER44> Do statewide rules even make sense, in such a large state as California? The housing markets in the rural east and north surely are not identical to the housing market in the Bay area, San Diego, and LA. Even Sacramento's rentals are an average $1000 cheaper than the SF area.

</comment><comment><USER133> Most new (first time tenants) will get a cliff rent with next few years of upside factored in. But this will benefit existing tenants. I still think right law to change would be to allow high rises and right government intervention would be to create large scale new units

</comment><comment><USER134> Text of the bill here: [https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...](https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482)

</comment><comment><USER135> This allows for time to adjust (move) which is good. It doesn't allow the person serving the espresso to the lawyer to live next door to the lawyer. That may or may not be an ideological goal, but this doesn't address that.

</comment><comment><USER136> When rents are high we should incentivize development of more housing stock. Increase supply until the market finds balance with the demand. Rent control has the opposite effect. It's a disincentive to new development.

</comment><comment><USER49> Between this and prop 13 it might be easier to just build a wall around the state.

</comment><comment><USER137> I wonder how much someone would charge for insurance to cover the difference between 5%+inflation and market rate?

It's effectively a option on future rent prices... it shouldn't be particularly hard to value numerically.

</comment><comment><USER78> What is the historical rate of yearly rent price increase in the bay area?

</comment><comment><USER138> > The housing crisis is reaching every corner of America, where you're seeing > high home prices, high rents, evictions and homelessness that we're all > struggling to grapple with," said Assemblyman David Chiu

Chiu is being misleading, to put it mildly.

The median home value in Texas is under $200,000; in Dallas it's only $213,000. In Florida it's $235,000; in Tampa it's $219,000. In Illinois it's $182,000; in Chicago it's $226,000. In Pennsylvania it's $174,000; in Pittsburgh it's $146,000. In Ohio it's $140,000; in Cincinnati it's $144,000. And so on. So much for every corner of America.

In California it's $548,000; in San Francisco it's $1.3 million. California's housing problems are in fact not a national problem.

</comment><comment><USER139> So every landlord will now raise 5% annually even if they hadn't in the last. That's often the effect of governments regulating increases, from what I have seen of stage utility regulation.

</comment><comment><USER140> I recently bought a house in CA. Knowing this legislation was pending I didn't get roommates. I'd rather AirBnB than be forced into rent control. That's now two rooms off the market.

<comment><USER31> Did you buy a single-family home? The bill exempts single-family homes.

</comment></comment><comment><USER141> Things like this can make sense in the short term, but there needs to be sunset provisions to force a long term solution. I'm not really sure what that would look like though.

</comment><comment><USER142> I thought california was trying to reduce its homeless population?

</comment><comment><USER143> This move is already proving pretty awesome for homebuyers like me as more builders seem to be focusing on "build and sell" not instead of "build and rent out".

</comment><comment><USER144> What we really need to do is make owning a house more affordable. People buying up rental properties is a bane on the housing market and human existence in general.

</comment><comment><USER145> They could just build/provide new housing for everyone and everything would be at normal rates... But if you don't allow, then the prices go up...

</comment><comment><USER146> This is _not_ "approve by California" yet.

It passed in the assembly, but must also pass in the senate and be signed by the governor before it actually is law!

</comment><comment><USER147> Just great news. Landlords would also raise rents to kick people out they didn't like. Then reduce the rent back with the new tenants.

</comment><comment><USER148> Won't this slow down gentrification of a neighborhood? There's neighborhoods in most cities that 10 years ago were 'the bad neighborhood' that have become walkable and popular again.

It's hardly unfeasible for the bid area to have a rent of <$500, but after gentrification could easily pull $1500. At a 5% cap a year, it would take considerably longer to reach this price, which will likely slowly down the conversion of these areas, as the demographics would change much more slowly.

</comment><comment><USER149> This is a really difficult-to-solve problem. I never found a city with good prices for housing (compared to the local average salary).

</comment><comment><USER150> So if a new apartment comes on the market in SF (never gonna happen, I know) what rental rates can they start with? Whatever they want?

</comment><comment><USER151> How does this work? Can't the landlord just refuse to renew the lease, and then lease it out to someone else with a higher rent?

<comment><USER152> Turning over the leaseholder has a cost all by itself. But more importantly, there is also the reputation damage you'd sustain by doing this. Consider, any perspective leaseholder who googles the property could find that out that you're kicking out the tenant to increase the rent. That would drastically reduce the potential demand from people looking for the security of a long- term occupancy. So, yes, it might be possible for a landlord to do that. But if he does it twice, he will earn a reputation and only attract short-term tenants. This means, it is an option only for the most short-sighted and stupid landlords.

</comment></comment><comment><USER153> Can anyone point to a place (city, state, country) where homelessness and housing supply were positively impacted by rent control?

</comment><comment><USER154> Rent control benefits renters in the short term who don't want or don't need to move. However, property owners can't price rents according to market conditions. This suddenly lowers the value of rental property and will mean that there is less incentive to build new rental property or maintain or improve existing rental property.

Where else is it being done? Is it a success in these places? There must be some places it is viewed as working or why else would California do this.

