Ridiculous! The reverse is true. Tenants subsidize their landlords. Who writes WHO a check every month to pay for their mortgages, put their kids through school, etc. A little thanks is due rather than your contempt.

The SF population has turned over very fast in the last 15 or so years. It's hard to find anyone who has been here for any length of time, let alone the three-decades tenant with a mythical $300 rent.

There are a lot of property owners who rent out under the table to corporations for contract workers, and the "hotelization" of units on vacation sites like airbnb.com are very popular.

Don't forget property taxes (which an owner can partly pass on), but above all the large expenses that go into upkeep. Permitted rent increases do not even begin to cover these, especially after five to ten years.

Exactly! If the government wants to subsidize rent for certain people, for whatever reason, let them give them housing vouchers. Not steal from property owners by forcing them to subsidize rents.

No problem because once Fannie and Freddie are finally abolished real estate will become affordable again and we won't need rent control.

Housing or shelter is a fundamental human necessity, and it is linked to other necessities like work or career. Family and other network ties also secure one's location in life, a location tied in varying degrees of tightness to that shelter. Therefore residence is not just an apartment, but often one's life.

LawSci's post implies that forcing people out from long term rental homes to maximize an owner's unearned profit is a good thing, the "good" being that home owners should be able to fully cash in on rising asset prices. Such "profit evictions" are inherently a moral and ethical offense against both wealthy and poor, but clearly much more so for the poor and vulnerable.

When discussing fundamental human necessity, there's no moral equivalence between the denial of surplus profit and denial of shelter. None. Since the wealthy do not have to give up residence nor shelter by giving up rent-controlled units, since wealth by definition means the ability to afford equivalent alternatives in the neighborhood of their residence, the ethical offense is much less. And perhaps none at all. So the article is correct to target the wealthy as being less deserving of rent-control.

The problem of rent-control is that it doesn't target the vulnerable consistently, trying to create lists of the vulnerable deserving of protection. The most vulnerable, the poor, who would have no where to live except in homelessness as a consequence of a profit eviction, are not specifically protected, for example. Rent-control also becomes unfair when its rule is applied inconsistently to landlords within a region.

But in itself, rent control is no more "theft" than income mitigation in any income negotiation. All income is negotiated, even unearned income, and whether negotiation on such comes in from the front end or back end is not particular relevant. Since the passive asset growth implicitly in question is not even earned income, involving no contribution to real productivity, it is particularly absurd to lable what is essentially a profit-sharing rule as "theft".

Moreover, there is a fundamental economic advantage of rent-control as well. One of the prominent lessons of the housing bubble and ensuing financial crisis was that money is better spent investing in real industry, not assets. Any law discouraging weatlh generation from asset growth is a good thing. Therefore any law diluting the profit from escalating housing valuation is a good thing. And therefore, not only is rent-control a good thing, but I would even suggest that state and local governments should also tax multiple property ownership in other ways to further discourage such "investment".

However distasteful your co-worker is, and definitely sounds like he is, he is only taking advantage of a system that has been made possible by government engineering yet again.

That practice is illegal.

Master Tenants are required to charge "proportionately" for rent to sub-tenants. They're also required to report the total rent to the subtenant in the lease. You could contact the SF Tenant's Union and see if there's anything to do, but really it would be the subtenants who would have to act.

SF Rent Board says there's nothing anyone but the subtenant can do. And its up to the tenant to tell them what rent they are paying. My tenant has done this. I found out when I saw her ad on Craigslist.

Yes! Let's motivate lazy people to get everything for free!

Eric, I will assume for argument sake you work for a living. If that is true I want half of what you earn. I feel I am entitled to have what you have just because I live in a very expensive city and I need it. See I don't work because I chose not to because it's my right. I know in my heart you'll be happy to give me what I need just because I need it to help with my lifestyle. Because my lifestyle is my right and not my privilege.

I will be in touch soon with my direct deposit info so you can begin making those deposits into my bank account. I really appreciate you helping me to live my dream of living in the second most expensive city in the nation.

Together we can help make social engineering in SF a reality.

With Kind Regards,

C. Marx

Please explain to me how your juvenile and narcissistic little response which harkens all the way back to the red scare era in its right wing naivete, disproves that vacancy rent control would stop property owners from jacking up rents on the middle class...

Also explain how the idea that rich assholes shouldn't be able to charge people a profit for a place to live, is communist...

You know. A new century began 12 years ago. A century in which we no longer childishly view economic issues as some illusory war between communism and 'free' markets.

By all means leave the 20th century as soon as you can and join us in the new one.

You are a neanderthalic throwback, and a majority of the people in this country now recognize that cold fact about you. And they are angry.

If you do not want to wind up on the receiving end of a new bastille day, I suggest you wise up, and, grow up.

Whatever your smoking would you please share it with me?

Wow, what a wordsmith you are...should I expect your help soon or am I on my own in this cold heartless city. I really want to stay but I am soooo dependent on your largess.

When can I expect the checks to start?

With Kind regards,

C. Marx

Translation: You don't know what you are talking about and don't have an answer to my challenges.

Channeling Barry Goldwater is certainly amusing. But it isn't winning your argument.

Oops.

I forgot.

You don't have an argument.

If it's wrong to profit from having property, isn't it also wrong to profit from having a great set of carpentry tools? How about profiting from a good education, or from outstanding physical skills?

And what is excessive profit? Is it enough money to buy a jet? A new car? A second sweater? A cup of coffee made by someone else?

Eric, if you thought about these things a little more you'd realize that you should be signing your name as American Voter signed his. He's right.

You have of course, ignored the blatantly obvious fact that none of the other realms of profit making that you mention, directly determine whether or not a person is homeless or housed. People don't unequivocally need any of the products from those other professions, whereas housing is an absolute necessity.

Hence, just as with health care and health insurance, no profit making should be allowed in provision of the fundamental necessity of housing; because it gives far too much power over a life necessity to profit seekers.

The fact that you even need to have this fundamentally obvious difference explained to you, can only be elucidated by the observation that you proudly display an internet handle which you got from a cretinous alter ego character in the Beavis and Butthead cartoon.

I find it interesting that you would purposely choose a name so apt to your own level of consciousness...

But what about sex? Who must give their body to me so that I may exercise the fundamental necessity of procreation?

And if that isn't a fundamental necessity (?!), who must be forced to build the housing that I can't pay for? Who must go unpaid when they farm my food?

Before you pee all over your keyboard, I agree that those better off should help those less well off. But the way you frame it leads to avoidable absurdities that wind up doing more harm than good.

Peace, dawg.

Eric, thank you for posting here; everything you said has reinforced by belief that the liberal ideology completely lacks an understanding of economics and how things really work.

It is true that housing is a necessity. Hence, to provide more housing you want people to profit from it. If there is profits to be made from the provision of housing, developers will construct more of it. This is how rents are kept low. Its a simple matter of supply and demand. This equation is totally out of whack due to rent control and has created a housing shortage. Ironically, this is caused by the very law that was supposed to make housing more affordable.

If you take profits out of housing, people will only build dwellings for themselves. Most people lack the capital and resources necessary to singlehandedly pay for their own dwellings in a city such as San Francisco, with high land values. All of those nice new residential structures would not exist if there were no profit involved. And as a property owner, you have every right to charge people to stay on land that you worked hard to obtain. May I remind you that property rights have been fundamental in the development of the US economy, which has provided very high living standards to millions of people.

There is no supply shortage. In San Francisco there are thousands of vacant rental units be held idle by landlords so that they can create an -artificial- housing shortage and charge exorbitant rents.

Your claim about how housing gets built is also false.

In Berkeley during vacancy rent control, the city put more funding into affordable housing construction and that housing was built.

In San Francisco over the past two decades thousands of units of affordable housing have been built through municipal subsidies.

If it were up to private property owners alone, there would not be one affordable unit in San Francisco.

"Overturn the state law that bans vacancy rent control".

Is there a law that bans vacancy rent control? I honestly don't know but it would seem to me that there would have to be a law to enforce such a concept rather than ban it. It seems any landlord that wished to charge according to "vacancy rent control" could very easily do so. If there is a law banning such a thing, the vitriol should be aimed at the politicians that passed such a law.

Yes, There certainly is. Costa Hawkins 1996. It was passed by greedy land owning pieces of garbage like the ones arguing against rent control on this blog, so they could both ream the rest of the populace on rent, and so that they could later accuse rent control of raising rents, and use that argument as a wedge to get rid of rent control completely.

See http://www.sftu.org/costa.html

So based on my understanding of the link above, there was a law in place which enforced vacancy rent control and in effect, this law was repealed with Costa Hawkins.

Not really. The was no state law. Some municipalities simply implemented vacancy rent control as their own local law (but unfortunately for all of us, San Francisco wasn't one of these).

Greed driven property owners got Costa Hawkins passed to make vacancy rent control illegal statewide, thereby enabling them to drive rental prices through the roof everywhere in the state.

Well, I can see how mandated vacancy rent control would not be realistic as that infringes upon ones rights in owning property. That said, I don't think there is any law that bans vacancy rent control, rather, the law simply does not mandate vacancy rent control. There is a major distinction as a landlord is free to practice vacancy rent control if he/she chooses.

