To me rent control seems just one step removed from a legislature declaring an end to scarcity. It's just a statement - a grunt, even.

quote:

Originally posted by jon-nyc:
To me rent control seems just one step removed from a legislature declaring an end to scarcity. It's just a statement - a grunt, even.

jon-nyc, what do you propose as a solution to the problem of tenants, deeply-rooted in their communities, being forced out of their homes over sky-high rent increases? Leaving things alone is not a solution. If rent-control is not always a solution, what is?

More building. #yimbyism.

Rent control makes the problem worse overall, especially in the long run.


The real problem is scarcity. And the answer is to build more.


Of course the problem is current residents never want higher density. But they need to understand that by making that choice they are responsible for higher housing costs. It’s a choice.

quote:

Originally posted by jon-nyc:
The real problem is scarcity. And the answer is to build more.

I don't understand that. Take my old neighborhoods of Williamsburg and Greenpoint. There's a ton of new construction ("luxury" dontcha know) and guess what? It's all unaffordable. So your smaller landlords see that there's a line of people waiting to move into the neighborhood, so the value of their apartments skyrockets forcing people out. It isn't only the value of new construction that skyrockets. Without some protection for existing renters, the scenario is one of doom. I've seen it happen over and over, and to some very close friends.

quote:

Originally posted by jon-nyc:
More building. #yimbyism.

Rent control makes the problem worse overall, especially in the long run.


The real problem is scarcity. And the answer is to build more.


Of course the problem is current residents never want higher density. But they need to understand that by making that choice they are responsible for higher housing costs. It’s a choice.

Rent control isn't just about affordability, although that's certainly part of the equation. Rent control is also the human desire to stay put. People are emotionally invested in their homes.

So, even if you could move to a new place that would be more affordable, many people are reluctant to do so. They know their neighborhood, they've organized things the way they want them, they are part of a community and have services and service providers that they are used to. Moving requires a massive change.

So, rent control is also about satisfying the human desire to stay put, and not to be thrown out on the street and forced to undergo those changes because of a rapidly changing housing market. This obviously affects renters very differently than owners (who can only be forced out for failure to pay the mortgage/property taxes or by use of eminent domain).

And, as an aside, that also explains why people have such an emotional reaction to increasing property taxes.

I tend to agree with Jon--the issue is supply v demand. "Build more" involves building a lot more, and building at multiple cost points. But most builders do not support this. They can make a ton of money building luxury apartments/condos and it's against their best interests to build at lower profit margins or build enough to make a dent in the supply-demand equation. Around here, all the "affordable" housing has been mandated, and even then the results are sketchy.

quote:

Originally posted by jon-nyc:
The real problem is scarcity. And the answer is to build more.

You'd make a great developer!

Unfortunately, more building is not really an option in densely populated areas:

* There is no more room to build without overtaxing already shaky infrastructure.

* New people want to move in anyway because that is where they can find jobs.

* Existing residents don't want new construction and more people to mess up their own quality of life and they don't want their taxes to go up.

* Families double up in rental units and rents climb because people are willing to do that to be near the jobs.

* You can't build quickly enough to stop this cycle and it's going to be an uphill battle to build at all. Whatever building you do makes all of the infrastructure problems worse.

What's "supposed" to happen is that the cost of living in a city eventually gets so high that businesses decamp for less expensive areas. The problem is that the people who run those businesses don't want to live in less expensive areas and the business stays put. Eventually Toyota moves to Texas and the problem is eased for a while but it comes right back.

Rent control makes the problem worse by making the process take longer - much longer in some cases. It's not all about building either, it's also about the availability of lower cost housing to feed the needs of the local businesses. As long as they can get the labor, businesses stay put.

"Homelessness" has nothing to do with any of this. Truly homeless people generally have more issues than you are going to solve by building, and those issues are very difficult to deal with.

quote:

Originally posted by Nina:
"Build more" involves building a lot more, and building at multiple cost points. But most builders do not support this.

Unless you are building big high-rises, a large percentage of the cost of a project, particularly in urban areas, is land and impact fees. Builders want to build whatever will best offset these costs and provide a profit. Low cost housing doesn't do that, and in fact low cost housing built as low cost housing (no granite counter tops) is a tough sell even in hot markets. People would rather rent something nice than buy something small and simple.

What is "supposed" to happen is that people who live in less expensive housing will move up to the new, more expensive units. The now-vacant low cost units will then, in theory, be available for new low-wage tenants. The reality is somewhat different.

The rising tide (Amazon, for example) doesn't raise all boats but instead raises rents and taxes on people who don't even have a boat. People start screaming at City Council meetings and everyone wants to do "something". That "something" has taken many forms over the years, most of them ineffective and some of them disastrous (see: Pruitt Igoe). Most modern plans include "low cost" units mixed in with the rest of the project, either paid for by the developer or backfilled with taxpayer money.

