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Across the US, cities are becoming more crowded and more expensive. Low wages and gentrification are forcing many poor people to move out of neighborhoods their families have lived in for generations as housing costs rise. The proposed responses are varied, from tax breaks and subsidies for developers (a traditionally right-wing idea) to rent-control and construction of more public housing (from the left.) One of these proposals, rent control, is more controversial: many economists claim that it will distort housing markets, remove the incentive to develop and result in even LESS housing for the poor. Others contend that this is simply a bias of neoliberal economists against regulation, and that rent control works well if implemented in the right tome and place. What do you think, D&D? Is rent control a viable option for making life affordable for people getting priced out of their neighborhoods? Germany's Angela Merkel, known for her economic orthodoxy, is currently working to implement rent controls, and it will be a ballot issue in many cities (except in Colorado and other states where it is unconstitutional). OwlBot 2000 fucked around with this message at 08:52 on Oct 16, 2014 |
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Oct 16, 2014 08:49
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The United States differs from Germany in that the discussion and reality of housing cannot be separated from the formers racial politics. White liberals especially have seen the lifestyle that middle class urban living in Europe can offer and 50 years of white flight to the suburbs is fast reversing. Soaring prices in DC, the closure of schools in Chicago and stop and frisk in NYC are policies that push poor blacks out of desirable locations to make way for white middle class gentrification. Even South Central LA is in the first stages of this while San Francisco was ahead of the game to the extent that now the White middle classes are being pushed out by the super rich. And every one of those cities has a solid liberal Democratic administration.
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Oct 16, 2014 09:20
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OwlBot 2000 posted:Across the US, cities are becoming more crowded and more expensive. Low wages and gentrification are forcing many poor people to move out of neighborhoods their families have lived in for generations as housing costs rise. The proposed responses are varied, from tax breaks and subsidies for developers (a traditionally right-wing idea) to rent-control and construction of more public housing (from the left.) One of these proposals, rent control, is more controversial: many economists claim that it will distort housing markets, remove the incentive to develop and result in even LESS housing for the poor. Others contend that this is simply a bias of neoliberal economists against regulation, and that rent control works well if implemented in the right tome and place. What do you think, D&D? Is rent control a viable option for making life affordable for people getting priced out of their neighborhoods? A rent control scheme that allowed a landlord to charge enough to cover taxes, maintenance and a return on invested capital with an allowance for a vacancy rate would probably be less distorting than otherwise. OTOH, arguing with the rate board would probably be a PITA and the landlord would be have to be making less than they could in an unregulated development or else what's the point of the rent control scheme? On the third hand, it would probably suck for property owners who have lived in the neighborhood for generations and want to cash out by either selling or renting their buildings by forcing down both rents and property values. On the fourth hand, effective rent control is guaranteed to create demand for grey market subletting that whoever is renting a unit at the time the measure goes through will be able to take advantage of. And independent of all that we have to ask the question "should we care that poor people are moving out of this neighborhood anyway", and I think the response to that is not obviously "yes" independent of circumstances. So in conclusion: It would probably be more useful to talk about a specific program in a specific place than to debate the merits of rent control as a general idea.
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Oct 16, 2014 13:47
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wateroverfire posted:A rent control scheme that allowed a landlord to charge enough to cover taxes, maintenance and a return on invested capital with an allowance for a vacancy rate would probably be less distorting than otherwise. OTOH, arguing with the rate board would probably be a PITA and the landlord would be have to be making less than they could in an unregulated development or else what's the point of the rent control scheme? On the third hand, it would probably suck for property owners who have lived in the neighborhood for generations and want to cash out by either selling or renting their buildings by forcing down both rents and property values. On the fourth hand, effective rent control is guaranteed to create demand for grey market subletting that whoever is renting a unit at the time the measure goes through will be able to take advantage of. Landlords having to do more work for their money than sit back and collect it? Say it isn't so.
