What do you think about rent control/mandated affordable apartments?

[the urban politician]

On a macroscopic scale these policies preserve economic diversity in our cities, and obviously on paper they look like a good idea.

However, for even our most staunchest of progressives, even you have to acknowledge that it seems a bit unfair for, say, a person who studied hard in school, took on lots of student debt, is making a decent salary ($70-80k per year), yet shares a building with somebody who gets to live in the same premises for a far lower price because he is "poor" without any regard whatsoever as to why this person is "poor".

In other words, if I'm paying $1500 for a product that a person who is "poor" is paying $600 for, then what's the point of trying?

[sopas ej]

Originally Posted by the urban politician

On a macroscopic scale these policies preserve economic diversity in our cities, and obviously on paper they look like a good idea.

However, for even our most staunchest of progressives, even you have to acknowledge that it seems a bit unfair for, say, a person who studied hard in school, took on lots of student debt, is making a decent salary ($70-80k per year), yet shares a building with somebody who gets to live in the same premises for a far lower price because he is "poor" without any regard whatsoever as to why this person is "poor".

In other words, if I'm paying $1500 for a product that a person who is "poor" is paying $600 for, then what's the point of trying?

But rent control also applies to you too. Your hypothetical $1500/month rent will stay $1500/month for a long time, or only go up in very little increments, with long periods of time between rent increases.

[dave8721]

Originally Posted by sopas ej

But rent control also applies to you too. Your hypothetical $1500/month rent will stay $1500/month for a long time, or only go up in very little increments, with long periods of time between rent increases.

Also in theory, maybe that 1500 he is paying would have been 1200 but the landlord had to charge 1500 to make up money they are not making from the one only paying 600 while they still have a building to maintain and pay taxes on it.

As an aside, does rent control exist anywhere in the US outside of NY and California? I am not sure if I remember Boston having it from my time there.

[jd3189]

The law should have several cut offs for different income levels. If you aren't making above $500,000 in Manhattan or San Francisco and you have a job in those areas, they should allow you to afford what you need. Of course, SFHs, townhomes, and penthouses are out of the question, but the vast majority of of multiunit and apartment buildings should be affordable. If you have to live near a poorer person, that's too bad. If that person has a job in the city, he or she contributes to that city and should be given a bare minimum to live there.

Rent should only take up to 40% of take home income or less. Fuck those other taxes that don't benefit people in any way, shape, or form.

[SIGSEGV]

Problems occur when there's no affordable places to live, but affordable housing should be built more inexpensively. In theory I like Chicago's solution of allowing developers to contribute to an affordable housing fund, but I don't know how well that works in practice. Like it seems we should be building commie blocks along the Orange Line or something...

[edale]

Originally Posted by the urban politician

On a macroscopic scale these policies preserve economic diversity in our cities, and obviously on paper they look like a good idea.

However, for even our most staunchest of progressives, even you have to acknowledge that it seems a bit unfair for, say, a person who studied hard in school, took on lots of student debt, is making a decent salary ($70-80k per year), yet shares a building with somebody who gets to live in the same premises for a far lower price because he is "poor" without any regard whatsoever as to why this person is "poor".

In other words, if I'm paying $1500 for a product that a person who is "poor" is paying $600 for, then what's the point of trying?

Affordable housing and rent control are two very different things. Rent control just limits the amount a landlord can raise rent in a given year. In LA, it only applies to buildings built before 1978, and it caps year over year rent increases at 3%. Once someone moves out, the rent can be raised as much as the landlord wants. With 3% increases every year (like what my landlord does) it takes quite a few years for someone to be paying significantly below market rate rent.

Affordable housing mandates in market rate buildings are a different animal entirely. In LA, the wait for affordable housing units is astronomical, so the chances of getting one of these units in a nice, new building are pretty slim. I do somewhat agree that it would be frustrating to know that someone is paying a fraction of the rent that you bust your ass working to pay, but chances are, you wouldn't even know. I have no clue how much my neighbors pay to be in the building I live in. I know one guy has lived there 20+ years, so I know he's gotta be paying a fraction of what I pay. Such is life

[BrownTown]

Very strongly opposed to all such regulations as they distort the market and therefore create inefficiencies. I'll just lay out a few specific issues though:

1. These sort of policies do more to subsidize big business than they do the poor. If there were not below market housing then companies wouldn't be able to pay shit wages for certain jobs as there would be nobody available to fill them. To a certain extent all these policies do is provide cheap labor to big companies so they don't have to raise wages.