The state law passed in 1996 explicitly prohibits municipalities from adopting vacancy rent control. Period.

That law is the source of the problem and of the debate that has taken up 130 messages on this blog thread...

So the ban simply prohibits from forcing something upon property owners. That does not preclude landlords from practicing vacancy rent control if they so choose. Seems like you want the government to tell property owners how they manage their property. Perhaps you might try to find a landlord that believes as you do?

As I've stated before, large property owners shouldn't be able to own other people's housing in the first place.

But, we are left with the reality that they currently are ridiculously allowed to.

Therefore the only immediate solution (beyond mass eminent domain) is to restrict these landlords' ability to raise rents (which of course most of them would never do voluntarily).

Eric - I somehow imagine you don't want to be told what to do or how to live. Nevertheless, you certainly don't seem to mind telling others (i.e. landlords), how they "should" live. Perhaps you might want to do direct your anger and vitriol at the politicians that have created the environment that you so despise. You can be sure that all your local pols have participated in creating this environment. The anger directed as property owners is misdirected as they are generally operating within legal grounds.

This is the irony of the Occupy movements - the anger might better be directed at the politicians who typically enjoy demogoguing the populace into voting them into office. The Occupy people are mad but continue to support those same pols who have created this system - now who is the fool?

When the way one person lives (a landlord) powerfully limits the way others live (tenants - because the landlord sets the terms of how the tenants live in their homes, and how much they pay for their housing) then the landlord is already dictating to others how to live. So it is obvious that landlords must be restricted in their ability to so dictate. That isn't 'telling landlords how they should live' that is simply making sure that landlords don't wield excessive power over other people.

How is it that you are incapable of recognizing such a simple reality?

And the idea that politicians control rich people (rather than the other way around) is fucking hilarious.

What do you mean "the way the landlord lives"???
Who has the ability to restrict the landlords? Answer - the politicians.
Who creates the environment in which we live - the politicians.
The idea that you cannot recognize this is not hilarious, but pathetic and unfortunate.

Are you actually trying to argue with a straight face that 'politicians' have more power over policy than the corporations and elites which those politicians depend on to fund their campaigns? (Corporations which, I might add, often write the laws that you are saying are the realm of 'politicians'.)

Give me a break...

Yes. I don't believe for a moment that corporations do things for altruistic reasons. Nevertheless, the fact remains that politicians and legislators make law and should be held accountable for their votes. Yes, corporations attempt to influence things to their advantage - that is their responsibility to shareholders after all - but the politicians make the final votes.

Eric - IF housing is a right, then it's the GOVERNMENT'S job to provide it with cold, hard cash. NOT property owners responsibility.

I could just as easily say that YOU have a responsibility to house 2 homeless people starting next week. Oh wait, you don't want to? That's the governments responsibility? Yep, that's what I thought.

The difference of course is that I don't own property. And no one else should be able to grab up property and then make others pay to live on it. No one is forcing you to do that. You could make money in myriad, far more ethical ways. So restricting profits that you make off of extorting money from people who have no choice but to give it to you if they want a roof over there head, is perfectly understandable.

Until we have housing as a right, severely restricting your greedy ass is the only option we've got.

You made the bed. You lie in it. With the rise of the Occupy movement, this is only going to get worse for people like you. I suggest you find another line of work.

Not that you actually work of course...

lol, nobody "grabbed up property", they paid for it. and if there is a need for affordable housing, the govt can either build it, or give vouchers for it.

i'm not coming and taking your bike because I need transportation.

your sense of entitlement belongs in a communist country. why don't you ship yourself off to Cuba with the remaining hordes of Americans trying to escape?

Renters are communists which is the reason the federal government owns 90% of the mortgage market in the United States.

http://articles.nydailynews.com/2011-05-31/news/29621643_1_housing-market-freddie-mac-mortgages

"With the government guaranteeing mortgages, home values have become artificially inflated. You may think home prices are attractive, but if the government stopped guaranteeing 90% of all mortgages, they would be lower."

If the gubbment unloaded the 5 trillion plus in mortgages it subsidizes from the taxes of us renters then nearly all housing would suddenly qualify as "affordable."

Eric - one problem with many of your arguments is that you seem to feel entitled to not only have housing provided essentially below market or free, but also in a place of your choosing - which happens to be one of the most expensive markets in the country.

But of course, if housing were free, it wouldn't matter, because there wouldn't be a housing market...

This would provide a massive boost to the real economy, because the -huge- amount of money that we all now waste paying landlords who do nothing whatsoever to earn that money, would instead be spent on real products and services, thereby making all of us better off; and also ensuring that we no longer have to live with the blight of homelessness all around us.

But as we all know, nothing is free. Let me ask this question, if you were to be provided a free home in Muskatine, Iowa, would you take it? Or not only do you feel entitled to a free home, but a free home in a highly desirable and expensive city?

Rather than throw around the word 'free' we should be more precise. Housing should be provided equally to all people at cost of construction and upkeep, with no profit from rent or resale allowed. This would single handedly save most local economies by providing a massive infusion of spending into local markets.

You shouldn't talk about what you don't know about. Property taxes increase every year.

I think Sledgehammer was referring to the fact that Noni Richen pays property taxes based on the value of her property when she bought it thirty years ago, which amounts to a kind of subsidy to Noni.

For property tax purposes, Noni Richen's property tax has not reflected the rise in value of her real estate.

Where do you think the money comes to build and maintain rental properties? It is an investment sometimes held for decades. What did you do to make your 401K grow or other investments? The city did not build the vast majority of rentals, private developers did because they could make a profit.

If the true goal is to have more affordable housing, the city should make it easier and more profitable for developers to build. More supply- lower rent. Yet the same people who opine about high rents also are often anti-development.

I agree that in the this country housing should be a right, but like other rights the burden to support it should be shared by everyone. The costs of health care in SF is shared by all sf taxpayers, not just doctors or hospitals.

Why should a tenant be able to keep essentially the same rent for 20 or 25 years while their salary increases and maintance and repair costs pile up. That and the onerous permitting process create nothing but disincentives for landlords to upgrade buildings.

I am all for housing for all but to lay it only on the landlords is counterproductive and unfair.

The only fair solution would involve scrapping (or greatly adjusting) both rent control and Prop 13. Both policies distort their respective housing markets, reward whoever got there first, and discourage occupants from moving. It's shortsighted to say that "Prop 13 only leads to higher profits if the market is tight" because Prop 13 causes the market to be tight by discouraging long-time homeowners from moving and facing higher property taxes -- just as rent control discourages long-time renters from moving and facing higher rents.

A better argument for this article wouldn't be about rich and poor -- it would be about young and old. In San Francisco, it's the new renters and the new homeowners who are, to a large degree, subsidizing everyone else -- through disproportionately high property taxes (new owners) and disproportionately high rents (new renters).

Will the two of you please explain to me why you haven't suggested the much simpler and more obvious option of adopting vacancy rent control so that property owners can no longer jack up rents to market rates when a tenant moves out?

Vacancy rent control, as I understand it from your post, is neither simple nor obvious. Instead, it's tantamount to having the state set rental rates, punishing owners of older buildings and creating an even bigger incentive to building owners to sell off buildings and condo-convert. With vacancy rent control, landlords have neither the incentive nor the means to make improvements -- slumlords would be the rule, not the exception.

Imagine you owned a building on 18th and Guerrero with a 20-year tenant. That tenant may be paying less than $1,000 a month for a two-bedroom apartment. Now, say that person moves out -- you're proposing that the rent still needs to be $1,000 a month, to a new tenant, when the 2-bedroom next door rents for $4,000 a month? What incentive does the landlord of the cheaper apartment have to make a single improvement to a unit that hasn't been updated in 2 decades? None.

It's a nice idea in concept, but it would create such a disincentive to providing rental housing that I expect you would see a rash of evictions and conversions to TICs and condos.

Nonsense.

The incentives to improve an apartment under vacancy rent control are that:

a) health, safety and building codes -require- apartments to be well kept and safe

and

b) if the landlord fails to improve the property, no one will want to move into it

Making such improvements also increases the value of the rental property itself. Hence, the good old market forces that so many are crowing about on this thread will still provide plenty of incentive to landlords to improve properties; likely more so, because the cushy rents owners are currently allowed to charge (which encourage them to sit on their asses and gouge people for market rates instead of aggressively making property improvements to attract customers from competitors) would no longer be permitted.

"Making such improvements also increases the value of the rental property itself. Hence, the good old market forces that so many are crowing about on this thread will still provide plenty of incentive to landlords to improve properties;"

Not true. The value of the property increase as a result of the rents that are generated - not simple improvements to the property.

Both are true.

To borrow your own phrase from earlier, your points above are simply theory and opinions with no basis in facts.

You are trying to tell me that it is theory that if people did not have to pay rent profits, they would instead be able to spend in their local economies?

Sounds like a fact to me.