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Oct 16, 2014 14:44
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Housing prices don't just rise on their own - there are various economic factors that affect the price. Rent control, which hamfistedly enforces price caps without addressing or even acknowledging the underlying reasons for the high prices, is pretty much guaranteed to screw up the market in some way. SF is a perfect example - housing is too drat expensive there, but that's mainly because idiotic zoning policies and other bad decisions have resulted in an acute housing shortage for that high-demand area. Rent control would just ensure that instead of there being "no affordable apartments" there would be "no available apartments", because the high prices were just a symptom of a deeper problem that rent control didn't fix. Rent control can work as a temporary fix to keep things affordable until the deeper problem is fixed, but it's instead usually used as a crutch to hide the symptoms of the problem so that it can more easily be ignored.
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Oct 16, 2014 15:00
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I don't think we can discuss housing and rent control without also discussing the trend of hedge funds purchasing and managing large swaths of housing, or "government backed reverse mortgages", or civil forfeiture of houses to the police.
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Oct 16, 2014 15:20
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Main Paineframe posted:Housing prices don't just rise on their own - there are various economic factors that affect the price. Rent control, which hamfistedly enforces price caps without addressing or even acknowledging the underlying reasons for the high prices, is pretty much guaranteed to screw up the market in some way. Rent control and overly restrictive zoning are pretty complementary. The primary symptom of overly restrictive zoning is high prices (which is mitigated by rent control) and the primary symptom of rent control is that no new housing gets built (which is impossible anyway due to bad zoning). Chicago is also suffering from a bad zoning problem - in a lot of areas you're not allowed to build anything except single family homes and maybe a three flat. Homeowners want to restrict the number of units to benefit from high prices. It's gotten to the point where many neighborhoods that have seen the largest growth in housing prices have actually seen a reduction in units, which is just backwards.
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Oct 16, 2014 15:30
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I don't like rent controls because I view it from an economist's perspective. They would add distortion to the market, and not solve the underlying cause. I DO want to fix the issues rent controls seek to solve/passivate, but there isn't much consensus on the causes, their solutions and the implementation of those solutions. Ask five different people involved with the issue and you likely get 5 different causes, solutions and implementations. I've noticed this pattern in other issues, like the minimum wage. Poli's say "Distort the market, fix the symptom of this problem." Fair enough, it's popular. Eco's respond "No, that may have unexpected consequences, maybe worse than the original symptom. Find the underlying cause and fix that." The problem you then run into is that the underlying causes are very broad and already hotly debated: education, wealth disparity, poverty etc. I agree with the economists, but I'm starting to wonder how practical their argument is. It usually leads to a noisy, less clear solution that makes quite a few assumptions. Perhaps it's something that is not politically feasible in the foreseeable future. In the end one doesn't end up with a clear alternative to the Poli's "Fix the symptom" and assuming THAT even has enough support, it wins by default. Maybe it is more productive to figure out how to minimize the externalities of policies that by design create distortion, although that itself can also be problematic (your fixes for side effects have side effects).
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Oct 16, 2014 15:45
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Ian Winthorpe III posted:The United States differs from Germany in that the discussion and reality of housing cannot be separated from the formers racial politics. White liberals especially have seen the lifestyle that middle class urban living in Europe can offer and 50 years of white flight to the suburbs is fast reversing. Soaring prices in DC, the closure of schools in Chicago and stop and frisk in NYC are policies that push poor blacks out of desirable locations to make way for white middle class gentrification. Even South Central LA is in the first stages of this while San Francisco was ahead of the game to the extent that now the White middle classes are being pushed out by the super rich. In other news, it's interesting to note that so-called "affordable housing", even in reliably liberal Democratic strongholds like NYC, isn't what you'd think it is. People paying top dollar to live in a glitzy new building don't want to run into poors in the elevator. So the city allows the developer to build "poor doors", or separate entrances for the subsidized rent set. More interestingly, however, is the qualification process to obtain the affordable housing in the first place. The city contracts this out to a private service to conduct a lottery, but you have to apply. And to apply, you have to pass a background check, a credit check, and jump through numerous hoops in your application, which will be denied for petty reasons such as using Express Mail instead of Priority Mail. So instead of a destitute family, you end up with lots of people working low-pay high-status jobs like assistant professors at NYU, city employees, journalists, etc. taking those apartments. Still, with all the development going on, you end up with a glut of these apartments, and the city ends up raising the maximum income to qualify. Mind you, it doesn't remove those other roadblocks, it's just that now associate professors and newspaper editors can qualify as well.