</comment><comment><USER155> Any rent control is a distortion that should not be done. Open up property rights and get more high-density housing built. Done.

</comment><comment><USER156> I'd be down if rich yuppies like me got not rent control, but a retiree got all the protections. Where do we draw the line?

</comment><comment><USER157> I agree that at this point rent control is a good option. Housing prices are going up so fast that rents need to go up too. The higher rents then give an incentive for house prices to go up. It becomes a cycle for both to increase. But rent control by itself is not enough. The other leg of the solution is to increase housing via governmental incentives. Otherwise, rent control will make the situation worse since there is no incentive to increase housing.

<comment><USER158> The problem is that increasing rent has no restraint in CA.

When a landlord increases rent by X% they are saying that the value of the property has increased by X%. Unfortunately businesses and landlords got together to push (and pass) prop 13 which amended the CA constitution to prevent assessed property value from increasing at more than 2% per year.

That means any time a landlord increases rent by more than 2% they are benefiting from incorrect taxable valuation. Because property taxes cover the infrastructure that supports homes + buildings (the roads, police, firefighters, teachers, etc) they are directly offloading the costs of those services onto people who don't own property: The people who don't own property then have to (in addition to insane rent increases) pay higher income taxes, in order to support those services the are functionally there to benefit the undertaxed properties.

<comment><USER64> The cost of being a landlord is much more than just property taxes.

</comment></comment></comment><comment><USER159> Another unintended consequence is likely to be a degradation in the average quality of the housing stock. Everything gets old and needs to be replaced / upgraded. With limited ability to pass on the cost of improvements, and less mobility for tenants, the best strategy for owners is to extract value from the property by neglecting repairs. The annual rent increase can be pegged at maximum, while the building itself moves "down market".

</comment><comment><USER160> Well, looks like I will be forced to increase the rent next year to a maximum so I can decrease long term risk.

</comment><comment><USER161> In the past 5 years in Bay Area. My rent has been increasing by 9-10% every year, so I welcome this law.

</comment><comment><USER162> As a Marylander, I'm okay with this. Let California destroy itself. Better for the rest of us.

<comment><USER31> An allowable increase of 5% per year plus inflation that expires after 10 years and exempts single-family homes and new construction isn't going to destroy anything. That amount is in line with the amount market rate rents have been rising on their own. We're not talking San Francisco rent control here.

</comment></comment><comment><USER163> The problem is we need new housing units and the local governments usually make the construction process so difficult that it's becoming increasingly unprofitable unless you are a very large corporation. This makes it even more difficult, especially in the multifamily space.

</comment><comment><USER164> California is certainly coming out with a bevy of terrible legislation recently. This particular one should be entitled "The Disincentive to Produce and Maintain a Healthy Stock of Rental Housing Act".

</comment><comment><USER165> Well there goes the state. These people have no clue how to manage a state. This will ruin what's left of the housing market and make the state completely unlivable.

</comment><comment><USER166> What has changed in the new state laws?

</comment><comment><USER167> It is fun watching the Democrats running California to self pwn themselves over and over with idiotic legislation like this.

</comment><comment><USER168> It's about time. Landlords have been exploiting tenants in California (and across the US) for far too long.

</comment><comment><USER169> The only positive about this (counter intuitively) is that it will show that rent control does not work

</comment><comment><USER170> Supply and demand

</comment><comment><USER171> Really cool

</comment><comment><USER172> Wow. State takeover of everything. Downright scary

</comment><comment><USER25> I'm surprised to read negative opinions about rent control. The alternative to rent control is having one's rent double next week. I'm amazed that rent control was not a thing!

<comment><USER173> Sorry if this comes off snarky but perhaps others posting here can see past next week. All too often these quick fix Band-Aids end up causing more problems in the long run while also spreading the problem far beyond where it had previously been contained.

<comment><USER25> Sure. In the mean time I'm not renting your place if it doesn't have rent control. And anybody who does is insane.

<comment><USER167> Market solutions in action in these last 2 posts!

<comment><USER25> The market solution is rent control + more housing. We got one.

<comment><USER64> Except rent control means less housing!

<comment><USER112> Source?

</comment></comment></comment></comment></comment></comment></comment><comment><USER174> HN: According to the simple laws of supply and demand, housing prices would go down if we just increased supply to meet demand.

Also HN: These rent controls are just going to make the housing problem in this state even worse.

I don't get it. If the situation were really as simple as the first statement implies, then if this particular law was really going to have a catastrophic effect on housing, that would just mean people would leave and demand would go down and prices would fall, right?

Is it possible that California's housing problems are maybe a little more complex than a few out-of-context pull-quotes from Wealth of Nations would suggest?

<comment><USER175> I think you're intentionally misrepresenting the opposing viewpoint. If rent control artificially reduces the price of housing, more people will want to live in CA. Less houses will be built, as less profit is being made. Therefore, prices will be lower for those already housed, yet more people will be unable to purchase a home.

Of course the million dollar question is how many less units will be built if they're less profitable, and how many people will be enticed to move or stay in CA because of rent controls.

