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Often I see Prop 13 and Rent Control lumped together or as two sides of a coin.
I try to keep them very separate...
For residents of a housing unit, they do the same thing. It doesn't matter why or how they came to be - they both control the housing expenses for an individual.
Whether one is about regulation of a business or the other is about the very nature of taxation as it relates to property...it makes no difference in the context of the conversation where I brought both up.
If you want to have a philosophical debate about the two laws, that's fine - but that's not at all what I'm doing.
At its most basic... Prop 13 took the power away from Government and Rent Control gives power to the Government.
I will not invest anywhere subject to rent control... the units I have were all before rent control came into being... I have families that have been with me since the 1980's
Rent Control is fascinating because it is an artificial control targeted at a very specific subset of providers of residential rental housing.
It adds a layer of bureaucracy with everything that entails... I have never ran afoul of the policies and procedures... I pay my added costs and make darn sure I am always in compliance.
I'm looking out the window right now at a magnificent SF skyline... and it is. That said I can go years without setting foot in the city... it is expensive in just about every way... parking is a problem... especially when I have elderly with me... which is why doing the BART shuffle doesn't work well... most of the elevators are always not in service.
There are people I know that have carved out a niche due to rent control simply because they can...
Almost all of my new tenants over the last 5 or so years are families that have fled SF for Oakland...
I know a very successful Doctor that somehow got a rent controlled apartment years back in a very nice building... he keeps it as his city getaway house and makes it available to friends and family for weekends...
Doc owns a multi million dollar home in Pleasanton... heard him say he will never give up his SF apartment because it is just too good of a deal.
The hard part is how does the owner go about proving this and at what cost?
It's a real sweet deal for those that can pull it off.
Thanks for your comments.
This is the type of situation that you hear about not that uncommonly...maybe not as extreme as this, but certainly some master tenants who have just stayed on a lease despite not even inhabiting the residence anymore just to keep their sweet rent deal going.
Quote:
Originally Posted by HockeyMac18
A tenant can make multiple millions of dollars, but be paying 1970's prices on their apartment. Or they could be someone who has had a stable, but low-paying, job all of those years, and rent control has allowed them to stay put in the area for that long.
I agree that your example shows a way that this system can be gamed - and I don't think that guy should keep the apt if he doesn't live in it. But it's just one example - thousands benefit from it. Just as thousands/millions benefit from prop 13.
Right... this is the thinking behind the policy. I understand that it can be a good thing. I certainly appreciated paying 2009 level rent all the way through 2015 as median rents in SF doubled during that time. I couldn't have stayed in the city as long as I did if it wasn't for that. Many others couldn't be living in the city now without the current renting policies.
But I'm just interested... what affect does rent control have on overall rent prices in the city? You have apartment buildings with half the residents paying a fraction of the rent cost that other residents living in the same building are paying. You hear stories all the time of long term residents that are paying low rents being forced out and evicted... is this because the financials of paying (legal fees and other) to get rid of entrenched tenants has reached that tipping point where it's viable to pay out to evict people?
Again... this is just a discussion for interest... I'm not trying to game the system or evict people on rent control.
I remember reading a article in the SF Chronicle a number of years ago regarding some long term tenants of a rent controlled apartments in SF actually getting permission from the property owner to spend considerable amount of their own money to remodel the apt they have been living in. Obviously tenants who have gone this route are not your average income tenants. The story goes to show how good of a deal it is to some, being a long term tenant in the right building in the right neighborhood that they are willing to spend $$$$ to remodel/update the apt
Rent control is the reason rents are so high. SOOO many renters are sitting tight when they would normally leave and enjoy some other spectrum of life.....
I have several properties, some rent controlled and some not rent controlled. I am super diligent on the rent controlled ones, and way more relaxed on the non rent controlled ones. I actually make more on the rent controlled ones because I have to watch my ass: I ask more to begin with, raise rents more often, and basically just cross every T and dot every I... The ones that aren't rent controlled are easier to deal with.....I dont raise rents because the next owner can do it if he wants..... I am in it for the capital gains, but low rents equal low capital gains....
rents would be lower in general without rent control.
That's just speculation. I think that SF rent control is most likely a drop in the bucket compared to the market factors--both demand and supply side--that are increasing housing costs (in both rental and purchase markets.
The essential question you need to ask, from a macroeconomic perspective, is would the churn in rental units expected w/o rent control impact the supply enough to move equilibrium price compared to the churn existing under SF rent control? The answer is . . . who knows? You could get a little more sophisticated and point out that the tremendous boom in housing prices is going on throughout the Bay Area, in places with and without rent control (and has been more pronounced than the historical SF housing cycle), which suggests that rent control is not the problem.
The problem is not enough construction throughout the region, not enough transportation throughout the region, and a lot of high-paying jobs throughout the region (well, this last one is a good problem to have).
Quote:
Originally Posted by Ultrarunner
Rent Control is a transfer... simple as that.
I know a very successful Doctor that somehow got a rent controlled apartment years back in a very nice building... he keeps it as his city getaway house and makes it available to friends and family for weekends...
Doc owns a multi million dollar home in Pleasanton... heard him say he will never give up his SF apartment because it is just too good of a deal.
The hard part is how does the owner go about proving this and at what cost?
It's a real sweet deal for those that can pull it off.
If the owner knows, it wouldn't be all that hard. If not . . . it sounds like a tree falling in the forest.
