California Today: Why Rent Control Groups Are Taking the Fight to Silicon Valley | Hacker News Reader

California Today: Why Rent Control Groups Are Taking the Fight to Silicon Valley

nytimes.com

12 pointsbko10 comments

I've recently (as of four weeks ago) moved to silicon valley. I am amazed at how much wasted land there is here used as car parks, or sprawling one and two store buildings, or just flat out vacant. (There is a lot of vacant land.) I am also pleasantly surprised by the potential I see all around here for in-fill, and intensifying neighborhoods, or just outright building entirely new towns on top of that sprawl of car parks and office parks.

The solution to housing costs is not rent control. It is better urban planning, and building more houses. Sadly half of the examples of intensification I see here are miserable, soul crushing places, huge monolithic superblocks of mid-rise cookie cutter apartments on-top of parking that you only access by driving into your building and driving out of your building.

South bay could practically be a utopia if it pulled it's head out of its car loving ass.

The housing problem in the bay area has nothing to do with space. There's plenty of space in most places, or at least enough room for greater density. Even as far out as Fairfield, you can see miles and miles of empty space, and yet all the stupid little houses are bunched up into a tiny little lot, surrounded by nothing but land.

The problem, as you said, is land use policy and regulations. All these rent control rules drive up the cost of building more housing, further constraining supply, causing even greater rent control... It's a downward spiral of epic proportions.

The true root of the problem is a lack of basic economic education. I've been viewing my voter election material, and there are countless politicians who freely admit that they've been "preserving open spaces", "preventing new construction and building" and even bragging about it! This tells you something about the general public: they don't understand (or believe in) the first thing about supply and demand. They just don't understand that more regulation leads to less supply, which leads to even higher housing prices.

> They just don't understand that more regulation leads to less supply, which leads to even higher housing prices.

Maybe. Or maybe they understand it just fine and don't care. Prosperous anti-growth types want a) their houses to grow more valuable and b) their neighborhoods to stay the way they are. Some of the leftier ones also don't want poor people to be forced out of their homes. All of these are reasonable things to want. It's just that making them happen has nasty consequences.

While highest and best use is indeed rare, much of what appears to be vacant is so for important reasons such as utility rights of way, contaminated sites, watershed protection, or geologically unstable land. What is needed are dense clusters of development like we used to build before cars and the green city movement.

Rent control is anti-market. You can never control the rent control and end up with rich people taking advantage of it and poor people paying extra because market is adjusted without those rent controlled units...

"Anti-market?" Sure. But using that as a point assumes that the market itself is otherwise efficient, and that rent control does more harm than good. I'm not so sure. Further, rent control is not one policy in every place, and not every market sees the same effects from those policies.

The market does not exist as a continuum, where "pro-market" moves us closer to a platonic ideal that works for all players and anti-market just moves us further away.

This article is really light on details. Can anyone link me to a more robust explanation of this particular fight?

The market is distorted. Is it sustainable when you have to make $216k/yr [1] to even afford rent (not mortgage) on a 2bdrm?

[1] http://sf.curbed.com/2016/5/17/11692468/rent-salary-2016-san...

The answer isn't to further distort the market with more price ceilings. All that will do is further mis-allocate resources.

There are many places in the country for those who make less money. No one is forced to live in those areas.

The New York experience is that while 1M of about 2M rental apartments have laws that influence the rent maximum (rent stabilized), it's subject to distortions with regard to two things: the free market rentals, which are as expected quite high, and also, and this seems to be unique to NYC from my conversations with lucky people not renting here, broker fees. Yes, it is quite difficult to even go to visit an apartment rental without a broker, who will charge you 10-15% of the yearly rent as a fee, should you pull the trigger. Rent stabilized units are difficult to find without connections or brokers.

Would rents be lower if 45 odd percent of the rental stock of New York City were all free market rentals? Honestly, I'm past ideological certainty at this point, so I honestly don't know. I know plenty of libertarian types with certainty.

Anyone interested in the question might be interested in this very recent article from Bloomberg, which talks about the rent control laws in NYC and how a very wealthy landlord faces jail at the moment because he discovered buying out rent controlled apartments in NYC and converting them to market rate, even illegally, made him uber rich.

" Out With the Poor, In With the Rich: The Landlord’s Guide to Gentrifying NYC Steve Croman has spent decades exploiting rent-control laws to bring in wealthier tenants. The state attorney general wants to make an example of him." http://www.bloomberg.com/news/articles/2016-10-12/get-out

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