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Just for fun, I looked up the cost of studio apartments in SF. $3,000. Some $4K. Holy cow. I understand many in the area work for Google, Apple, Facebook, etc. and can probably pay that without too much strain. But how the heck do teachers, police officers, and social workers live? I imagine they must face a choice of paying a huge percentage of their salary towards housing and scrimping and saving on everything else or living out in the boondocks where it's more affordable and dealing with a miserable commute?
And if I may offer one more unsolicited view...... Many in this country resent the poor on the grounds that they make them poorer through all the tax supported services and benefits they receive. But do as many people resent the rich for making them poor? Rich people cause real estate prices to skyrocket for everyone else. They even cause the price of groceries, concert tickets, basketball tickets to rise. (I read the Warriors now make season ticket holders pay a rental fee on the seat AND pay for the seat. Good luck with that if you don't work for Apple).
Rich and poor alike take money out of the pocket of the middle class. Neither do it intentionally exactly, but both do it.
The sf Bay Area embraces the idea of meritocracy more than other parts of the country.
Should someone who has an ph.d in computer science or physics from MIT or Stanford or someone with an MBA from Harvard , Wharton or London business school earn a lot of money?
The high levels of academic attainment in the area means more people understand the talent effort and achievement required to get these credentials and land those positions
I'm a public librarian here with a middle-class salary, and I certainly don't pay $3000/mo for my place! Maybe the CITY (SF) is averaging that now, but the suburbs can be quite a bit less... it's still not cheap, mind you, as I currently pay $2100/mo for a 1br duplex in the South Bay. That averages out to around 40% of my take-home salary (gross is approx $84K), which is tough but doable if you're not extravagant with non-housing expenses. And for those who can't afford that on their own, sharing with roommates or living with family members is how they survive. I like living alone, though, which is why I'm willing to allot more of my budget to housing.
Oh, and to answer your other question, I don't resent anyone personally for anything - except maybe the greedy landlords (and property owners), who figure "if they're willing to pay xxxx maybe I'll raise rents even more?" But eventually they hit a ceiling, as evidenced by the slight drop in prices over the last couple of years. I was apartment-hunting about 2 years ago, and one leasing agent said he'd never seen so many vacancies! He recommended holding off a few months, as rents were inevitably going down, but unfortunately I had a strict move-date.
As for the individuals, they're all just doing their thing like the rest of us. I can't blame anyone for earning a good salary, just as I can't blame anyone for being poor. And for those who do, I say "then YOU become rich/poor if you think it's that easy." I mean, if I wanted to be a Google engineer or something, I would have gone that route in school. But I love what I do, and knew going into the profession/degrees that it wasn't high-paying. So it's a trade-off, I suppose.
I'm a public librarian here with a middle-class salary, and I certainly don't pay $3000/mo for my place! Maybe the CITY (SF) is averaging that now, but the suburbs can be quite a bit less... it's still not cheap, mind you, as I currently pay $2100/mo for a 1br duplex in the South Bay. That averages out to around 40% of my take-home salary (gross is approx $84K), which is tough but doable if you're not extravagant with non-housing expenses. And for those who can't afford that on their own, sharing with roommates or living with family members is how they survive. I like living alone, though, which is why I'm willing to allot more of my budget to housing.
Oh, and to answer your other question, I don't resent anyone personally for anything - except maybe the greedy landlords (and property owners), who figure "if they're willing to pay xxxx maybe I'll raise rents even more?" But eventually they hit a ceiling, as evidenced by the slight drop in prices over the last couple of years. I was apartment-hunting about 2 years ago, and one leasing agent said he'd never seen so many vacancies! He recommended holding off a few months, as rents were inevitably going down, but unfortunately I had a strict move-date.
As for the individuals, they're all just doing their thing like the rest of us. I can't blame anyone for earning a good salary, just as I can't blame anyone for being poor. And for those who do, I say "then YOU become rich/poor if you think it's that easy." I mean, if I wanted to be a Google engineer or something, I would have gone that route in school. But I love what I do, and knew going into the profession/degrees that it wasn't high-paying. So it's a trade-off, I suppose.
Interesting concept on the landlords. What exactly should they charge you for you to feel they're not greedy? Should the landlord be able to recover his mortgage, insurance, and property tax? Is it wrong to make any kind of profit at all, or should they just break even for your benefit? Is the government greedy for charging the property tax, which requires the landlord to pass it on to you just to break even? Should the landlord charge you below market knowing he will be restricted on increases by the rent board in San Francisco once he is locked in on that price? I think the last article I read on the topic said that only 58% of landlords actually show a profit.
The sf Bay Area embraces the idea of meritocracy more than other parts of the country.
Should someone who has an ph.d in computer science or physics from MIT or Stanford or someone with an MBA from Harvard , Wharton or London business school earn a lot of money?
The high levels of academic attainment in the area means more people understand the talent effort and achievement required to get these credentials and land those positions
Yes they should make a lot of money. But should there be better rent control? When there is a "charge what the market will bear" laizes faire capitalism approach, price gouging may take place in real estate.
Physicists: they should make a ton of dough. Landlords? I'm not so sure. Physicists contribute to the overall betterment of society. Landlords......I'm sorry but they often seem to have a parasitic relationship to the rest of society.
Yes they should make a lot of money. But should there be better rent control? When there is a "charge what the market will bear" laizes faire capitalism approach, price gouging may take place in real estate.
Physicists: they should make a ton of dough. Landlords? I'm not so sure. Physicists contribute to the overall betterment of society. Landlords......I'm sorry but they often seem to have a parasitic relationship to the rest of society.
