Comment by jedberg | Hacker News Reader

Comment by jedberg | Hacker News Reader

As a previous student and renter, and a current landlord in Berkeley, I can tell you exactly why this happens.

Students don't vote in city elections for the most part.

The city council represents the homeowners and long time residents. The homeowners want their property values to go up, so most of them oppose more housing. The long time residents inexplicably hate students and "what the students do to this city" despite the fact that the University was there before every single person who live there now.

So the city council does everything it can to keep those property values high, since the students are a captive audience and will rent no matter what, and for the most part don't care what the cost is because their upper middle class parents and/or the federal government is picking up the bill until they graduate.

I personally do my small part by keeping the rent on our place below market, as close to our actual costs as possible. The appreciation on the property value is nice, but the steady income is really what Berkeley property is good for. In 19 years I've had three months of vacancy, and two of those were because I was renovating and one was because my tenants left in a odd month.

"What students do to this city"

How short sighted, without the school the whole Silicon Valley thing might have happened somewhere else and property values wouldn't be nearly as high.

But once you have yours the rest don't matter. Nobody's founding much of anything in Palo Alto garages these days.

As a longtime resident of a college town, I have no trouble both appreciating the value of having a University (which I went to) in town, and finding the students themselves to often be an irritance. I'm sure I was loud, obnoxious, and generally disrespectful of other people when I was a student too, but that doesn't make it "inexplicable" to dislike such behavior now.

I don't think we should punish them through housing policy though :-).

Thanks for telling it like it is. This is pretty much what has happend all over the Bay Area. Goodluck to the homeowners in getting to see their grand-children grow up when their kids can't afford to live here anymore.

I'm confused by these two statements:

"as close to our actual costs as possible."

"but the steady income is really what Berkeley property is good for"

Wouldn't 'as close to costs as possible' be exactly what it costs to maintain the property (insurance, maintenance / upgradtes, rates, etc) thereby eating all the steady income.

There's a big difference between self-imposing a 15% profit margin, or taking the "market rate" 150%+ profit margin.

> Wouldn't 'as close to costs as possible' be exactly what it costs to maintain the property (insurance, maintenance / upgradtes, rates, etc) thereby eating all the steady income.

Yes. We basically break even, including the cost of the mortgage. The idea is to own the property outright in 30 years, and then slowly ramping up the profits but still staying below market rate. Or simply sell the property.

But the point is it's a long term investment and savings account, that doesn't depend on the value to go up. If I wanted to be more rational I would add in a small return on capital as a cost, which would still have me be below market, just less so.

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