I also cited a lot of other facts, like the Costa Hawkins law, and the -fact- that most large scale landlords gouge massive profits from rent and property flipping. These are facts...

No. I am referring to your ascertations above made at 5:19 on the 17th. You claim these would allow market forces to increase the value of the property. This is theory on your part, not fact.

And furthermore, doesn't that money that is paid to rent make it into the local economy anyways?

The more arguments you make, the less is appears you really have any philosophy other than you feel entitled.

Oh, I see. So first, everything I say is theory and therefore dismissible, and now, you are forced to focus on only one of my statements as theory, and to admit that I have put forward plenty of facts in this discussion.

Looks like you just got tangled in one of your own webs of deception.

Market rents are just that - "Market rents". Why should governments intervene to artificially set prices below "market rents". How would you feel if in your chosen profession, the government determined that it was only worth "x" dollars when others were being paid "y". Or rather than you achieving a market based raise, you were limited to only what you made over the past several years??? Just doesn't seem to make sense.

And will you Eric please explain to me why individual property owners should subsidize your rent, and not either YOU or the government?? And why you think it's okay to steal from property owners, but not from a supermarket?

Interesting, if laughable, point of view. My landlord (like most landlords) doesn't subsidize shit.

They buy as much property as they can, pay others a pittance to maintain it, and charge myself and my fellow tenants vastly exorbitant rents so that they can sit on their asses, go on continuous vacations, play golf, and most importantly flip both their real estate and financial investments for even higher profits, so that they can become even wealthier and buy more property with which to rob the rest of blind through rent and speculation.

That's the planet I and everyone else reading this blog lives on. By all means send a post card from the one where you reside, so that we can see what it looks like.

It's horrible that this country has laws that prevent people named Eric from buying property. And here you've got the whole system figured out, and because of your name, you can't buy land and are being discriminated against. Instead you are stuck in a system where these people steal your money by letting you live in their building.

Oh, the inhumanity of it all! I'll be shedding many tears for you and your situation...

You ludicrously behave as if all people in this country have the equal ability to buy property. But of course they do not.

Some people can, and they generally do so, and then extort exorbitant rent from those who cannot.

What about the equation 2 + 2 = 4 do you not grasp?

What do you not grasp about private property rights? Hmmm? I can't just come and help myself to anything you own, simply because I may or may not need it. Do you understand that concept? If not, please send me your address and bank account details so I can illustrate for you what the concept of private property means, and what it is like when it is violated.

Anyway, you're not interested in facts, nor logic, nor in private property, so it's really pointless to even reply to you...

You are mistakenly confusing -personal- property and -private- property.

Personal property is perfectly reasonable. Everyone should be able to own a personal space to live in and the things to fill that personal space that fulfill one's life.

That kind of personal ownership has nothing to do with 'Private' property, which is owning -more- than just the personal items and space you need as an individual, so that you can make a profit renting and speculating off of what you have hoarded, while you do -nothing- of true economic value.

Indeed, that kind of hoarding of property from everyone else so that it can be held hostage for profit making, must be abolished, because it badly drags down the real economy, making all of us worse off; even the stupid elites who are doing the hoarding.

The fair solution would be for the federal government to stop subsidizing jumbo mortgages so housing could crash to a level everyone could finally afford. Without massive government support from tax breaks and mortgage support, housing would be quite reasonable in SF.

Your suggesting that San Franciscans somehow benefit from mortgage interest tax deductions in a much greater fashion then everyone else in this country -- therefore, increasing the price of housing here. Of course, that's not the case. In fact, since most of us rent, mortgage interest tax deductions have less of an impact here than in other places. So no, changing the way that the IRS treats mortgages would not make housing quite reasonable in SF. Sorry.

Not according to Realtor.com.

http://www.realtor.org/government_affairs/summer_2011_talkingpoints

"Reducing the Mortgage Interest Deduction Would Have a Very Uneven Geographic Distribution

Cutting the amount of mortgage debt that is eligible for a mortgage interest deduction would be an immediate tax increase on homeowners everywhere, but in high cost housing markets such as California, New York, and Northern Virginia such a tax increase would be especially devastating. In many of these high cost housing markets $500,000 is a modest middle class house or condo.

The initial implication was that the mortgage tax break was responsible for the high price of housing in San Francisco -- and that eliminating the tax break would bring the cost of housing down. I agree with the Realtor.com article, that, given the cost of the housing stock here, the effect would be huge. But the tax break alone doesn't account for the cost of housing here, which is far more a factor of the City's desirability, limited housing stock, limited growth potential, and concentrated wealth. Throw in Prop 13 and rent control laws that discourage people from moving (making the rental and ownership markets less efficient and more expensive for the next person who wants to rent or buy), laws that inadvertently encourage landlords to leave units vacant, and San Francisco's squishy construction approval processes that allow anyone to object to anything, anytime, without any sort of legal hook, and it is abundantly clear (to me, at least) that this is a multifaceted problem that cannot be fixed by waving a magic wand--be it eliminating the mortgage interest tax break, "vacancy rent control," or making modifications to existing rent control policies absent changes to other local and state housing policies.

I agree with that as well.

Because you are uninformed.

"One of the costliest tax deductions in the IRS code is the one that allows homeowners to deduct their mortgage interest from their income. The $477 billion in deductions taxpayers claimed last year (which includes second homes and home equity loans, and covers mortgages up to $1 million) is highly skewed to upper income households concentrated in the suburbs of a few major metropolitan areas and along the coasts."

http://www.weeklystandard.com/blogs/who-benefits-mortgage-interest-deduction_614586.html

That doesn't explain rents in the south bay, which are actually higher than they are in San Francisco.

NY rent control, actually rent stabilization, is very limited these days, and covering fewer units all the time. Also as mentioned later, rent is just as crazy in popular parts of the South Bay.

Your comment starts with the supposition that rent control is about keeping low rents. It's about maintaining stable rents once you are in the unit, which SF rent control accomplishes.

Or.. We could just adopt vacancy rent control, and solve the whole problem.

1. I don't see how this would solve anything.
2. We just have a philosophical difference about the role of government and ones ability to own property without government intervention.

It is patently obvious. If landlords could not raise rents on vacant apartments beyond the existing controlled rent of their previous tenants, they wouldn't be able to raise rents to the ridiculous sky-high market rates that currently exist, and rental housing stock in San Francisco would become profoundly more affordable.

That's not philosophy, it's basic math.

So in other words, if the value of the lease were established 20 years ago, the value of the unit would be exactly the same as 20 years ago, plus the 1% or thereabout annual increases that are allowed? If I am understanding you correctly, the owner/landlord would have no incentive to own property as the income would not even keep up with inflation. Since the state would be calling all the shots, seems easier just to have the state own all properties, right?

The obvious factor which you are all too conveniently leaving out of your equation, is that because there has been no vacancy rent control, the current profits that most landlords make are immense; truly the stuff of the 1% grabbing everything from the 99%.

So -even- under the scenario you paint, it would take decades (in some cases centuries) for profits to fall to zero.

And of course, it could easily be a component of a new vacancy rent control law to simply index rent increases to cost of living increases, thereby eliminating the very problem that you have projected.

Hence, no problem.

Indeed the only reason that current rent increases on rent controlled property are indexed at lower than inflation/cost-of-living is to counterbalance the fact that property owners are making ridiculously massive profits on the other units they own, which they can rent at exorbitant market rates.

Wrong, the reason why rent increases are indexed at lower than inflation is because 60% of residents are renters, and politicians are pandering to voters. Duh.

Gas is exorbitantly expensive too, let's tell gas stations they have to charge prices based on 1998 and see what happens!

You're absolutely brainless.

"We show that the distribution of benefits accruing from the mortgage interest deduction is highly concentrated geographically, with the preponderance of benefits going to residents along both the east and west coast, and to those living in suburbs of major metropolitan areas. Using IRS data on actual tax filer claims, we find a concentration of benefits at the ZIP code, city, congressional district, and state level. The markedly uneven distribution of benefits across political boundaries may offer a path to a scaling back of the mortgage interest deduction in favor of reducing the deficit or income tax rates."

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1932845

The reason rich people have rent control is because they can't afford to buy either.

Eliminating rent control would not make SF a city "a city almost exclusively for wealthier people" if it were replaced by a better system (see my other comment).

You seem to be stuck in "a rent control or nothing" perspective. I'd suggest the vacancy rent control modification is just lipstick on a pig.

Why not apply the same principles to rent that we do to food... subsidize the purchaser, don't control the price.

Please explain with actual facts, how adopting vacancy rent control would just be 'lipstick on a pig'.

Well, sure. I may be wasting my time though, as we seem to be poles apart. Let's say we both agree on affordable housing for all, but you seem to think it can be magically provided without leveraging the profit motive.

The reason I think vacancy rent control is lipstick on a pig is that it really only addresses the issue that rent control favors the long term renter and does little to help new residents or expanding families that need to move.

It actually makes worse the burden on landlords for a program that is intended to benefit all of society. It also increases the incentive to let the assets run down. My other posts are clear on why the cost of affordable housing should be more widely spread. Subsidize the renter, don't limit the rent. It works fine for food (e.g. food stamps, not a price limit for eggs).