2. Encouraging people to stay put like rent control and some California tax laws do damages market dynamism by creating a subsidy for people to stay in one area even if the economy would prefer them (IE: pay them) more to be in another. This is especially true when it encourages retired people to stay in their apartments near the core where the jobs are thereby displacing people who actually work there and could much more greatly benefit from those apartments.

3. Per usual in the US regulations always benefit the wealthy and the poor while fucking over the middle class. The wealthy can use their political power to get handouts from the government and then throw a few to the poor too so they will vote the way the wealthy want them to. Meanwhile the middle class gets fucked coming and going as they don't qualify for subsidies but also aren't able to get the wealthy people's tax breaks.

4. In extreme cases like San Francisco the critical mass of people getting tax breaks can be so great that they actually distort the political landscape greatly encouraging NIMBYism as the people in question get all the benefits of a wealthy neighborhood without having to pay the taxes of one. Obviously the last thing these people want to see is prices going down even if it fucks everyone else over.

If people really want to help I think the first place to do it is to fight NIMBYism at every turn so more housing units can get built in places where they are needed.

One question for those who support these sort of policies: What gives someone the right to live in a premier area like NYC or San Francisco? By that I mean that surely the demand to live in these locations vastly outstrips supply. Can a poor person in West Virginia apply for a subsidized apartment in Manhattan? A lot of this all just seems like luck. If you were lucky enough to buy a house in San Francisco in the 1970s (or whenever, not sure the optimal date), or lucky enough to land a subsidized apartment in NYC then the government in basically subsidizing you to the tune of hundreds of thousands of dollars over the course of your life. Meanwhile poor people everywhere else have no right to the same benefits.

[llamaorama]

Originally Posted by the urban politician

However, for even our most staunchest of progressives, even you have to acknowledge that it seems a bit unfair for, say, a person who studied hard in school, took on lots of student debt, is making a decent salary ($70-80k per year), yet shares a building with somebody who gets to live in the same premises for a far lower price because he is "poor" without any regard whatsoever as to why this person is "poor".

In other words, if I'm paying $1500 for a product that a person who is "poor" is paying $600 for, then what's the point of trying?

It's funny, I must have been born without the gene that would cause me to ever feel this way. I think your hypothetical high-achieving person sounds like a dick who doesn't understand that "losers" often do work hard.

Actually I don't favor rent control or affordable housing minimums because they are economically inefficient approaches. They only help a small number of people and don't solve the root problems behind expensive housing. I worry about the costs when cities play developer. We close libraries and parks because they cost literally only a couple of million dollars to run and that is somehow too much, but $40 million for a building?

That said, I think building dorms or micro-apartments for homeless people is a good idea even if its not cheap.

[lio45]

Stupid policies with counter-productive, perverse effects.

Let's just give 'the poor' an UBI (which could even conceivably be adjusted to the CoL of their area) and let them find market-rate housing.

[SIGSEGV]

Originally Posted by llamaorama

It's funny, I must have been born without the gene that would cause me to ever feel this way. I think your hypothetical high-achieving person sounds like a dick who doesn't understand that "losers" often do work hard.

Actually I don't favor rent control or affordable housing minimums because they are economically inefficient approaches. They only help a small number of people and don't solve the root problems behind expensive housing. I worry about the costs when cities play developer. We close libraries and parks because they cost literally only a couple of million dollars to run and that is somehow too much, but $40 million for a building?

That said, I think building dorms or micro-apartments for homeless people is a good idea even if its not cheap.

Yeah, we need some modern cheapish versions of the Cage Hotels.

[mousquet]

Originally Posted by llamaorama

That said, I think building dorms or micro-apartments for homeless people is a good idea even if its not cheap.