The results are predictable enough - the low cost units become as valuable as the rest of the units and the owners sell them off as soon as they are able at a tidy profit. It doesn't help that this system is ripe for all manner of shenanigans as far as selecting who gets the low cost units and at what cost.

This problem is not new, as evidenced by the fact there is precious little manufacturing going on in Manhattan. Those businesses moved and were replaced by businesses that can make more money on less land. Manhattan got more crowded and rents went up.

What's ironic about this is that at least some of this "new" problem was caused by the recent "Return to the City" - "New Urbanism" - "Walkable!" movement. Businesses that used to prefer the 'burbs, where housing is less expensive, are moving back to the city centers and driving out the lower cost stuff. These "New Urbanists" are willing to tolerate city conditions to get the jobs, at least until they have kids. Amazon is a prime example of this - they want to be in the city where it's "hip", not some campus in the 'burbs because that is where their workforce wants to live.

quote:

Originally posted by Axtremus:

quote:

Originally posted by piqué:
... shouldn't there also then be property tax control?

That would mean spending control, for states/municipalities that rely on property tax to fund the state/local government, no? What are the major spending line items in your state or municipality, are they discretionary (like education and infrastructure) or mandatory (like pension and bond payment)?

In the case of Missoula, discretionary spending is wildly out of control. For just one example, they decided to build a brand new library, an entirely new building. The current library is the size of a city block and it is excellent, one of the best libraries I have ever used. The city absolutely did not need a new library, but it is part of the empire building that has included a new, minor league baseball stadium, and a brand new elementary school in my neighborhood that is state of the art. The percentage of property taxes that go for public schools in Missoula is astronomical--i don't remember the exact percentage, but it was well over 60 percent of my tax bill. Every year developers come up with some new dream project that we end up paying for. Meanwhile, if the city decides you must have a sidewalk installed in front of your house, you, the homeowner must pay for it to the tune of $10-30K--and it is not optional.

Interesting, Steve. This is what we are seeing in Portland, exacerbated by the urban growth boundary. There is a huge push for urban infill development, but precious little land left to infill. Given that most people want to live in or very close to downtown, new housing (primarily rentals) are all high-density and rents are high. In terms of infrastructure, another Portland oddity--variances for parking are given out routinely. This is primarily to support/encourage people to use public transit, which many (perhaps most) do. But they are not going to ditch their car, and those cars still have to go someplace. So parking becomes another major hassle, as in "a place to put your car," not parking while you're at work or running errands. Lots of folks will use rideshare like lyft, Zipcar, etc., but lots won't.
And they all have large dogs.

quote:

Originally posted by piqué:
In the case of Missoula, discretionary spending is wildly out of control.

Prop 13 style tax codes (which Quirt does not like) help alleviate a lot of this problem. I'm surprised more states have not adopted them.

They ease some of the home affordability problem, too.

quote:

Originally posted by Nina:
Given that most people want to live in or very close to downtown, new housing (primarily rentals) are all high-density and rents are high.

The time-honored fix for this is mass transit, typified by streetcars at first and best illustrated by the NYC subway system. People who work in the city don't have to live there and instead commute in from the 'burbs.

The problem is that these systems are very expensive and never pay for themselves so no one wants to build them any more. Portland has a particular problem in that any new transportation schemes will have to include new bridges.

quote:

Originally posted by Steve Miller:

quote:

Originally posted by piqué:
In the case of Missoula, discretionary spending is wildly out of control.

Prop 13 style tax codes (which Quirt does not like) help alleviate a lot of this problem. I'm surprised more states have not adopted them.

They ease some of the home affordability problem, too.

I don’t like them because they create an imbalance between existing homeowners and new purchasers. It discourages the purchase of real estate by the people who will necessarily bear the brunt of those taxes.

(at least, in a period of rising house prices.)

quote:

Originally posted by QuirtEvans:

quote:

Originally posted by Steve Miller:

quote:

Originally posted by piqué:
In the case of Missoula, discretionary spending is wildly out of control.

Prop 13 style tax codes (which Quirt does not like) help alleviate a lot of this problem. I'm surprised more states have not adopted them.

They ease some of the home affordability problem, too.

I don’t like them because they create an imbalance between existing homeowners and new purchasers. It discourages the purchase of real estate by the people who will necessarily bear the brunt of those taxes.

(at least, in a period of rising house prices.)

True. It's not ideal.

OTOH, people who opt to buy a house do so with the knowledge that they will be paying more than the previous owner and agree to do so. This is different from living in a house for years only to be faced with ever increasing tax bills.

Also, the tax rate is 1% of purchase price and goes up very little each year. That rate is pretty low by national standards, making it one of the few taxes in CA that work out to a fairly good deal.