I think you should ask yourself if ideology is causing you to stick with rent control, when a solution that works more closely with the market (rather than fighting it) could achieve the exact same end without all the distortions and waste of rent control (in any form). If you stick with ideology of not making profit from housing, then that is your true goal... rather than simply making housing affordable in the simplest way. That's your right, but be clear about it!

None of the argument you just made is factually compelling in the slightest.

Most particularly, your idea of making entitlements available for housing, similar to food stamps and other welfare, would make those payments dangerously subject to federal and state budget cuts.

In fact, the Section 8 program, which is exactly the sort of rental assistance that you are touting, was recently torpedoed by the federal government putting thousands of people out into the streets.

Safety nets and entitlements are too easy to cut. Rent control is not easy to skirt, because it requires no government outlays.

Finally, most large scale property owners (i.e. most landlords) are massively wealthy and aren't remotely paying their fair share of social needs in the slightest. It is precisely they, who should bear this burden above all others, because it is those rent takers who are, more than anyone else, ripping us all off.

You have an annoying tendency to consider your opinions facts, and others' opinions "not facts" and to compound that by calling people stupid for not seeing "the facts" as you do. You're blind to your bias, calling everyone else blind to their bias. Try to have a little more respect for others.

You've just presented some extra pros and cons, as I have been doing.

I consider making entitlements part of the above the line budget to be a *pro*. We should be conscious and aware of the total cost of government programs so they can be weighed and managed accordingly. "Off budget" programs like rent control are not a transparent way for our society to conduct it's business. Unintended side effects abound.

If, once we see the total cost of all programs, we wish to make housing support more or less of a priority then that can be done. If taxes need to be raised to pay for all desired programs, then taxes should be raised.

You're hitting all landlords with the same hammer... tax could impact each landlord according to their individual capacities. Your class-oriented world view is making you see all landlords as the same, precisely one of the points this article is refuting.

"You seem to be stuck in "a rent control or nothing" perspective."

Actually no Camryn. The real solution is repeal prop 13, end government subsidies for jumbo mortgages, and eliminate real estate tax breaks, which only help the super rich in a tiny handful of US metropolitan areas.

Until that happens we all have to put up with whiney rich people ragging on and on about rent control.

I agree with all of those changes. In a future where those programs have been eliminated, I would still wish to see rent control eliminated too. Subsidizing the rent makes more sense.

Have you heard Aesop's fable of the oak and the grass? The oak boasts how strong it is, but it blown down in a windy storm. The grass just bends with the wind. The market is wind... you can't beat it, you can only get desirable results by working with it.

"At the moment, a social program is being paid for entirely by landlords."

Thats not what they tell me at realtor.com.

http://www.realtor.com/basics/buy/closepossess/taxbenefits.asp?source=web

-- Tax Benefits of Home Ownership Are Almost Too Good to Be True
Uncle Sam helps you in three ways when you own your home. --

You're just describing another malfunctioning social program. I agree with scrapping them and finding other ways to target the real issue... that it is desirable for people to have assets, and particularly their own home.

Ha ha ha tell the US Supreme Court.

I only recently learned about Prop 58 -- it's a staggeringly hideous piece of legislation. You could go so far as to call it unamerican in the way that it resembles feudal European ideas of property and inheritance rights.

i mean, the current trend of gentrification in the city- increasing rents, increasingly wealthy residents- would continue regardless of rent control. san francisco (like new york, dc, atlanta, etc) is on track to become a totalized haven for the wealthy, like the suburbs have been for the last five decades. rent control was meant to slow this process, and it probably has. anecdotes about wealthy people paying just a little rent (and presumably signing leases at market rates, correct?) don't reflect the full story.

Actually if her property has increased that much her tax bill
went up by 2% of base value every year since she purchased her property.

Let's be fair Prop 13 allows the assessor to apply 2% increases every year. I doubt she has seen any reduction in her tax assessment since purchasing her property.

You folks would rather the woman be taxed out of her home as was the case before Prop 13.

Spend...spend....spend those tax dollars....someones got to pay for the public employee benefits....

Let's crunch the numbers. She paid $20,000 in 1980, therefore her property taxes were $200 in year one. They only go up 2% (though this could be lower depending on inflation) and continue for 32 years to today. Guess what she is paying in property taxes for her $1 million property? $377 per year.
Do you see the problem now?

$20,000 isn't what she paid for the property. That's the amount she put down.

Without government subsidies to offset the cost to build in SF U R screwed.

Source: The Bay Citizen (http://s.tt/15Jar)

Not really. The mortgage interest tax deduction overwhelmingly favors wealthy tax payers and yet is the seventh largest item in the federal budget. SUPPLY and DEMAND my a$$.....

http://www.fool.com/investing/general/2010/11/23/2-huge-misconceptions-about-killing-the-mortgage-i.aspx

-- 2 Huge Misconceptions About Killing the Mortgage Interest Deduction --

"Mortgage interest deductions cost the Treasury as much as $130 billion per year in lost tax revenue. Consider just how much that is. If the cost of subsidizing mortgage interest were a line item in the federal budget, it'd rank as the seventh costliest -- just ahead of education and veterans benefits. The federal government spends more money subsidizing mortgages than on anything other than defense, entitlements, unemployment insurance, and interest. Pretty incredible."

No actually it isn't about supply and demand. There are currently 30,000 vacant units in San Francisco, which should be required to be rented out, but are not.

You clearly don't have a clue what you are talking about. 'Vacancy Rent Control' means exactly the opposite of what you are claiming it means.

Vacancy rent control laws are put in place to -prevent- rents from being raised to market rate after current tenants move out. This is to prevent landlords from going completely nuts raising rents as has been happening in California ever since Costa Hawkins passed.

Doesn't matter. There are still thousands of vacant units.

Hi Jeff,

Thanks for commenting...and for mentioning this.

We've done some reporting on the vacation rental issue. In fact, we broke the story in 2010 that such arrangements are largely illegal under an obscure city law dating back to 1981.

http://www.baycitizen.org/columns/scott-james/vacation-apartment-rentals-lucrative-and/

But despite uncovering this, and promises by some supervisors to enforce the law, little has changed since we first published that story.

Thanks again for chiming in.

Best,
Scott

If rents were significantly lower and the demand what it is today, the departing tenant could essentially "sell" his tenancy to a new prospective tenant which would establish a market rate for the rental unit. In this scenario, the outgoing tenant would pocket the difference - I wonder how fair that would be?

Actually, there is a perfect solution. If the city wants to subsidize rents, they should give vouchers similar to Section 8. Then there would be no unfair burdens for landlords, and truly bad tenants could be evicted.

Everyone also knows the best way to bring housing prices down in general. You build more housing. So areas of SF need to be defined where very high rise housing can be built. It will not be cheap to build, so may not be cheap to rent, but in a market economy it siphons off a lot of the demand, bringing the rent on other units down. The more units that are built, the lower prices will drop. Simple supply and demand. Building a lot of SRO units would definitely help bring down prices as well.

To repeat. Section 8 was decimated by the federal government. Hence, such entitlements, subject to cuts, are not a solution.

And again, there is an oversupply of thousands of units already.

The problem is not supply. The problem is exorbitant rent prices on that supply.

No, the problem is supply.

Ask an economist instead of your crystal quartz.

Interesting. How can there be a supply problem when there is a surplus of thousands of units?

After you go ask an economist to explain that grade school math problem to you, I will eagerly await your brilliant answer.

Sorry, I did not realize you hadn't read the article you are commenting on.

The article already answers your question... and I quote "about 10,600 units are kept vacant by landlords who would rather not deal with rent control".

Do you have any other questions with glaringly obvious answers that you need answered?

In other words, the problem is selfish landlords trying to duck rent control, while they scheme ways to make higher profits through eviction and property flipping.

Do you have any other glaringly obvious answers that so perfectly make the case for your opposition?

Take it to the Supreme Court.

It's being done already. http://online.wsj.com/article/SB10001424052970204464404577118912082926658.html

That is indeed what the second circuit ruled, and what the Supreme Court is considering reconsidering.

Oh yea. And Prop 13.

That's pretty much exactly what a report by HUD concluded over a decade ago. Rent control basically only helps one group of people - those who do not move. Whether they're rich or poor, whether they would like to move to be closer to family of work, whether they are black, white or martian. That's who it helps, and for no reason other than they haven't moved. They can be much better off than the landlord, and they can own 10 buildings elsewhere, but they get subsidized rent.

The group that loses the most, is anyone who is looking for an apartment. The remaining apartment rents are higher as a result. The economy and employment also lose as landlord do less improvements to properties, since they have less incentive to.

I have an old cycling buddy in London who owns several rental properties, but has maintained his home for 40 years as a tenant in somebody else's building. Oh, and he's a retired rent board judge!

Yup. Prop 13 is something like rent control for landlords. But if longtime SF landlords lose their property tax protected status, there will be an epidemic of Ellis-Acted properties. Then rents will go still higher!

