Effects of AB1482 (rent control) already being felt (foreclose, house)

[bad debt]

Originally Posted by 2sleepy

So if the bolded claim is true, why are apartments being built in a state like Nevada that has a split roll tax?

I would like to see how some people answer this question. Even more drastic than Nevada is Texas which has significantly higher property than California.

[expatCA]

Originally Posted by 2sleepy

So if the bolded claim is true, why are apartments being built in a state like Nevada that has a split roll tax?

Nothing to do with rent control.



In NV they just charge what they need to to cover all costs and make a profit.

[2sleepy]

Originally Posted by expatCA

Nothing to do with rent control.
In NV they just charge what they need to to cover all costs and make a profit.

This is what I was responding to

Originally Posted by Des-Lab

Government tampering with free markets. What could possibly go wrong there? Not to mention that this will effectively kill all new construction of apartments. No builder....anywhere in the world....will touch this if they know ahead of time that any profit motive has already been outlawed.

[expatCA]

Originally Posted by 2sleepy

This is what I was responding to

Ahh, however it still applies as profit fro rent is based on cost and how much difference between that and the rent that can be charged. NV has a split tax role, but also no State income tax, so COL of living is still less so rent can be still profitable.

[ClydeAJones]

Originally Posted by Electrician4you

I did. I told you that EVERY rent control LL I know raised their rates the maximum allowed every year. I know about 12 of them. They had no reason not to raise their rates. When a guy is paying 800 for a rent controlled apartment in Santa Monica that would rent for 3500 today the LL has no problem raising rent 3%. They would be dancing if they were getting rid of that rent control tenant.

Huh? Even in a bad market rents go up. I don’t know one LL that did not raise rents even in the bubble days. I raised rents in the 09-14 range. If 2000-2010 was so bad why did rent rates go up 12% in that time? Btw I raised my rates in the 2008-2014 because the demand was there. All those people who lost houses had to live somewhere.

I never said rents have nothing to do with economic conditions or market rate but it’s not always true. . In the crash it didn’t matter because people still needed noises and they were paying exorbitant prices and the economy was in the crapper. What I said is rent control LL raise rents regardless of market conditions because they aren’t losing anything by doing so.

I had a buddy who moved to SF to work there. Making 170k. Rented a place for 3500 and he was lucky to get it. It took him three months to find it. He literally would find a place by the time he got there it was rented. The guy also demanded a guarantee letter from his company. The guy flat out told him as he was signing the lease next year rents gonna go up $400 or more. This was in 2010. Smack dab in the crapper economy the dude was charging those prices.

It's simply amazing to me that someone can quote you word for word ("I guarantee you no rent control LL is going to not raise rents to max allowed raise.") and you still deny you made the comment and continue to backpedal. No sorry, rents do indeed go down or stay flat depending of the market and economic conditions. They certainly weren't going up 5+% after the financial crisis (even in Southern CA) and in rent controlled areas. I provided a chart of actual rent trends and so did you, and neither backed up your claim.

This new law relates to the entire state, not just Southern California so focusing just on that area is not relevant. And your survey of 12 landlords is not representative of the state or scientifically relevant in any way (nor are your personal anecdotes).

Admittedly, I don't like this new law either or Newsom. But I'm not going to sit here and embellish by making comments that have absolutely no merit whatsoever. This happens way too often on this forum and it's done by a multitude of posters, typically based on political nonsense. Sorry, I have no time for that.

I'm done arguing with you now as it's clearly a waste of time (especially since you're denying a word-for-word quote).

Have a good day.

[Electrician4you]

Originally Posted by ClydeAJones

It's simply amazing to me that someone can quote you word for word ("I guarantee you no rent control LL is going to not raise rents to max allowed raise.") and you still deny you made the comment and continue to backpedal. No sorry, rents do indeed go down or stay flat depending of the market and economic conditions. They certainly weren't going up 5+% after the financial crisis (even in Southern CA) and in rent controlled areas. I provided a chart of actual rent trends and so did you, and neither backed up your claim.

This new law relates to the entire state, not just Southern California so focusing just on that area is not relevant. And your survey of 12 landlords is not representative of the state or scientifically relevant in any way (nor are your personal anecdotes).

Admittedly, I don't like this new law either or Newsom. But I'm not going to sit here and embellish by making comments that have absolutely no merit whatsoever. This happens way too often on this forum and it's done by a multitude of posters, typically based on political nonsense. Sorry, I have no time for that.

I'm done arguing with you now as it's clearly a waste of time (especially since you're denying a word-for-word quote).

Have a good day.

