Is Your Rent Through the Roof? Oregon Wants to Fix That
https://nyti.ms/2Nt7ZDY

quote:

In an effort to halt runaway housing costs and curtail evictions, Oregon is expected this week to become the first state in the nation to cap how much landlords can raise rents. As early as Monday, the State House of Representatives is likely to pass rent control legislation that has already been approved by the State Senate. Gov. Kate Brown, a Democrat, has said she would sign it.

Portland has its own unique problems. It is definitely getting swept up in the general property speculation that is occurring up and down the west coast, from Vancouver BC to San Diego. But we also have a growth boundary which greatly limits the amount of land available for new buildings. There have been new "affordable" apartments built, but then they are priced at today's market which, even at the low end, is expensive.
Portland's homelessness crisis is real, but not influenced by housing costs to the extent that the article implies.
We also have no sales tax, which means that the city needs to find revenue from other places. Property taxes are one of the key revenue streams, and that increase in taxes (which occurs virtually every year) gets passed on to renters. Our property taxes have increase more than 7% per year, which is the cap for this legislation (plus the CPIU add-in which, I admit, I don't understand. BLS has stopped providing CPIU for the Portland metro area.)
And there is most definitely a vocal crowd of people who feel that, because they paid $400 for a 2 bedroom apartment in 2000, they shouldn't be paying much more than that 18 years later. That's not realistic, either.

Not sure if rent control is the answer. I honestly don't know. There have been stories of people who were informed that their rent was being doubled with their next lease. That's obscene, and the rent controls would address that. But it seems like it would also have the consequence of fewer rentals, fewer companies feeling they can make a reasonable profit. And so the cycle continues.
They also don't mention short-term rentals (airbnb's), which are "regulated" here in Portland but those regulations are never enforced as far as I can tell.
There's no easy answer.

It’s the same in most of the urbanized areas of the country. Government policies collectively act to subsidize demand while restricting supply.

Maybe we should try to do less of that.


#yimby

Does NYC still have rent control?

Yes, though the number of affected units has been declining most years.

How does that work?

If the rent gets high enough, it falls out of rent stabilized status. That seems counterintuitive, but the idea behind it is that rent stabilization was for the lower end of the market. No one was trying to make sure the guy in the penthouse doesn’t get big rent increases.

So rent stabilized units are allowed to raise rents tiny amounts per year, larger amounts if they make capital investments. Over long periods of time (and our stabilization program is almost 80 years old) those rents creep up to and exceed the threshold.

When I was a renter that threshold was 2k/mo. It might have increased, I don’t know.

The other way a place comes off the stabilization rolls is if the owner takes it over for his own use. Normal scenario is a townhouse with owners living on top floors and the ground floor is a rental unit. Someone buys the house with the intention of renovating it and turning it into a single family home.

Michael Munger pointed out that the consensus against rent control among economists is probably as high as any you’ll find among climate scientists for any particular policy.

Yet nobody calls this an anti-science move. How do we fix that?

quote:

Originally posted by jon-nyc:
Michael Munger pointed out that the consensus against rent control among economists is probably as high as any you’ll find among climate scientists for any particular policy.

Yet nobody calls this an anti-science move. How do we fix that?

I don't think I'd call economics scientific.

Looks like the Oregon ordinance is a little different from other ones I've seen.

Oregon Becomes the First State to Enact Statewide Rent Control

quote:

The new law states that landlords may only increase rents by 7% annually in addition to the change in the Consumer Price Index, which measures inflation.

So maybe 8-9% per year. More in inflationary years. That's not much of a restriction, especially when you consider:

quote:

Residents of Portland have been hit the hardest; their rents have skyrocketed by 30% since 2011, according to The New York Times.

Which is nowhere near 8% per year.

OTOH there is this:

quote:

The bill also offers new protections against eviction by prohibiting no-cause evictions after the first year of residency.

Which might be OK, depending on how they define/administer "no cause", but may make it impossible to tear down old units to build new ones.

I can't find how the Portland law deals with "vacancy decontrol" (allowing the landlord to raise the rents to market if the unit goes vacant) or if the ordinance includes new construction.

quote:

Originally posted by Bernard:

quote:

Originally posted by jon-nyc:
Michael Munger pointed out that the consensus against rent control among economists is probably as high as any you’ll find among climate scientists for any particular policy.

Yet nobody calls this an anti-science move. How do we fix that?

I don't think I'd call economics scientific.

Wow. Both as a statement and for the disrespect to a fellow board member.

nina, we have a similar situation in montana: no sales tax, and property taxes go up and up and up. i just had to increase the rent on my missoula house because the property taxes went up so much in that town.

it sounds like oregon needed something like this, but shouldn't there also then be property tax control?

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)?

They aren't trying to protect homeowners. That would be the California model (Prop 13). They are trying to protect non-owners.

quote:

Originally posted by QuirtEvans:

quote:

Originally posted by Bernard:

quote:

Originally posted by jon-nyc:
Michael Munger pointed out that the consensus against rent control among economists is probably as high as any you’ll find among climate scientists for any particular policy.

Yet nobody calls this an anti-science move. How do we fix that?

I don't think I'd call economics scientific.

Wow. Both as a statement and for the disrespect to a fellow board member.

There is nothing disrespectful about it at all. It's simply a fact. I respect people who study economics, but it is not science in the same respect as physics (at least until you get to really wild theoretical stuff). At best economics is a social science. Economics, especially macro economics, always requires qualitative judgements.