Agreed. The article also doesn't mention that landlords can "bank" increases for up to 5 years, then raise the rent all at once. In '94 the slumlords who owned our building (an often-enebriated husband and wife), who had banked the annual increase for several years, decided to suddenly raise the rent by nearly $700/month. I went to the rent board to ask if we could at least have some safety issues remedied if we paid more money, and was met by indifference. So my roommate & I moved out, and the scummy landlords raised the rent to a laughable (at the time) $2,000 month. (We'd been paying $900, or $450 each). I will never weep crocodile tears for a landlord after my experiences renting in SF.

Your entire rant is easily made null by simply repeating a couple of the, facts, that I've already stated.

Fact: There is no housing shortage because there are 30,000 vacant units in San Francisco.

Fact: Allowing vacancy rent control would completely eliminate the problem you are whining about.

Any questions?

Any questions? Have you answered any of the many raised by others above? Except to say bring back pre-Costa/Hawkins rent control?

I raised all my questions above; you countered with two supposed facts, a fact apparently being anything so proclaimed by you regardless of counter-arguments, logic and social experience. You remind me of the Occupier on Wall Street who shamelessly told an interviewer: "Wouldn't it wonderful if we could just get rid of money?" (I believe she starved to death while trying to barter an antique piece of macrame from the sixties for an organic lunch.)

If there are, in fact, 30,000 vacant units in SF, it is a response to smothering bureaucracy and alternative uses for the space. How is there therefore not a shortage? As this is a desirable area to live and usually has a more dynamic economy than elsewhere, there will always be a shortage. Thirty thousand units off the market makes it worse; it in no way belies that it is so. If there were only three copies of a very rare postage stamp in the entire world and you destroyed one (permanently took it off the market), is there therefore no shortage? No, the shortage is more severe.

You keep referring to "vacancy rent control" and, as a result, have made this discussion hard to follow. I know what you mean but in over 30 years of the rent control wars, I have never heard that exact phrase. Costa/Hawkins precluded local jurisdictions from controlling rents through a vacancy. This is commonly referred to a "vacancy decontrol." I know you mean the opposite -- no increase allowed even with a change of tenant -- but some in this discussion seem confused. It took me a while to know exactly what you meant.

That clarified, how would the repeal of Costa/Hawkins solve the problem of shortage and affordability? If a minimum wage does not promote unemployment, why not raise it to $25/hour? Or $50? If artificially low rents based on accidental historic circumstances is good, why not lower them even further? You want to take all the [obscene] profit out of rental housing. Terrific. That's a great solution: no profit, no housing. Who will house the people? Oh, I forgot, housing is right. The government will provide. Good luck with that. (Interesting, even the distinctly left-leaning Bay Guardian once declared the San Francisco Housing Authority the worst landlord in the City.)

Thank you for bringing the facts to light. Keep 'em coming.

It is self evident that if vacancy rent control were implemented, there would be no problem.

This makes all of the other nonsense that you people are whining about completely irrelevant.

Except that your contention is bullshit, and landlords would still be able to make a profit. They would just make a lot -less- profit than they do now.

Wherever in a capitalist economy there is the capacity to gain even the -slightest- profit, some will step forward to make that profit, regardless of how small it is.

Since you can't possibly argue that vacancy rent control would completely eliminate profits on rental property, you are then simply full of crap.

Thanks, Comrade Eric, for your incredible insights. I forgot that we have to defer to your views, even though they are about as fringe and irrational as they get. Thankfully, they provide for good laughs, rendering you the worst rhetorician around.

You posted earlier that property owners are not allowed to profit. Because in Eric's world, that's "stealing." Now they are allowed to make a slight profit? (Your belief that buying property and then earning a profit from it constitutes stealing would require all us to live in a system governed by a different Constitution than the one we have.)

No. I posted that property owners shouldn't be able to own property in order to make people pay them a profit to live on it.

However, since such is not the world that we live in, I -also- pointed out that your fallacy that vacancy rent control would eliminate profits from the rental property market, is patently ridiculous.

Your inability to differentiate between my arguing for a different economics around housing, while also arguing that under the -current- economics of housing, vacancy rent control would not eliminate profit making, is typical of the two dimensional thought process of neo-liberals.

Not that you're interested in facts Eric, but what you're proposing has been tried before. It created a massive housing shortage and very bad urban blight. Not even the most liberal city in the world would ever dare try it. Never, ever.

Your only hope as I've told you is Cuba, but for some reason you just don't seem interested in that earthly paradise. Oh right, the flow of refugees goes in the other direction... i wonder why?

Bullshit.

It has been tried before, where?

And what exactly were the negative results on tenants and on housing stocks?

Show me links.

As to Cuba.. If even an -incredibly- poor nation like Cuba can manage housing for all as a right, why can't San Francisco? Answer that question as well.

It is incredible how you can happily blind yourself to the truth. Cuba has not "managed" housing as a right. Cuba has simply sardined as many families as it needed to into one anothers homes. That's not management, and if you're so impressed by it, you really ought to move there.

Here's are a couple of links for you to ignore the content from. In fact, you won't even click on them, you'll just say they're wrong and capitalist propaganda...

http://www.stjohnandassociates.net/propertyManagementArticles/SJA-BerkStaMonicaRCProgDistImpact.pdf

http://www.manhattan-institute.org/html/cr_36.htm

Give me a break. Your 'links' are to 'studies' done by private firms that work for landlords and thus have no credibility whatsoever. The first one, Saint John and Associates, has right on the front page of its web site the following statement:

"In a regulatory environment that is comprehensive, ever-changing, and strongly pro-tenant, it is our mission to provide knowledgeable, principled consultation and representation to property owners and managers in Berkeley and, in the mobile home context, throughout California. At the same time, as an economist, Michael St. John, Ph.D. works to clarify the underlying economic issues and, through advocacy and expert witness testimony, to influence public policy in ways that reduce the imbalance inherent in most rent control ordinances."

Clearly, this firm is a paid tool of landlords, which openly states that its core purpose is to defend landlords by attacking rent control laws.

I actually looked through the bogus 'study' and it is ridiculous. It cites a bunch of demographic changes over the course of only the first decade in Berkeley under vacancy rent control and blames all of those demographic changes on rent control without showing -any- evidence whatsoever of how rent control might have been involved in the changes. Most importantly, the 'study' cited no statistics from the decades -following- the state abolition of vacancy rent control, which is the most important study period for assessing the impact of the abolition.

An example of how bogus the 'study' was is the fact that it made the dire prediction that because of rent control the number of tenants would supposedly decline below 50% in Berkeley 'by the end of the century' and guess what? Two decades after this 'study' was commissioned by landlords to bash rent control, the percentage of tenants is still above 50%.

So the study is clearly industry funded crap. Its predictions, false.

I didn't even bother with your second citation, because the Manhattan Institute is a well known right wing think tank run by property and financial investors.

To verify this see their Board of Trustees at http://www.manhattan-institute.org/html/trustees.htm

When I say cite evidence, I mean real -unbiased- evidence which has not been funded by industries that seek to abolish rent control.

Your sources are laughable.

You need to cite -unbiased- work which shows what happened both before, during and -after- vacancy rent control was abolished to prove the impact on tenants.

To get to this "property is theft" utopia, you'd have to repeal not only Costa-Hawkins, but the Ellis Act as well. Otherwise, all SF's rental units will become tenancies-in-common, and tenants will be slowly squeezed out altogether.

Sorry Mr. S. Marty Ass, but simply launching vacuous personal attacks at your opponent doesn't win a debate.

How about responding with an actual argument?

Please explain to us, with actual details, how vacancy rent control would fail to solve the problem we are talking about. I eagerly await the sound of crickets accompanying your non-response.

ps: Your pitiful attempt at grammar Nazism is also a joke. Let me spell out the grammar in question for you by extending the sentence so that you can understand its context.

It is self evident that if vacancy rent control were to be implemented...etc

Don't quit your day job to become an English teacher, ok?

I started my initial participation in the alleged debate with "My compliments to Eric Brooks. I will take the liberty of treating him with all the respect he extends to others." I am not above the use of an epitaph or a little profanity but usually tend to avoid them in public discussions. In this case, I took my tone from you and your use of name-calling and abrasive, abusive language.

The use of (sic) means the quote is exact even though it may seem to be in error. It does not only refer to grammar. In this case, I used it to make explicit that the use of the term "vacancy rent control" was yours. It is not a commonly used term and I have never seen it in 30 years of following the rent control wars. My addition os (sic) referred to your choice of nomenclature, not your stellar grammar.

(You previously had to correct another comment because he/she did not understand what you meant. From your response above: "You clearly don't have a clue what you are talking about. 'Vacancy Rent Control' means exactly the opposite of what you are claiming it means." (http://s.tt/15Jar)"

Explain how vacancy rent control (sic, get it?) would fail to solve the problem? Here is my non-response (chirp, chirp): Berkeley, Santa Monica and San Francisco all controlled rents through vacancy for 25 years before the passage of Costa/Hawkins precluded the practice. Did that solve the problem? Were we on the right track? You see, it didn't work. It is at least possible, therefore, that vacancy controls is not a solution. It is -- how do you put it? oh, yeah -- self-evident.