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Oct 16, 2014 15:51
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I am by no means an expert in this area, but from what I've heard rent controls in San Francisco have led to landlords just evicting people when they wanted to raise the rent instead of pricing them out the old-fashioned way.
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Oct 16, 2014 15:53
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Polish Avenger posted:I agree with the economists, but I'm starting to wonder how practical their argument is. It usually leads to a noisy, less clear solution that makes quite a few assumptions. Perhaps it's something that is not politically feasible in the foreseeable future. In the end one doesn't end up with a clear alternative to the Poli's "Fix the symptom" and assuming THAT even has enough support, it wins by default. Maybe it is more productive to figure out how to minimize the externalities of policies that by design create distortion, although that itself can also be problematic (your fixes for side effects have side effects). It depends a lot on how severe the cause of the problem is, what the symptoms are, and so forth. Things like wages and poverty go down to the very roots of capitalism; high housing prices, on the other hand, are often a result of deliberate market manipulation, either by financial companies or by local government. The latter is far less problematic to fix than the former. loquacius posted:I am by no means an expert in this area, but from what I've heard rent controls in San Francisco have led to landlords just evicting people when they wanted to raise the rent instead of pricing them out the old-fashioned way. This is typically illegal and tightly regulated - you can't evict someone to get out of rent control and then promptly rent it again. What you've probably heard about is landlords evicting people because they're "taking the unit off the market", and them quietly listing their new room on sharing sites like Airbnb, justifying it by claiming that they're just "house-sharing a private room for money" rather than "renting it out as a rental property". It's just an attempt to piggyback on the sharing economy's love of redefining terms to avoid legal regulations on the service they're selling.
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Oct 16, 2014 17:13
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wateroverfire posted:A rent control scheme that allowed a landlord to charge enough to cover taxes, maintenance and a return on invested capital with an allowance for a vacancy rate would probably be less distorting than otherwise. OTOH, arguing with the rate board would probably be a PITA and the landlord would be have to be making less than they could in an unregulated development or else what's the point of the rent control scheme? On the third hand, it would probably suck for property owners who have lived in the neighborhood for generations and want to cash out by either selling or renting their buildings by forcing down both rents and property values. On the fourth hand, effective rent control is guaranteed to create demand for grey market subletting that whoever is renting a unit at the time the measure goes through will be able to take advantage of. I love how almost your entire post is listing how rent control is bad for landlords, which is basically the entire point of rent control.
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Oct 16, 2014 18:06
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Zeitgueist posted:I love how almost your entire post is listing how rent control is bad for landlords, which is basically the entire point of rent control. Just because it is bad for land lords does not mean it's good for tenants. With artificially low rates and some cities that have rent control on all buildings built before 1978 (eg Los Angeles), rent controlled buildings become a prime spot to buy and flip (bad for tenants) because there is such a large upside in potential gross income. On top of that, rent controlled buildings are prime investment opportunities because they are generally old; like I said earlier some cities make the distinction between rent controlled and not rent controlled based on the year built. Older buildings are 'grand-fathered' in with their zoning. It's not a surprise that an old project has a density of 1 Dwelling Unit/1,000 SF and a new one has 1 Dwelling Unit/2,500 SF. The higher the density the better for land lords. In places like Los Angeles, you simply cannot build as many units on the same lot as you were able to. It's just not legal anymore but laws like SB 2112 (California) let you rebuild a property that may be legal non-conforming if its involuntarily destroyed. Essentially this means your investment in a super high density old project is safe because you can always squeeze the same amount of units in should something happen (earthquake or whatever). I don't know where I stand about rent control. I have lived all over the world and I have lived in rent controlled areas and places that had market rents. I have also worked in real estate and see how easy it is and how some land lords prefer to buy