It makes a lot of sense in this kind of extreme cases.
We don't even do it here in Paris, while locals of the region could easily afford it.
But they're often crazy and stingy.

Otherwise, I agree with anyone blaming on subsidized rental housing, especially with BrownTown who threw good points in.

Basically some easy trick by lazy politicians and mayors over some Paris suburbs.
Vote for me, I'll keep on subsidizing you at expense of those bastards who still don't.
That's it, their only mediocre plan.

We've spent hundreds of billion euros in subsidized rents for the past 3 decades here.
It's been so much of a failure, I bet even the technocrats of the French welfare state lost count, cause their hellish social machinery grew so complex that they no longer can understand or control it themselves.

I just wish we'd spent the same taxpayer money in education, anti-racism, decent schools and teachers in the ghetto, and professional development/training.
We'd be downright kicking Germany's butt already, if only we'd done so.

[SpongeG]

In BC renters have a lot of protections such as they can only increase your rent 4% per year. So using myself as an example when I rented an apartment it was $450/month. The landlord didn't raise the rent for about 8 years, then he started to do it every year and when I moved out 12 years later the rent hadn't gone up all that much. But the unit rented out for $750 for the next tenant and I just heard the same unit is renting for $900 now. So if I had stayed there thanks to rental protection I wouldn't be paying what they currently want or could be getting.

Whereas I remember seeing a story on the news of a guy living in Alberta (Calgary) who ended up living in his car, because they have no rent controls there and his rent jumped from $800 to $1200 and he couldn't afford it any longer and was unable to find anything he could afford as at that time the economy was booming and finding a rental was tough. In Alberta they can only raise your rent once per year and they have to give you notice but there is no limit to how much on the increase, a landlord can raise rent whatever the market dictates. I am glad to have rent control in BC and would take it over having none.

[10023]

Originally Posted by sopas ej

But rent control also applies to you too. Your hypothetical $1500/month rent will stay $1500/month for a long time, or only go up in very little increments, with long periods of time between rent increases.

That’s not true of a market rate apartment. In fact landlords need to raise rent faster on market rate apartments to make up for the “headwind” from rent controlled apartments in a building/portfolio.

Rent control is not free. It transfers cost from tenants with rent controlled apartments to tenants with market rate apartments. It makes the latter more expensive, and by so doing actually increases the cost of city living for the middle class (who don’t qualify, but still struggle with housing costs in some cities).

If you live in a rent controlled apartment, then your neighbors are subsidizing your housing. If you run into them, thank them.

[the urban politician]

Originally Posted by llamaorama

It's funny, I must have been born without the gene that would cause me to ever feel this way. I think your hypothetical high-achieving person sounds like a dick who doesn't understand that "losers" often do work hard..

See, this is what bugs me. Why does such a person have to be viewed by you as a “dick”?

Why can’t the same product be priced the same for all people? How is it wrong or “dick”like behavior to ask for that?

[sopas ej]

Originally Posted by 10023

That’s not true of a market rate apartment. In fact landlords need to raise rent faster on market rate apartments to make up for the “headwind” from rent controlled apartments in a building/portfolio.

Rent control is not free. It transfers cost from tenants with rent controlled apartments to tenants with market rate apartments. It makes the latter more expensive, and by so doing actually increases the cost of city living for the middle class (who don’t qualify, but still struggle with housing costs in some cities).

If you live in a rent controlled apartment, then your neighbors are subsidizing your housing. If you run into them, thank them.

Not true. That's not how it works in California, anyway. Or rather, that's not how in works in the City of Los Angeles. Fifteen cities in California have rent-control laws (and presumably they all differ from each other in one way or another), and that number may go up in November if voters repeal the Costa-Hawkins Rental Housing Act of 1995.

In the City of LA, only buildings occupied and built before Oct. 1, 1978 have rent-control restrictions. If your rental unit is in an apartment building, a duplex, triplex, condo, built before that date, then it is rent-controlled. Even mobile homes in mobile home parks are covered.

Single-family houses are not covered. **Nor are affordable housing units or luxury apartments.** And of course, if any of the above was built after 10/1/1978, then it is not covered. But this may change if Costa-Hawkins is repealed.