BTW,I only posited that ONE of us was a moron. Since you took this as an insult, I can only assume you made your pick.

BTW II. This is fun but it's too easy. You ought to quit while you are only this far behind. You are making an absolute fool of yourself in a public forum. Why would you want to do that?

.

No, San Francisco did not control vacancy rents before Costa Hawkins.

Nevertheless, you have at last, raised a pertinent example.

However, you posted no numbers whatsoever comparing the behavior of rents during vacancy rent control in places like Berkeley, and the behavior of rents in those places after vacancy rent control was outlawed.

Please elucidate your point with actual comparisons. Otherwise it is mere conjecture which doesn't stand up.

And the by the way, the term 'vacancy rent control' is perfectly well known. See http://www.sflandlordtenantlaw.com/Subletting-Assignment-and-Costa-Hawkins.htm

Finally, my experience with overt pronouncements about who is out-debating who, is that they are generally tendered by the one who is losing...

Eric, the "explanations" and "actual arguments" are all here. You however are clearly not interested in them, so please stop asking for them and pretending you'll read them.

Excellent. If we now boil down your response to the one bit of factual information that I asked you to provide (and eliminate all of your empty non-factual fundamentalist proclamations that housing will never be built again if we institute strong rent control laws) we are left with one clear fact.

In Berkeley rents were relatively low during vacancy rent control, and when vacancy rent control was made illegal, wonder of wonders, Berkeley rents jacked up immediately to market rates.

I also don't recall any reports about Berkeley's housing availability collapsing under its vacancy rent control regime; which -also- belies your ridiculous claims that housing will rot away and then cease to exist under vacancy rent control.

geez indeed...

Berkeley rental housing was beginning to collapse and in some degree still is. Marginal profits, appreciation and respect for legal requirements, a continuing sense of responsibility for the product and the customer, protection of a then-shaky investment and hope for a more reasonable future kept Berkeley housing going until Costa/Hawkins (C/H) passed. It is only the passage of C/H that saved the rental housing in Berkeley from a premature degradation leading to a South Bronx phenomenon. IF YOU TAKE ALL INCENTIVE OUT OF THE PROVISION OF HOUSING TO OTHERS, WHY WOULD ANYONE DO IT?

Before C/H, the Berkeley Rent Board promulgated rules which made capital improvements difficult to impossible -- and certainly not an attractive proposition to be taken on voluntarily. With C/H, things are at least possible, even thought the Board now uses any C/H rent increases to offset any capital improvement increases to which a landlord would otherwise be entitled according to their own rules.

As to the "all of your empty non-factual fundamentalist proclamations that housing will never be built again if we institute strong rent control laws..." Of course strong rent controls applied to new housing would preclude it development. It is only the exemption of new construction from rent controlthat led to the continued development of some new housing. It is only with the advent of STATE prohibitions against rent control for new construction that the industry now feels comfortable with building new housing for rent.

The truth is that rent control is fabulous for new construction. It effectively takes the whole existing housing stock off the market as competition. It is precisely because a four-bedroom, 1200 sq ft apartment in Greenwich Village, under rent control, rents for under $400/mo (reported in the NYT from a few weeks ago)that a new two-bedroom apartments in the same Manhattan neighborhood from $4,000/mo.

So, what have we learned, Eric? 1) rental housing under severe rent control will not automatic turn to dust if supported by income from other components of the property (commercial and non-controlled housing) and 2) rent control does not prevent, but rather encourages, new construction -- and higher rents -- if there is reasonable assurance that control wills not be applied to the new housing over an acceptable period of amortization.

So that's lesson nine. You are not a very good student but I try. What else ya got?

Your ridiculous fairy story that Berkeley was undergoing some sort of housing crisis due to vacancy rent control is utter bullshit.

I challenge you to show us objective news reports from that period discussing how vacancy rent control was causing this so called housing crisis; and to show objective news reports after Costa Hawkins was implemented which describe how eliminating vacancy rent control increased housing.

You won't be able to, because there aren't any.

Eric, if you can put aside the invective and curb you emotions for a second, I have a some basic questions for you:

If rent control is such a good idea when considered objectively, dispassionately, practically, functionally and fundamentally, why has it become law only in cities where the majority of the voters are renters? Why have over 40 states preempted the practice? Why has virtually every economist -- including avowed liberals like Paul Krugman -- who has ever written on the subject come to the conclusion that rent controls are a bad idea?

Your passive aggressive pot-calling-the-kettle-black smart ass attacks aren't going to turn this debate for you.

There's no way I'm going to put aside my honest anger for insidious selfish neo-capitalists like you, whose pathological hoarding of property and excessive wealth is triggering the collapse of the planetary ecosystem, and causing massive human suffering both in the U.S. and abroad.

And the reason vacancy rent control is outlawed in so many places is obvious.

People like you use vast accumulated wealth to influence politics and get tenant protections eliminated. The only places where you don't always get away with it, are cities where tenants are so numerous that they have real political power in numbers, to leverage against landlord and financier wealth.

Paul Krugmann? Give me a break. The guy is a neo-liberal minded fool who has not sufficiently deprogrammed himself from his 'economics' education in academia, such that he can understand how economics actually work in the real world.

Well, that explains everything.

Your ignorance, you bias, your vitriol, your narrow-mindedness, your short-sightedness and your astounding stupidity. I have had enough. I am going back to taking care of my buildings and my tenants. Thanks for the entertaining break.

I will treasure your last message. In fact, I think I will frame it and proudly hang on my office wall.

End of debate, Eric. I concede. You win!

Win? Since when is this a competition?

This debate is about people like me, calling out people like you, to prove your Randian assertions about rental property.

The last time we left off with actual content, you had asserted (without citing evidence) that Berkeley housing had suffered under vacancy rent control.

I then challenged you to prove your assertion, and instead of doing so you switched back to passive aggressive personal attacks on my character as a blogger (presumably because you could -find- no proof of your claims).

Boy, you're a feisty little bugger. Like Cool Hand Luke is his fight with Dragline. He had nothin', absolutely nothin' but he just kept comin' back.

I don't need to prove the Berkeley story to you. One, I lived it and I know whereof I speak. And two, you are so far beyond an open mind on the subject that you would not be convinced if Berkeley looked worse than Dresden did in 1945.

Nevertheless, as I explained, the damage inflicted on Berkeley rental housing between the passage of rent control and the inception of vacancy decontrol was limited because it was "only" a twenty year period. Costa/Hawkins SAVED Berkeley rental housing. Post C/H rents allowed for proper maintenance of the housing stock, every effort by the Rent Board to see it otherwise notwithstanding.

I have proved or at least supported every thing I have said, in not with data or history, logic and common sense. You just call me an d others names (and yes, I have responded in kind) and make no sense.

And please, do not insult me with a label of passive-aggressive. In this arena, there is nothing passive about my attitudes or activities.

Are we done?

Translation of your screed into one sentence:

"It's true that Berkeley suffered housing shortages under vacancy rent control, because I -say- it is true; and I don't have to show anyone actual evidence."

You've got to be kidding....

There is not ONE WORD is the message to which you respond about shortages. It is about the the upkeep and deterioration of housing . That is what I have intimate experience regarding and that is what I addressed.

Shortages, now that you have brought it up, only pertain to markets. (I guess a shortage in a demand economy is when someone wants something they don't have, but that is not the kind of economy we have, much, one can safely presume, to your dismay,) Shortages in a market economy are the result of more demand than supply. As rent control keeps the supply down and, when vacant units are controlled, the demand up, it can only exacerbate shortages. UC is a constant provider of demand in Berkeley, even more so as the campus grows, and the City controls the supply. As mostly everyone would like to live within walking distance of campus, there will always be shortages. In the sixties, just about everyone affiliated with UC lived east of {then] Grove Street. Now they live substantially farther away, Cal has become very much more a commuter campus and the sense of a university community has suffered. And yes, rent control played a significant role. A one landlord said about twenty years ago: "I'd love to house the Class of '98 but I am still housing the Class of '78."

Eric, do us all a favor and go occupy something!

Give me a break. Stop quibbling about semantics and answer the challenge with facts.

Show actual proof that vacancy rent control in Berkeley had poor outcomes for tenants, through 'deterioration', higher rents, lower supply, space alien take-over or whatever the hell other bad outcome you are claiming that it created.

Show reports that prove this.

I've asked for such proof three times now and you have responded by splitting hairs on semantics and making vague unsubstantiated predictions of what -would- have happened had vacancy rent control remained.

That's not an answer. And you know this full well, because you are just playing at verbal acrobatics to avoid answering the challenge with actual proof, because you don't -have- any proof.

The reason?

It's not there.

Do us all a favor and occupy yourself, with re-reading 'Atlas Shrugged'...

I observe that apples fall to the ground, you say show me a report. I say cutting the income to a building will necessarily diminish it's care over time -- logic, not semantics -- and your say show me a report. I say you cannot cut off the lifeblood of a building -- money for maintenance -- and you say unsubstantiated. I called you earlier on saying something was self-evident (because it wasn't). However, something are. Like you cannot maintain an apartment build without income. You may chose to believe otherwise. Frankly I don't care.