rent controlled buildings because the larger upside in some cases. On top of that, I have lived in Manhattan where my rent was a huge part of my paycheck and it was crushing. Lastly, I note that small apartment projects are good investment opportunities even for first time buyers, especially with a FHA loan for an owner-user apartment complex (tenants pay off your mortgage). Either way, I have experienced the good and bad about it and I still am not sure if it's essentially a good or bad thing. But all I have to say is that housing is absurdly expensive not only in the US but in other places as well. Paris, London, NYC come to mind. Berlin was the only place where I felt like rent wasn't too bad but trying to buy there seems a bit risky because the gross income multipliers and capitalization rates are at the absurd sometimes because rents are so low there. It's almost better to rent than own there. I thought about buying an apartment in Berlin for investment purposes and the Gross Income Multiplier was around 25x and the OAR was something like 2% which is ridiculous. The price was something like 1,500 EUR/square meter. So unless you are absurdly rich and can buy a place and afford the mortgage on your own you need some sort of income (rent from tenants) to help pay down the mortgage and if rents are low then any sort of entry level investment opportunity is pretty risky because you are just trying to break even. As I said earlier, I am not sure if rent control is a good or bad thing, but I have to say that there are a lot of ways it can screw over middle class people who are trying to invest into real estate for the first time because they don't have as much capital available to them as the super rich. I will say though with 30 year Treasury Notes yielding absolutely nothing in investment opportunity, the housing crash of 2007/2008 and other avenues of investment that are risky or yield too little, apartments are still one of the few places that are relatively 'safe' to invest in. Even if the price of the complex goes underwater, you still have rents to help you at least break even. Not sure where most middle class people think they are going to make investments to try to improve their situation. Investing in a treasury note won't even cover inflation really. loquacius posted:I am by no means an expert in this area, but from what I've heard rent controls in San Francisco have led to landlords just evicting people when they wanted to raise the rent instead of pricing them out the old-fashioned way. Some other cities, such as Palm Springs, peg the rent based on a % of certain indexes. I know less about SF rent control but I imagine it is something similar to NY or LA where you can basically do renovations which let you bump the rent up and push people out. The faster you get out long term tenants out and get new tenants with rents closer to market rents the faster you can start generating more money out of the project. Which is nice especially in California because if you buy a rent controlled building that has severely depressed rents especially at a low price your property taxes will be quite low (max in California is ~1% of the property value). So if you don't sell the property, you can pay artificially low property taxes and generate rents that are at market levels. e: edits made. Sort of shot from the hip but hopefully gives some insight. Without getting into too much details, I spend a significant amount of time with people who buy and sell real estate (for work) and about 40% of them are rent controlled so maybe I can give a bit perspective on some other angels. I will say that some people are pretty blatant and open about wanting to kick out all the tenants as soon as the deal closes with the short-term plan to flip the property asap. 2nd edit: The one thing I will say about Germany vs the US in terms of rent control or any sort of housing restrictions between land lord vs tenant is that I think Germany does a lot better to protect long-term tenants against eviction. Yes you may have done renovations and are trying to raise rents, but you can't just kick someone out after 30 days notice like in the US. In Germany the amount of eviction notice you have to give is based on how long the tenant has stayed there. After a certain amount of years the tenant gets an extra 3+ months of eviction notice and for really long term tenants you'd have to give something like a half year+ of eviction notice. Enigma89 fucked around with this message at 18:49 on Oct 16, 2014 |
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Oct 16, 2014 18:20
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esquilax posted:Rent control and overly restrictive zoning are pretty complementary. The primary symptom of overly restrictive zoning is high prices (which is mitigated by rent control) and the primary symptom of rent control is that no new housing gets built (which is impossible anyway due to bad zoning). Are there any maps of this zoning? I thought one of the primary reasons for the 3flats was requirements for elevators on taller buildings, so it didn't make any economical sense to build that high. That being said, you can have really high density with nonstop 3flats everywhere.