How can one claim price gouging when a collective agreement among owners isn't in place?
Yes they should make a lot of money. But should there be better rent control? When there is a "charge what the market will bear" laizes faire capitalism approach, price gouging may take place in real estate.
We both know that rent control is actually a more significant factor in the rents being as high as they are than landlords being greedy. Increased rent is often there to make up for losses from rent controlled tenants as well as there being an artificial shortage in supply. Deny it all you want. You can join the people who deny that the dramatic increased minimum wage hasnt increased the cost of a sandwich from $8 a couple years ago to over $14 now.
Yes they should make a lot of money. But should there be better rent control? When there is a "charge what the market will bear" laizes faire capitalism approach, price gouging may take place in real estate.
Physicists: they should make a ton of dough. Landlords? I'm not so sure. Physicists contribute to the overall betterment of society. Landlords......I'm sorry but they often seem to have a parasitic relationship to the rest of society.
You cannot legislate supply and demand.if the rent control legislation is too onerous landlords will take their rentals off the market or go the airbnb route. The situation right now is that 20% of units in Sf are vacant. The appreciation rate on property is so high that you can build up $100000+ A year in equity and prop 13 limits your tax hit. You can get a decent return and not have to deal with tenants
You also have families with children stuck in 1 bedroom because they can't afford market rates or people staying in units for decades and paying $200 a month and the landlord has to charge new tenants $3000+ to balance the rent controlled units
And if there are a lot of maintenance and upkeep issues electrical,plumbing,roofs windows and painting who pays for this? Is $200 a month going to pay for a new Roof and plumbing?
Interesting concept on the landlords. What exactly should they charge you for you to feel they're not greedy? Should the landlord be able to recover his mortgage, insurance, and property tax? Is it wrong to make any kind of profit at all, or should they just break even for your benefit? Is the government greedy for charging the property tax, which requires the landlord to pass it on to you just to break even? Should the landlord charge you below market knowing he will be restricted on increases by the rent board in San Francisco once he is locked in on that price? I think the last article I read on the topic said that only 58% of landlords actually show a profit.
I think the market answered these questions for you, as there was a noticeable DROP in rents about 2 years ago, after they raised prices too high to keep units occupied. The few years prior to that saw the biggest increase of our times, which had to have been driven somewhat by greed... I'm pretty sure the tax and mortgage rates are fixed here, so what other reason did they have to go from $1300ish to $2500+ (average rents) in under 5 years?? The large complexes especially have no excuse, since I assume it's not just one property owner dealing with increasing taxes or costs. Right?
My unit is part of a four-plex owned by one person, and he's managed to keep our rents at a "reasonable" rate. As I said, I pay $2100/mo for my place, which is about 800sf with a nice-sized backyard... he is also VERY pet friendly, with no restrictions or added charges/deposits, which is a rarity around here. Apparently these things aren't impossible, though! And yes, of course they should charge enough to cover their own costs (and hopefully make at least a small profit). But does that require charging $3000-4000/mo for a studio? If so, I'd say they overpaid or got into the market at a bad time.
I think the market answered these questions for you, as there was a noticeable DROP in rents about 2 years ago, after they raised prices too high to keep units occupied. The few years prior to that saw the biggest increase of our times, which had to have been driven somewhat by greed... I'm pretty sure the tax and mortgage rates are fixed here, so what other reason did they have to go from $1300ish to $2500+ (average rents) in under 5 years?? The large complexes especially have no excuse, since I assume it's not just one property owner dealing with increasing taxes or costs. Right?
My unit is part of a four-plex owned by one person, and he's managed to keep our rents at a "reasonable" rate. As I said, I pay $2100/mo for my place, which is about 800sf with a nice-sized backyard... he is also VERY pet friendly, with no restrictions or added charges/deposits, which is a rarity around here. Apparently these things aren't impossible, though! And yes, of course they should charge enough to cover their own costs (and hopefully make at least a small profit). But does that require charging $3000-4000/mo for a studio? If so, I'd say they overpaid or got into the market at a bad time.
I can't say I'm aware of where you're getting your numbers from but my understanding is the biggest jump over the last 4 years was in Santa Clara at 20% (hardly an increase of close to 100% as you claim with a jump from $1300 to $2500). Without knowing if someone has a fixed or adjustable mortgage, I can't say if they have a fixed interest rate. The property tax of course is limited to small increases based on voter approved issues and determined by the basis of the unit. And of course, it would depend on when someone bought to determine if $3k or $4k is excessive. And if they did overpay, I imagine they would still try to recoup their cost. And you as a tenant have the opportunity to balk at that and refuse to pay it and find something that is more to your liking on price. Clearly in your case, you're not talking about San Francisco with it's rent control which would throw another whole dimension on what a landlord would want to charge. It is not greed to expect to get the market value on a unit. Landlord do after all, own property to make a profit (and there is no reason to think otherwise or expect someone to charge below market out of the goodness of their heart). The notion of greed you describe is misplaced as it is merely driven by willing renters. The thought that a landlord can simply charge as much as they want and readily occupy a unit is simply incorrect. In addition, I hardly think if a landlord was taking a loss because he was unable to rent a unit above market price, you wouldn't (out of the goodness of your heart), offer to pay the difference to make him whole. I'm often baffled by the fact that people that are risk takers are often called greedy by those with no skin in the game.
Although the SF Housing situation couldn't be considered a true capitalistic system in play (San Jose certainly has less restrictive measures), one of my favorite pieces on "greed" is this one....
Last edited by JJonesIII; 05-13-2018 at 05:08 PM..
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