Ironically, it I had the time and inclination,I could offer objective, third-party evidence of all of my assertions which are subject to such evidence. I do not have the time and I do have demands on my time which matter more to me.

Look, Babbling Brooks, I am never going to convince you of anything as your mind is totally closed on the subject. You are sure as hell not going to convince me of anything with your lame-ass rhetoric. (Ironically, I could do a vastly superior job of defending and justifying rent control than you will ever be able to muster.) And we have exhausted the attention span of everyone else out there in Cyberland.

I think it is best we call this over. I have already one conceded defeat to your superior arguments. I do so again. You may take a victory lap in whatever fantasy land you live in.

I see... So now, after spending three days writing repeated voluminous responses on this thread to make long convoluted theoretical 'logic' pronouncements that rent control is bad for tenants and rental housing supply, suddenly, when backed into a corner where you have to actually prove what you are claiming with citations of fact, you don't have time.

How very convenient for you.

In a nutshell...., yes. I will stand on what I have written.

And I hardly feel backed into a corner. More like bored with your opposition. You don't read and/or respond to what I write. You may disagree with me as you will, but at least I read what you write and respond to it. When I have sto say something specific about property maintenance and you come back with a response challenging what I said about shortages (when I said nothing about shortages), I don't want to play any more. You are just not very good at this. Find me someone who knows something.

Thank you!

MC, how in the world do you lose less money by keeping units idle when you could make more money (even if it is not enough) by renting the units? Your statement makes no sense.

To your questions:

1. What is our obligation to pay you a profit for a place to live? We all -work- for a living, and through doing so, prepare pensions and social security for ourselves. Why shouldn't you do the same, instead of sitting idle trying to make a living off of rent and flipping property?

2. The most practical solution is to institute vacancy rent control on all units at their current rates, and allow for rent increases just high enough to match the average percentage cost inflation of maintaining and providing apartments.

3. There is already a local rent board. It should be democratized by having its members be elected instead of appointed.

The problem you face, is that, as an honest man with ethics, your are in a business where you will not make money unless you become a dishonest bastard.

Sell the property, (preferably to the current tenants as a co-op) take your losses, and find a way to either make a real living, or retire. (Rental property seems to be making a comeback so it is conceivable that soon you might be able to sell the building for a price at which you will break even.)

@ Eric

Please correct me if I'm wrong, but it seems that you reject the concept of private property ownership at least in residential housing. In my opinion This leaves the goverment as the only viable landlord.

People need housing and right or wrong, our democracy as not chosen to provide this to the majority of the citizenry. The notion that landlords provide no service is simply false. My tenants live in a clean , well maintained building. This doses not happen magically. Basic cleaning , of the common areas ie hallways, lobby , laundry rooms, garage and exterior spaces requires about 20-24 hours per week. Repairs due to wear and tear as well as careless ( even if unintentional ) damage can usually be counted on for at least an additional 5 days per month. Tenants also have request , both reasonable and unreasonable, the lock themselves out, they clog sinks, they flush paper towels, etc., etc. etc.
I'm not complaining mind you, but it all takes time. For what it's worth, I do have a job , this investment, was meant to see to the future needs of my family , specifically to provide some income for my sister, who is unable to work.

The local rent board has set annual rent increases at 1.2% , less than half the rate of inflation with no allowances for additional expenditures. I.e $30,000 for a new boiler system for hot water.

The reason property owners hold units off the market is that once rented, they lose all control over that unit . Your plan for vacancy control virtually guarantees that, at some point in the future, it will become a money losing asset.

Your idea of selling to my tenants as a co-op is quite interesting. I assume of course you realize that the city has made this a virtual impossibility. Advocates for rent control have played a significant role in this, fearing the loss of rental units they promote he needs of renters over promoting home ownership. Tenancy-in-Common sales are severely limited , and complicated financially because you don't actually own your individual unit . They also create a forced business partnership with people you may or may not choose to be in business with. As for condo conversion, you have a higher likelihood of being struck by lightening than getting permission from the city.

Finally, the advocates for rent control have never adequately addressed the fact that all too frequently the beneficiaries of the rent control subsidy have no economic need for it. Without needs testing , poorer people end up subsidize the rental costs of the affluent. One of my tenants , a family with two small children , are paying $2,300 per month with an annual income of less than $65,000 for a family of four ( I know from the application). Another of my long term tenants pays $1,083 for the identical apartment. She uses her disposable income to lease a new Mercedes every two years ( im told the payment is about $1,500 per month for the car) BTW, she's a partner in a law firm downtown. How is this in any way, shape or form fair?

My units would average about $1,200 to $ $1,800 in most other markets. Instead they are all over the map with younger people of lesser means subsidizing older more affluent people who had the good sense to get there first and stay put.

To some of your points.

- Government housing is not the only way to provide nonprofit housing. There are co-ops, land trusts, and housing nonprofits. And if housing were made a right, at cost, the economics of funding housing would completely change. As I have said before, lower rents would mean far more money circulating in the local economy, and taxes on that circulation could provide for housing. Cuba, a country with profound economic challenges when compared to San Francisco, has housing as a right. If Cuba can accomplish this, San Francisco certainly can.

- Great. You have a job. So why do you expect tenants to pay extra rent to you in order to fund your retirement, when you should be providing for that retirement yourself? They provide for -their- own retirement. Why should they pay for yours as well?

- And what difference does it make how much those tenants get paid? Again, your income and retirement are not their responsibility. Basically what you are saying is that you should be able to charge wealthier people higher rents as a sort of informal tax to pay to yourself. Instead, why aren't we much more fairly taxing wealthy peoples' incomes and spending at higher rates through local -government- and then putting that revenue -equally- into the community for everyone, instead of just letting you and your fellow landlords take it all for yourselves as rent.

- Of course there are services involved in running housing and coordinating capital improvements on a property. Those services should be provided to tenants at cost, with the people providing the services making a reasonable wage for doing so. If you wish to get paid a fair wage as an apartment manager, by all means take that up as your profession. But we both know that this is not why you own that building. You own the building to get extra funds for yourself above and beyond the cost of maintaining the property.

Do you not see that it is not ethical for you to make extra profit for yourself by charging people extra for living on property, while you do very little work, and produce nothing whatsoever of value for that money? And that the only reason you can get away this is that you own the building?

As I have said previously, that is legalized theft. And the only reason we don't as a society condemn it as such, is exactly that it is currently legal. Trust me, three hundred years from now, people will look back on the times that landowners and landlords charged others a profit for living in a home, as barbaric; just as barbaric as we now view the lording of kings over everyone (predominantly as landowners) during the middle ages. It's pretty much the same thing.

I guess my mistake in wading into this fray was assuming that we were having a discussion about solving present day issues and not creating a new Utopian society.

Cuba may have housing as a right but they also have profound housing shortages. Ask any 40 year-old living with their parents if they might not enjoy a little privacy and autonomy? They also enjoy a thriving black market where one must traffic in order to meet those needs the government cannot provide.

If I understand you correctly, I'm not entitled to profit from my capital investment? Once again leaving the government as the only landlord. Since it's immoral to profit by providing for peoples basic needs as a service who, other than the government, would provide the necessary capital?

As a practical matter, I am a apartment manager (albeit, uncompensated at present)Some things I attend to myself, others I hire vendors at the prevailing wage.Remember, I'm losing money

Is it ethical for anyone to make a profit on anything?

If so, which endeavors would you consider worthy?

Would private ownership of any housing be allowed?

Was it unethical of me to sell my parents home for more than they paid for it?

At some level, it doesn't matter what people make but that's what is so out of whack with the current system in San Francisco. The informal tax is the tremendous subsidy provided, regardless of need. If government is the answer to this problem and we continue to live in a society with income inequality then fairness does matter. Shouldn't subsidies go to those who actually need them?

Please refer to my previous post on my cost structure and consider this; In the absence of rent control I believe my 1-bedrooms would rent for $1,250 and 2-bedrooms $1,750 respectively. This amounts to $28,500 per month , leaving a surplus of $5,150 per month for unanticipated maintenance expenses and , god forbid, a small profit.Yes, some pay more, but many pay less.freeing up those dollars you spoke of earlier. Subsidies, if required could then be provide at the government level,based on actual need.

Alternatively government could build an allocate 125 sqft. for each man,woman and child a $1 per foot annually.

BTW, I agree that present tax policies are unequal,unfair and in desperate need of reform.

Your argument is really against the creation or holding of any personal wealth. You may be right about the future but it's unlikely either of us will ever know. That having been said, what's the solution to our present day issues? Try to be realistic about the economic and political climate we live in today.

MC, the huge mistake in perspective you are engaging in is in assuming that your personal experience as a small land owner represents how the landlord/tenant relationship works.

What you don't get is that most landlords are not losing money. Most landlords are not de facto apartment managers.

The reason you are not like them, and are losing money, is that (while you still don't get that it is fundamentally wrong for you to even seek in the first place to make someone pay you a profit for housing) you are nevertheless pursuing your attempt at being a landlord relatively ethically.