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Oct 16, 2014 18:54
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Interlude posted:In other news, it's interesting to note that so-called "affordable housing", even in reliably liberal Democratic strongholds like NYC, isn't what you'd think it is. People paying top dollar to live in a glitzy new building don't want to run into poors in the elevator. So the city allows the developer to build "poor doors", or separate entrances for the subsidized rent set. To be fair these projects are not really being built for affordable housing. They are luxury condos that is more or less being forced by the government to provide some affordable housing units in order to receive a higher maximum allowable density. I'm not saying the 'poor doors' are a good thing. I am just saying that the people living there are generally at high paying jobs who can afford the insane rents there and are essentially subsdizing the people who are living in the low income units. My flatmates (three of us) and I paid around $3,000 a month for a 650 square foot apartment in Manhattan. The apartment directly across from us paid $300 a month (old Chinese couple). The only question I asked myself a lot during that time is that if everyone in the building paid closer to market rent if it would be fairer and lower for everyone in general. Or if over time the land lords would just charge everyone the extreme prices. Essentially what I am wondering is if by having rent control in these buildings it inflates the price for people who 'can' (barely) afford it at the price of helping a few people in the building to skate by with low rents. esquilax posted:Rent control and overly restrictive zoning are pretty complementary. The primary symptom of overly restrictive zoning is high prices (which is mitigated by rent control) and the primary symptom of rent control is that no new housing gets built (which is impossible anyway due to bad zoning). On top of that, during the boom a lot of apartment complexes were converted to condo units so the number of rentable units actually went down which raises the price for everyone else. I wrote a lot in those 2 posts, sort of a lot of random thoughts that I have been thinking about the last few 6 months so this thread came at a good time but if I had to point my finger at any one single issue it would be zoning. I am eager that there is someone in D&D that knows more on the subject because I'd be curious to read about it. Enigma89 fucked around with this message at 19:13 on Oct 16, 2014 |
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Oct 16, 2014 18:56
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mastershakeman posted:Are there any maps of this zoning? I thought one of the primary reasons for the 3flats was requirements for elevators on taller buildings, so it didn't make any economical sense to build that high. Here's one that covers a lot of it:  Yellow is non-residential only, so no homes at all. Red is single-family homes only, so no two-flats or three-flats allowed at all. Black allows multi-unit, but a most of it can't be over 4 floors. Here's a more detailed map of it. Click on any of the green areas, it will tell you the zone. It's hard to build much more than a two-flat in R-3 zones. https://www.google.com/fusiontables/DataSource?docid=1HmI6PT0q7rFbEXDfEt2VTbFyZVLZn__58AUe86E#map:id=4 With explanation of zoning type. http://secondcityzoning.org/zones#R A guy I know runs a really good blog on Chicago housing and zoning, it's been getting a lot of press lately. The first map is from there. http://danielkayhertz.com/
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Oct 16, 2014 19:27
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I am familiar with zoning and have seen how it directly affects people, but how does rent control actually work? Who does what?
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Oct 16, 2014 19:59
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mugrim posted:I am familiar with zoning and have seen how it directly affects people, but how does rent control actually work? Who does what? Essentially land lords are limited on how much they can increase rents by a % unless certain requirements are met (tenants moving out or improvements/renovations). The thinking is, if someone moves out then you can bump the rent up. Or if you do renovations then the increase in rents should help compensate the land lords for the money they spent on fixing up the property. I know land lords are painted as villains in a lot of places and in some places most are right (NYC comes to mind) but in other places rent control does make investing in apartments a bit risky and it boxes out a lot of people in the middle class trying to find any safe/reasonable investment opportunity. Enigma89 fucked around with this message at 20:20 on Oct 16, 2014 |
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Oct 16, 2014 20:12
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Rent control may help a bit but landlords will find every way to get around it and many cities that have rent control have simply loosened them over time. DC theoretically still has rent control but doesn't apply to housing after 1975. Ironically, the solution would be multiple ranges of public housing together with mass transit but that is what the Soviets did (although the housing often was substandard). However, that sort of development is going to have to necessitate a real change in how housing is done in the US and requires enough rent/maintenance fees from renters to keep the property up to avoid the "vertical ghetto" trap.