Sources:

https://hcidla.lacity.org/What-is-Covered-under-the-RSO
https://la.curbed.com/2018/6/4/17302...es-rules-guide

So, going back to that hypothetical $1500/month rental from the OP, if it's in an older property, it could hypothetically be $1500/month for a while. Rent does not always increase every year if the property owner is nice (there was a period when my rent didn't increase for 3 years, but I don't live in the City of Los Angeles), and if it's in a rent-controlled qualifying building, it can only go up every year by 3 to 8 percent (it depends on the CPI).

So, one can say rent control does benefit the people in the lower middle/middle/upper middle. I'll reiterate, in Los Angeles, rent control does not apply to affordable housing units or luxury apartments. So neighbors are not subsidizing other neighbors in the same building.

[Crawford]

At least in the case of NYC, rent control has almost nothing to do with affordable housing, unless you're just broadly talking state interventions in the RE market.

Rent control is a legacy of WW2 housing freeze laws and not directly tied to income in almost all cases (there is a luxury decontrol clause for very high incomes over multiple years when rents cross the $2,500 threshold, but rarely invoked, even for celebrities) and affordable housing is subsidized housing provided based on income, and subject to annual income verifications.

Both policies distort the market and are probably more bad than good, but, at least in the case of NYC, have zero chance of going away. No politician would dare threaten either powerful constituency; that would be the end of their careers.

[Crawford]

Originally Posted by the urban politician

In other words, if I'm paying $1500 for a product that a person who is "poor" is paying $600 for, then what's the point of trying?

This issue has been settled, at least in NYC. Many (most?) larger new buildings contain a share of subsidized units, so there are plenty of people with (say) $5 million apartments living in the same building as heavily subsidized folks.

Probably this doesn't appeal to some folks, but I haven't heard any developer pushback. The kind of people who think "eww, subsidized housing" probably want a home in the suburbs anyways.

Also, keep in mind these aren't "welfare queens" or anything. They can make well upwards of 100k and are rigorously screened. They're probably mostly professionals these days. It's just that their unit is below market and tied to income, and they happened to win a housing lottery.

[Crawford]

Originally Posted by dave8721

Also in theory, maybe that 1500 he is paying would have been 1200 but the landlord had to charge 1500 to make up money they are not making from the one only paying 600 while they still have a building to maintain and pay taxes on it.

As an aside, does rent control exist anywhere in the US outside of NY and California? I am not sure if I remember Boston having it from my time there.

Boston had it, but got rid of it maybe 15 years ago. DC has it. Rent control is also common in suburban NYC (LI, Westchester, SW CT, NJ). Outside of CA, DC and within 60 miles or so of Times Square, I don't think it exists anywhere else in U.S.

[MonkeyRonin]

Originally Posted by dave8721

Also in theory, maybe that 1500 he is paying would have been 1200 but the landlord had to charge 1500 to make up money they are not making from the one only paying 600 while they still have a building to maintain and pay taxes on it.

It's not ideal, for sure; but even less ideal would be for renters to have no security on their home and have to contend with the constant possibility of eviction or homelessness should they face a sudden rent increase above than they can afford or would be willing to pay.

We make many of these sorts of compromises as part of living in a civilized society, and in this case, it's been decided that the rights of the incumbent tenant to be secure in their apartment trump the rights of the prospective tenant to pay a lesser rent.

[Jonesy55]

Rent controls for new tenancies were abolished in the UK in the late 1980s. For private sector rentals (around 20% of all housing) a landlord can charge whatever somebody will pay, of course there are below market rate rentals available outside the private sector (around 15% of all housing) but there can be long waiting lists for those properties especially in expensive areas.

The government pays Housing Benefit to low income households to help with rental costs in both private and non-private sector rentals, they spend almost £25bn ($32.5bn) on that each year and some 4.5m households receive some Housing Benefit or of around 26m total households. I guess there's a real danger that paying that money actually increases rents, it might be more beneficial just to spend £25bn a year on building new homes for affordable rents in the public sector.