You can't -do- that and make money as a landlord.

As a result, successful landlords are people who understand full well that they are getting something for nothing. And they certainly don't maintain the properties themselves. They hire other people to do it (for a pittance) while they make large profits sitting on their asses.

Being a landlord is not about getting a reasonable return for 'providing a service' to people. Being a landlord is about forcing people to pay you as much profit as you can squeeze out of them because if they don't give it to you, they won't have a place to live. Until you grasp this, and decide to be a selfish asshole, you will not make money as a landlord.

And your protestations about your opposition being utopian and somehow claiming that people shouldn't make a reasonable profit for anything, is complete nonsense.

None of us said that.

We said that because housing is a necessity like health care, people shouldn't be making a profit off of it.

And your nonsense about Cuba is also ridiculous. I've got news for you. In good old capitalist America there are millions of people crammed as multiple -families- into tiny apartments in far worse conditions than Cuba. And there are also at least tens of thousands of HOMELESS people.

The housing situation in Cuba is far better than that of San Francisco, and -everyone- in Cuba has a -right- to have a roof over their head. Homelessness is not allowed there.

Stop pretending to have discovered some new way of making affordable housing. Your “vacancy rent control” can be explained by saying that you want to take financial and physical control of property that someone else is paying for. Call it what it is –you want it so you should have it no matter what is cost someone else. Why should you buy a house when you can take one someone else bought and force them to pay the bills. I admit that its clever calling it “vacancy rent control” but your idea is kind of legal stealing of others hard work.

Bullshit.

Vacancy rent control is nothing more, than simply not allowing rent to be raised to market rates after a tenant leaves an apartment.

Your lame attempt to pretend that it is more than that, is ludicrous.

"We purchased this building as a long-term investment ,fully aware of the challenges of rent control."

That you put a half million dollars at risk at the top of a real estate bubble is hardly a compelling critique of rent control.

I have a question in return for you MC.

What is my obligation as a renter to subsidize your obviously flawed business plan?

Criticizing our judgement as to the timing of our investment may be a fair point. However, it does nothing to address the fundamental question of basic fairness.

If your point is that all housing should be provided by the government as part of a package of basic guarantees fine. It's not the world we presently live in, but I'm certainly willing to engage the philosophical discussion.

What's sorely missing from this entire thread is any serious discussion of solving the problems rent control is currently causing not just for landlords, but renters as well.

There IS a shortage of housing units.
Landlords DO hold units off the market.
Like it or not,market conditions DO force low income people to pay exorbitant rents.

Instead of continually arguing in favor of utopian solutions that history has demonstrated are flawed at best, how about rolling up our sleeves and coming up with some real world solutions?

Basic fairness?

Rent control is basic fairness. It started as a way to allow stability for law-abiding tenants somewhat on a par with what Prop 13 did for homeowners.

Before 2008, that balance seemed reasonable. Now rent control is barely adequate compensation for the federal government's incessant handouts to homeowners.

Renters are not penalized by rent control. When I moved here, I was overwhelmed by my new rent. It was more than twice what I'd been paying in Chicago. But I took all factors into account, including rent control, and decided that the high rent would be worthwhile because I wouldn't have to worry about exorbitant increases. If I left after 2 years, I would have paid the high rent for a short period. If I stayed a lot longer, the rent would become more affordable if I worked hard and earned more money.

Not once during the earlier years did I think that I was subsidizing anyone else. I took responsibility for my own choices.

I have been forced to take responsibility in many, many ways for real estate speculators who trashed our economy. I am not going to put up with a smug lecture about basic fairness from one of them, too.

You want reforms? OK. People who keep a rent-controlled apartment when they have another place to live should be penalized with a huge fine, compensating the landlord for fraud. They are violating the laws of rent control, and there are no consequences right now.

I would increase the annual increases to 75 percent of inflation, because that more closely reflects the costs to the owner. The 25 percent difference reflects the tax breaks the owner gets; the rent is paid in post-tax money.

My one concern about this is that the Fed's monetary policy is putting us at risk of hard inflation, most of it created to benefit debtors such as yourself and other mortgage holders. It does not seem right that the government keeps touting the benefits of lower mortgage rates for even underwater borrowers, because it puts more money in their pockets, but the savings are never passed along to renters who have been forced to back a lot of these mortgages with their taxes.

Would you call that fair?

I know you say you can't refinance, but that's because of your choice. You want city government to change the law to the detriment of renters because of your miscalculation. Believe me, renters have been harmed enough bu the mistakes of property investors.

amen

You ask about an obligation to provide subsidized housing. You have none. You are providing only what you agreed to provide when you purchased the building.

The purchase price was established with rent control as a factor. You would have had to pay far more if rent control had not been part of the deal.

Also, you inherited the money for the down payment, and the inheritance was based mostly on real estate. That means very little of the money was taxed. (The stepped-up basis rule makes the notion of double taxation on inheritances laughable; a lot of the money was never touched.)
Why should those of us who work hard for a living supposed to subsidize that sort of windfall? On top of that monstrous break, you want the right to decide what constitutes "need'' for a renter.

You already made your decision. You bought a rent-controlled building. Like a lot of people in the real-estate boom, you overpaid. I did not buy because I saw the folly in the market. Now, I'm being forced to bail out all the people who gambled unwisely. You want out of part of the deal that came with your building. Then go back and pay the former owner what the place would have commanded in 2005 without regulations attached.

That's what the 'vacancy rent control' discussion has been about. Until the State outlawed it in 1996, some communities had ordinances that did not allow landlords to raise rent to market rates after a tenant moved out. Instead the rent stayed the same as it would have been for the old tenant.

This is known as vacancy rent control.

You highlight the problem perfectly. Rent control, as well as assorted anti-development forces are stifling the housing market.

When was the last time a large multi-unit development for the express purpose of providing rental units was approved by the city? Federal, State and local governments lack the resources as well as the desire to develop these projects. Private investors will not make the long term capital investment without incentive and the opportunity to profit.

San Francisco has a supply problem exacerbated by numerous forces. Ironically, those who support rent control are frequently opposed to new development. Affordable housing means more development.

Long term landlords actually enjoy greater profits under rent control. especially if development remains low. Demand drives up prices on crappy apartments

A building owned by a real estate firm is clearly not "someone else's house" is it?

In fact, even one small apartment building owned by a small landlord is not "someone else's house" either.

Please explain to us, Mr. Successful, how the opposite is true...

Eric,
from above "You justify this by entitlement" "justify your anger and jealousy". Learn to help others not take what your want from others then justify with a lame excuse

Translation: You don't have a cogent response, so you'll just requote your own vague personal attacks instead.

Let's try again.

How is an apartment in a building owned by a landlord "someone else's house"?

Do you have an answer? Or are you simply going to continue your aimless neo-liberal blathering.

No reason to explain!
You would not understand, in your world its easer to exploit a landlord by using the hundreds of rent board laws that you understand. This is much easier than getting a job and paying a market rent. You would only understand ownership if you worked hard, saved, made a down payment, paid property taxes, bills, rent board fees, made repairs, and improvements, deal with great tenants and deadbeats like you. In your world getting others to pay the bills and make the sacrifice’s so you can have dirt cheap rent for life is easer then paying a market rent. For you taking is easer then hard work.

Funny, I actually work my ass off, my landlord definitely makes a big profit off of me and my fellow tenants, and in the end, we own, nothing.

Maybe the problem here (which you are so worked up into a frenzy about) is that you are just too dumb to figure out how to make profit off of your own rental property, and are therefore angry and jealous...

Now we are getting somewhere.
“Funny, I actually work my ass off” good for you, i’m serious
“my landlord definitely makes a big profit off of me” good for them, I’m serious

“in the end, we own, nothing” blame your self – it’s your problem

“is that you are just too dumb to figure out how to make profit off of your own rental property” you could be right or wrong but that’s my problem

“therefore angry and jealous...” not at you and not of you

Good luck getting out of your box

1. San Francisco will always be an expensive place to live and rent-- rent control or no. Rent control with vacancy decontrol makes it even more expensive for newcomers because supply is reduced by (a) long-term tenants who couldn't afford to live here if they had to pay market rents (no argument here as to whether this is good or bad); (b) property owners who Ellis Act their buildings or otherwise convert them to TICs and condo's that they can profit more from; and (c) developers who stick to condo's for fear that rent control will be extended to newer properties.

2. Many current long-term rent controlled tenants couldn't live here without rent control. Wealthy rent-controlled tenants, deprived of their bargain digs, might decide to just buy something they like better. More supply all around.

3. In an apartment building with communal heat (radiators) and hot water (boiler), a tenant paying below average rent in 1978 wouldn't be paying more today than the increases the landlord pays for gas and electricity. The pass through for utility increases has been effectively abolished recently by having it novate (start over) every 5 years. Theoretically, the landlord would at some point be paying more for the tenant to live in his building than to have the unit vacant.

4. Landlords charge what the market will bear. Reduced supply and rising demand mean higher rents.