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Oct 16, 2014 20:49
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Ardennes posted:Rent control may help a bit but landlords will find every way to get around it and many cities that have rent control have simply loosened them over time. DC theoretically still has rent control but doesn't apply to housing after 1975. New York has the mass transit but the not the right amount of housing quantity to really supply everyone. Prices are still rapidly going up and even people with decent jobs are being priced out to the outer areas like Bushwick. I remember when I first moved to New York, I couldn't afford to live in Manhattan as an intern so I lived in Brooklyn. There was one street that I would not cross at night because things got a bit sketchy there. I ended up moving to Manhattan and heard about the rapid gentrification of Brooklyn. I went back to visit my old area and I noticed that on my self-made border there was a new bagel shop that sold loxs on bagels  So yes, mass transit does help for more areas to be viable to live in and to help a bit but if you do not have the quantity then people are just pushed to the fringes instead of actually living within their city. I still can't believe people are dropping $1,000,000 on apartments in Bushwick. Bit of a pinpoint example but New York is a pretty good example of how bad a housing situation can get. I can't believe that a world class city like New York has some pretty basic problems when it comes to housing. NYC did flex their rules on zoning for micro apartments, I know Seattle did the same. It will be interesting to see if it will work, I know I would of gladly live in a microunit when I first moved to New York, I did hear that the rents for those units (~200 SF) is around $900/Month for micro-units in Manhattan which is somewhat reasonable especially when you consider the location. I think the most depressing thing about bouncing around relevant world capitols is that even people who are well educated have 'given up' with ever trying to own an apartment or home in the city and are fine with the idea of renting for the rest of their life because the prices are just too obscene. As soon as you go into the interior of those countries things are a bit different and people see home ownership as a major goal. I can't see how the problem doesn't spread. Enigma89 fucked around with this message at 21:07 on Oct 16, 2014 |
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Oct 16, 2014 20:58
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Enigma89 posted:New York has the mass transit but the not the right amount of housing quantity to really supply everyone. Prices are still rapidly going up and even people with decent jobs are being priced out to the outer areas like Bushwick. I remember when I first moved to New York, I couldn't afford to live in Manhattan as an intern so I lived in Brooklyn. In the case of New York, obviously the issue is going to be space, but ultimately New York did have integrated public housing that once worked and theoretically could again. There really isn't anywhere to build on Manhattan without very high cost but I think it could be done. Ultimately, microunits are a rather emergency solution that works for single people in their 20s but New York needs more serious housing for everyone else and if anything it requires some radical intervention. That said, at least New York has a mass transit system which gives some flexibility to he issue.
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Oct 16, 2014 21:06
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New York can build more units vertical in Manhattan and is doing that, the problem is it's all luxury apartment nobody can afford and those who can won't live there.
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Oct 16, 2014 21:18
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esquilax posted:Here's one that covers a lot of it: Wow, that's fantastic. Thanks a ton.
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Oct 16, 2014 21:26
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Zeitgueist posted:New York can build more units vertical in Manhattan and is doing that, the problem is it's all luxury apartment nobody can afford and those who can won't live there. I think those apartments eventually are bought, but the land their own is super costly. So either the government absorbs that cost or it is just going to be expensive by default.
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Oct 16, 2014 21:29
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Ardennes posted:I think those apartments eventually are bought, but the land their own is super costly. So either the government absorbs that cost or it is just going to be expensive by default. Well they're already giving the luxury developers tax breaks to build there.
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Oct 16, 2014 21:33
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Zeitgueist posted:Well they're already giving the luxury developers tax breaks to build there. Which shouldn't happen, but the issue is larger than tax breaks, it is more about how the US economy works and the type of results it gives.
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Oct 16, 2014 21:48
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Ardennes posted:but the issue is larger than tax breaks, On this issue of tax breaks and housing..... 