And I’m amazed you're that dense. I have repeatedly stated RENT CONTROL LANDLORDS RAISE RENT REGARDLESS OF ECONOMIC STANDINGS. THEY HAVE NOTHING TO LOSE BY KICKING OUT LOW PAYING TENANTS AND GETTIG HIGHER PAYING TENANTS IN THE BUILDING.

IS THAT CLEAR ENOUGH FOR YOU. I have never backpedaled from that statement. Now private LL may or may not raise rents. I know I did. You obviously didn’t. Just because you don’t raise rents doesn’t mean anything.

Right now cities are enacting or starting to enact moratoriums freezing the LL from raising rates before this law goes in effect. Yet you stand here saying landlords don’t raise rents. In the areas my rentals occupy rents have gone up 10% a year for the last 5 years. Yet you stand here sayignlandlords don’t raise rent.


I don’t care about the law either. And I’m exempt from the law. But I dont care about Newsom either.

You have a good day also.

[bad debt]

Originally Posted by expatCA

In NV they just charge what they need to to cover all costs and make a profit.

That's what landlords and developers will do everywhere. New York has city income taxes (in addition to state and federal), but there's new buildings going up all the time.

The two metrics developers zero in on are yield on cost and development spread. These metrics are both based on pretax figures so income taxes have zero effect and since a standard proforma is based off year 1 returns Prop 13 actually has no impact either.

Now, the passage of these laws may push up the required development spread due to increased political risk that investors don't like. Investors like stability and predictability. The governor signing these new laws to unilaterally change the business model is the actual problem. Because who's to say he won't do it again in 12 months from now or 60 months from now? The less investors can quantify their cash flow, the higher return they require. Just compare it to a bond or a loan. A company, municipality, or person that is on the rocks financially will have to a higher rate compared to one that is financially sound with durable income.

[bad debt]

Originally Posted by expatCA

Nothing to do with rent control.



In NV they just charge what they need to to cover all costs and make a profit.

That's what landlords and developers will do everywhere. New York has city income taxes (in addition to state and federal), but there's new buildings going up all the time. Financial costs can be easily quantified. It's zoning and the approval process that really stops development here in California.

The two metrics developers zero in on are yield on cost and development spread. These metrics are both based on pretax figures so income taxes have zero effect and since a standard proforma is based off year 1 returns Prop 13 actually has no impact either.

Now, the passage of these laws may push up the required development spread due to increased political risk that investors don't like. Investors like stability and predictability. The governor signing these new laws to unilaterally change the business model is the actual problem. Because who's to say he won't do it again in 12 months from now or 60 months from now? The less investors can quantify their cash flow, the higher return they require. Just compare it to a bond or a loan. A company, municipality, or person that is on the rocks financially will have to a higher rate compared to one that is financially sound with durable income.

[expatCA]

Originally Posted by bad debt

That's what landlords and developers will do everywhere. New York has city income taxes (in addition to state and federal), but there's new buildings going up all the time. Financial costs can be easily quantified. It's zoning and the approval process that really stops development here in California.

The two metrics developers zero in on are yield on cost and development spread. These metrics are both based on pretax figures so income taxes have zero effect and since a standard proforma is based off year 1 returns Prop 13 actually has no impact either.

Now, the passage of these laws may push up the required development spread due to increased political risk that investors don't like. Investors like stability and predictability. The governor signing these new laws to unilaterally change the business model is the actual problem. Because who's to say he won't do it again in 12 months from now or 60 months from now? The less investors can quantify their cash flow, the higher return they require. Just compare it to a bond or a loan. A company, municipality, or person that is on the rocks financially will have to a higher rate compared to one that is financially sound with durable income.

Correct. The new law has in effect destabilized a portion of the rent market.



Now zoning in certain areas should stay as it is. Some areas could change for sure, like near rail and bus lines. But changing the zoning in the middle of say Laguna Beach would be stupid. That would just put more cars on the same roads making congestion worse. Plus those who like to live IN a city center where they can walk to work, shopping, restaurants and bars are NOT the majority of the population, so have no right to force such building to occur everywhere.


Prop 13 is such a good law because the people passed it, not politicians.

[JGC97]

It seems that AB1482 is definitely having negative effects in the rental world. Just the other night, KCRA3 reported a story about residents (mostly older retired) in Sacramento are receiving letters of rental rate increases, come the first of the year. Landlords are rushing to make sure they can either secure higher rent prices or remove lower income people from their rentals.

Of course, did anyone think AB1482 would truly help renters? Yeah, me neither.

People who own income property don't want to be told when or if they can raise rent. Most of them aren't money grubbing slum lords but passing another law telling them they can't do this or can't do that is just more government regulation.

'Course, it doesn't surprise me. This is what voters wanted when they elected this governor. Good luck with that.