Quote:
Originally Posted by Ultrarunner
At its most basic... Prop 13 took the power away from Government and Rent Control gives power to the Government.
I will not invest anywhere subject to rent control... the units I have were all before rent control came into being... I have families that have been with me since the 1980's
Rent Control is fascinating because it is an artificial control targeted at a very specific subset of providers of residential rental housing.
It adds a layer of bureaucracy with everything that entails... I have never ran afoul of the policies and procedures... I pay my added costs and make darn sure I am always in compliance.
I'm looking out the window right now at a magnificent SF skyline... and it is. That said I can go years without setting foot in the city... it is expensive in just about every way... parking is a problem... especially when I have elderly with me... which is why doing the BART shuffle doesn't work well... most of the elevators are always not in service.
There are people I know that have carved out a niche due to rent control simply because they can...
Almost all of my new tenants over the last 5 or so years are families that have fled SF for Oakland...
You only get bureaucracy under rent control when you try to evict/fight eviction. And all told it's not so bad.
If you won't invest in areas with rent control, why not sell your units in SF?
Quote:
Originally Posted by JohnS_15
Thanks for your comments.
This is the type of situation that you hear about not that uncommonly...maybe not as extreme as this, but certainly some master tenants who have just stayed on a lease despite not even inhabiting the residence anymore just to keep their sweet rent deal going.
Right... this is the thinking behind the policy. I understand that it can be a good thing. I certainly appreciated paying 2009 level rent all the way through 2015 as median rents in SF doubled during that time. I couldn't have stayed in the city as long as I did if it wasn't for that. Many others couldn't be living in the city now without the current renting policies.
But I'm just interested... what affect does rent control have on overall rent prices in the city? You have apartment buildings with half the residents paying a fraction of the rent cost that other residents living in the same building are paying. You hear stories all the time of long term residents that are paying low rents being forced out and evicted... is this because the financials of paying (legal fees and other) to get rid of entrenched tenants has reached that tipping point where it's viable to pay out to evict people?
Again... this is just a discussion for interest... I'm not trying to game the system or evict people on rent control.
You could spend a lifetime trying to quantify the impact of rent control on housing costs. It's complicated. The only real world example I've heard of where rent control was removed from a city was Boston--and prices shot up.
Quote:
Originally Posted by tikkasf
I remember reading a article in the SF Chronicle a number of years ago regarding some long term tenants of a rent controlled apartments in SF actually getting permission from the property owner to spend considerable amount of their own money to remodel the apt they have been living in. Obviously tenants who have gone this route are not your average income tenants. The story goes to show how good of a deal it is to some, being a long term tenant in the right building in the right neighborhood that they are willing to spend $$$$ to remodel/update the apt
It's not that uncommon for SF renters to improve/remodel/redecorate in ways that tenants in other places might not. Landlords in SF know they are potentially entering into a long-term contract with their tenants, and vice versa.
I do and did have a lot of Oakland and even Hayward rent controlled units.
All were bought pre rent control and I have slowly been divesting and moving into commercial property...
That said I have families that have been with me since the 1980's... with few exceptions, I don't sell occupied units... the Just Cause Eviction ordinance in Oakland can make selling an occupied property complicated.
That's just speculation. I think that SF rent control is most likely a drop in the bucket compared to the market factors--both demand and supply side--that are increasing housing costs (in both rental and purchase markets.
The essential question you need to ask, from a macroeconomic perspective, is would the churn in rental units expected w/o rent control impact the supply enough to move equilibrium price compared to the churn existing under SF rent control? The answer is . . . who knows? You could get a little more sophisticated and point out that the tremendous boom in housing prices is going on throughout the Bay Area, in places with and without rent control (and has been more pronounced than the historical SF housing cycle), which suggests that rent control is not the problem.
The problem is not enough construction throughout the region, not enough transportation throughout the region, and a lot of high-paying jobs throughout the region (well, this last one is a good problem to have).
This is a good point. Seems like it's a vicious cycle with this kind of thing... too expensive to move up to a bigger apartment or out of a starter home so people just stay put... restricts available inventory which just drives prices higher and higher. And that's not just a bay area problem that seems to be a problem in many places in California rent controlled or not.
And I agree with you on the list of problems -- or at least major causes of the high housing prices.
This is a good point. Seems like it's a vicious cycle with this kind of thing... too expensive to move up to a bigger apartment or out of a starter home so people just stay put... restricts available inventory which just drives prices higher and higher. And that's not just a bay area problem that seems to be a problem in many places in California rent controlled or not.
And I agree with you on the list of problems -- or at least major causes of the high housing prices.
I think I agree with TheCityTheBridge in that there are economical factors other than rent control that put significantly more pressure on rent prices.
It's certainly possible that rent control doesn't help (yes, I've read the countless SFGate commenter statements about how they're holding their home off the market becasue of terrible rent control stories, etc.) - but the idea that doing away with rent control would lead to a decrease in rental prices is probably very much bunk. The biggest contributor right now to the insane situation in the housing market is very much low supply (i.e. what happens when you build basically nothing in a region over many decades).
As TheCityTheBridge states - just look at the many cities in the Bay Area that don't have rent control - it's not as if these palces are bastions of affordability. It's very clearly a regional supply issue (i.e. more demand than there is supply).
If you got rid of rent control, all that would probably happen is that the people living in those units would have to move out (because they can't afford it) and the landlords would subsequently get a bigger check each month. I have little doubt that rent prices at a market level would not be affected. Great for the landlords, I suppose.
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