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Oct 16, 2014 21:54
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Here's how to fix gentrification. Local jurisdictions are already allowed to create tax districts with special property tax rules. When an area is ripe for gentrification, create a tax zone which applies to any property owner who lives in the house or has family living in the house as a sole residence. Either freeze the property tax or allow it to rise a small amount every year. When the house is sold, the new owner is subject to the full property tax assessment. This would prevent current residents from being chased from their homes due to exploding tax bills while also permitting them to cash out and sell their homes for the new higher prices if they choose. boner confessor fucked around with this message at 21:59 on Oct 16, 2014 |
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Oct 16, 2014 21:56
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OwlBot 2000 posted:Across the US, cities are becoming more crowded and more expensive. Low wages and gentrification are forcing many poor people to move out of neighborhoods their families have lived in for generations as housing costs rise. The proposed responses are varied, from tax breaks and subsidies for developers (a traditionally right-wing idea) to rent-control and construction of more public housing (from the left.) One of these proposals, rent control, is more controversial: many economists claim that it will distort housing markets, remove the incentive to develop and result in even LESS housing for the poor. Others contend that this is simply a bias of neoliberal economists against regulation, and that rent control works well if implemented in the right tome and place. What do you think, D&D? Is rent control a viable option for making life affordable for people getting priced out of their neighborhoods? No of course not, rent control has failed at it's purported goals in every place it has been implemented. You simply can't wave your arms to fix the problem that there are places that are extremely desirable to live and those there aren't- even in Cuba with massive amounts of market interference this has failed. It's also massively unfair for those who don't win the housing lottery. i am harry posted:I don't think we can discuss housing and rent control without also discussing the trend of hedge funds purchasing and managing large swaths of housing, or "government backed reverse mortgages", or civil forfeiture of houses to the police. Right, any successful implementation of rent controls would require a massive change in how are financial markets work and how homes are sold. In short rent control is catnip for low-info voters and its implementation is that of a noose rather than a tourniquet. See: San Francisco et al. Zeitgueist posted:I love how almost your entire post is listing how rent control is bad for landlords, which is basically the entire point of rent control. Landlords are like anyone else, they need to make a profit from taking risk or there is no point to taking risk. Do you expect your credit cards to not charge you interest? Does your bank give you loans for free? Look at all the silly things Islamic Banking does to get around the restrictions on it- not even god can stop it apparently. Likewise it is trivial to loophole around rent control, hence why it has never worked. And I thought the point of rent control was affordable housing, not sticking it to the 'man'. Enigma89 posted:New York has the mass transit but the not the right amount of housing quantity to really supply everyone. Prices are still rapidly going up and even people with decent jobs are being priced out to the outer areas like Bushwick. I remember when I first moved to New York, I couldn't afford to live in Manhattan as an intern so I lived in Brooklyn. What's really is that there are people who will argue it was a bad thing that a dangerous area became a nice place to live.quote:I think the most depressing thing about bouncing around relevant world capitols is that even people who are well educated have 'given up' with ever trying to own an apartment or home in the city and are fine with the idea of renting for the rest of their life because the prices are just too obscene. As soon as you go into the interior of those countries things are a bit different and people see home ownership as a major goal. This isn't depressing at all, renting can easily be the smarter choice and it certainly is for nearly every young person, particularly if you are talking about city condos (might as well play the lotto).
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Oct 16, 2014 21:59
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Also the government needs to get back into constructing, but not managing housing. The primary reason for lack of affordable housing is that in high demand markets, developers chase the most lucrative customers. Very few developers target the middle and low income brackets, housing for these demographics tends to trickle down from high to low as the area becomes undesirable for whatever reason (this is why first- and second-generation suburbs are the new ghettos). The government needs to directly fund the construction of apartment and condo buildings which are then sold off at a fixed rate, with a deed restriction that the rent or sale price can't be more than X% of median housing cost or whatever. The idea is to inject more units directly into the medium/low cost markets without waiting for housing to decay enough to become affordably priced. Affordable housing allowances and restrictions kind of do this, by imposing a burden on the developer in exchange for more permissive FAR or parking restrictions or whatever other zoning variance is handy.
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Oct 16, 2014 22:06
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Popular Thug Drink posted:Here's how to fix gentrification. Local jurisdictions are already allowed to create tax districts with special property tax rules. When an area is ripe for gentrification, create a tax zone which applies to any property owner who lives in the house or has family living in the house as a sole residence. Either freeze the property tax or allow it to rise a small amount every year. When the house is sold, the new owner is subject to the full property tax assessment. This has literally been in effect across all of California since the 70s and has done fuckall to curb rents in San Francisco. All it results in is the current situation where property owners simply turn their dwellings into rentals rather than selling, because why not. San Francisco now has roughly a 35% home ownership rate.
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Oct 16, 2014 22:09
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H.P. Hovercraft posted:This has literally been in effect across all of California since the 70s and has done fuckall to curb rents in San Francisco. Yeah, it does make things worse when you freeze property taxes for rich people and not just for poor people. I propose that we freeze property taxes just for poor people when rich people start buying up the neighborhood. Also SF is hosed up because they refuse to allow new housing, not specifically because of Prop 13. Again, because wealthy homeowners looking for subsidies hijacked the protections that should only be used to protect people who can't otherwise afford their homes when markets blast off.