<comment><USER174> > _If rent control artificially reduces the price of housing, more people will > want to live in CA._

There were two other comments in this same subthread pointing out that people are in fact moving out of California. (One of them has been deleted.)

It's almost as if f(california_net_migration) is multivariate.

> _Less houses will be built, as less profit is being made._

Residential construction in California has been approximately steadily climbing since 2008 [1]. Even if I believed your premise -- which I don't -- reality disagrees with it. The conditions surrounding new residential construction are so much more complex than merely "omg rent control".

A San Jose Mercury News article published last year discussed some of the influences in new residential construction: [https://extras.mercurynews.com/blame/](https://extras.mercurynews.com/blame/)

Strangely absent from that article though is that people don't want to just "live in California"; they want to live in the same places where everyone else is already living. There is plenty of affordable land in the central valley, in Kern County, and lots of other places with stagnant economies and depressing downtowns. But if you want to live in San Francisco, expect to pay a stupid amount of money for a vacant lot [2]. Again: this is not a situation that rent control is going to have any effect on whatsoever.

> _Therefore, prices will be lower for those already housed, yet more people > will be unable to purchase a home._

Funny, this sounds quite a bit like the situation that Proposition 13 created back in 1978 [3].

And yet, proposition 13 is rarely cited as a significant contributor to California's housing issues, especially by the "this is simple supply and demand" crowd. Personally, while I suspect proposition 13 has contributed, there are lots of other factors, including foreign investment [4].

But maybe we'll soon see just how much of an effect that particular factor has had in housing costs [5].

Sure though, rent control is gonna have a huge impact on California's housing prices. Totally.

[1]: [https://journal.firsttuesday.us/the-rising-trend-in- californ...](https://journal.firsttuesday.us/the-rising-trend-in-california- construction-starts/17939/)

[2]: [https://sanfrancisco.cbslocal.com/2016/10/21/san- francisco-v...](https://sanfrancisco.cbslocal.com/2016/10/21/san-francisco- vacant-lots-millions/)

[3]: [https://en.wikipedia.org/wiki/1978_California_Proposition_13](https://en.wikipedia.org/wiki/1978_California_Proposition_13)

[4]: [https://calmatters.org/housing/2018/03/data-dig-are- foreign-...](https://calmatters.org/housing/2018/03/data-dig-are-foreign- investors-driving-up-real-estate-in-your-california-neighborhood/)

[5]: [https://www.cnbc.com/2019/07/17/foreign-purchases-of- america...](https://www.cnbc.com/2019/07/17/foreign-purchases-of-american- homes-plunge-36percent-as-chinese-buyers-flee.html)

<comment><USER175> >And yet, proposition 13 is rarely cited as a significant contributor to California's housing issues, especially by the "this is simple supply and demand" crowd. Personally, while I suspect proposition 13 has contributed, there are lots of other factors, including foreign investment [4].

Really? Because I am vehemently anti prop 13, and I don't think you have to go far to find people that hate it too. So I'm not sure you can use that criticism against me. That's essentially a straw man.

> Less houses will be built, as less profit is being made.

This is more or less a factual statement, that if less profit is to be made by renting houses at least some portion of people will choose to invest in other things. Whether that portion is even noticeable, I don't know

>There were two other comments in this same subthread pointing out that people are in fact moving out of California. (One of them has been deleted.)

>It's almost as if f(california_net_migration) is multivariate.

If you want to have a serious conversation, being snarky isn't going to help. Regardless of net migration statistic, California is still growing in population. SF is still growing, and the state overall sees positive growth.

</comment></comment></comment></comment><comment><USER176> Perhaps an alternative real solution to the housing crises is the abolishment of professional landlords themselves. Why should we support a system where people can own many properties, each feeding them 1/2 of someone else's paycheck? Public-owned housing is the future. It works in Europe and it can work here.

Treating housing as an investment vehicle is fundamentally incompatible with the ideal of housing being affordable. How can you possibly have affordable housing in a system where housing increases in value (cost) at 5% a year? Who could possibly afford it after several decades of compound growth?

<comment><USER68> So how is housing going to get built? Are you suggesting that the state have a monopoly on buildings and housing? What process do we use to begin the expropriations and confiscations?

<comment> munk-a Sorry, to clarify... Are you saying that because we have public transit no one can own cars anymore?

The generous way to read the post above is an arrangement where property ownership can be both public and private - possibly where rental units are majority state owned and private ownership is more concentrated in actual residents.

<comment><USER177> >Sorry, to clarify... Are you saying that because we have public transit no one can own cars anymore?

You joke but many people here would support just that.

<comment> munk-a Eeeeh, in the long run I think it'll just become unnecessary to own a personal car for most people if self-driving car fleets become a thing - I dunno... it might be a luxury like owning your own boat, if you're vacationing on a lake you can always rent one so why pay to maintain something you very rarely need... more apt might be to consider it equivalent to owning your own train car.

At any rate I don't think personal property ownership should be made illegal, it could just be made to cost - taxi companies are taxed for running a fleet of vehicles and charging people to ride on them, that sort of mass property ownership could be similarly taxed.</comment></comment></comment></comment></comment>