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Oct 16, 2014 22:12
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H.P. Hovercraft posted:This has literally been in effect across all of California since the 70s and has done fuckall to curb rents in San Francisco. Hey, it's 5 points higher than my city 
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Oct 16, 2014 22:13
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Popular Thug Drink posted:Here's how to fix gentrification. Local jurisdictions are already allowed to create tax districts with special property tax rules. When an area is ripe for gentrification, create a tax zone which applies to any property owner who lives in the house or has family living in the house as a sole residence. Either freeze the property tax or allow it to rise a small amount every year. When the house is sold, the new owner is subject to the full property tax assessment. This is what destroyed the state of California's budgets for 40 years. Also, it effectively served as a handout to middle/upper middle class white people (and was supported by them) and did basically nothing for the poor. Basically it's a terrible idea and causes many many more problems than it fixes
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Oct 16, 2014 22:14
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icantfindaname posted:This is what destroyed the state of California's budgets for 40 years. Also, it effectively served as a handout to middle/upper middle class white people (and was supported by them) and did basically nothing for the poor. Prop 13 and a Gentrified Tax District have about as much in common as stabbing and surgery. When my argument is "We should freeze taxes for the poor in some circumstances" you can't rebut that with "But California froze taxes for the rich all over the state and it hosed everything up!"
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Oct 16, 2014 22:15
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tsa posted:Landlords are like anyone else, they need to make a profit from taking risk or there is no point to taking risk. Do you expect your credit cards to not charge you interest? Does your bank give you loans for free? Look at all the silly things Islamic Banking does to get around the restrictions on it- not even god can stop it apparently. Likewise it is trivial to loophole around rent control, hence why it has never worked. Bad analogy. Credit cards, like landlords, often go way beyond simply making profit into actively loving people over as hard as they can, and seldom do either merit my sympathy.
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Oct 16, 2014 22:18
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Popular Thug Drink posted:Yeah, it does make things worse when you freeze property taxes for rich people and not just for poor people. I propose that we freeze property taxes just for poor people when rich people start buying up the neighborhood. Well I propose that all rent-seeking behavior be taxed at significantly higher rates as to encourage home ownership of primary residences instead of treating residential property as an investment. But the likelihood of that happening anytime soon is about the same as my other proposal of dragging every landlord and banker out into the street and hanging them from the nearest pole.
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Oct 16, 2014 22:18
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I feel like lots of the rationale behind rent control is essentially that people shouldn't be forced to leave whatever community they're in. I guess that makes some sense, but it's not like being priced out of San Fransisco or Manhattan means you're off to the favelas. As long as there is housing of an acceptable standard, I don't really see the need for any kind of rent control. Public housing, or publicly subsidized rent (at market rates) makes sense IMO, but not price controls.
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Oct 16, 2014 22:19
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Popular Thug Drink posted:Prop 13 and a Gentrified Tax District have about as much in common as stabbing and surgery. When my argument is "We should freeze taxes for the poor in some circumstances" you can't rebut that with "But California froze taxes for the rich all over the state and it hosed everything up!" They didn't freeze taxes for the rich, they froze taxes for middle class white Republican homeowners (who then became rich because they didn't have to pay any property tax). These things are fundamentally related. The people who will benefit from property tax freezes are not the poor, it's people who own property
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Oct 16, 2014 22:21
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H.P. Hovercraft posted:Well I propose that all rent-seeking behavior be taxed at significantly higher rates as to encourage home ownership of primary residences instead of treating residential property as an investment. Conversely, cities create special tax districts all the time and freezing your revenue at a current level for some people as a subsidy doesn't cost you any extra, you're only foregoing future income. A healthy number of cities do this exact thing to fund infrastructure. icantfindaname posted:They didn't freeze taxes for the rich, they froze taxes for middle class white Republican homeowners (who then became rich because they didn't have to pay any property tax). These things are fundamentally related. The people who will benefit from property tax freezes are not the poor, it's people who own property Hence why I said in my post (please read my post) that we subsidize homeowners who live in the home as a primary residence, or have family who live in the home (uncle's house might be in grandma's name).
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Oct 16, 2014 22:21
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