The Rich Love Rent Control
Brace yourselves. Liberals are about to discover that price controls always -- always -- benefit the rich. Even in San Francisco. From SFGate:
Well-to-do people are taking advantage of the city's long-protected practice of limiting rent increases to preserve affordable housing by using their cheap apartments as weekend getaways.
Attorney Andrew Zacks represents landlords who work with the city to push out these cheaters. He says these tenants are cynically playing the system.
"You have this class of very rich, elite people benefiting from rent control," he said. "They have a good deal on a $500 or $800 place on Nob Hill and they use it as a pied-a-terre when they come into the city."
I know. You're shocked, right? What to do? Well, they're trying to enforce the rules -- but that's the trouble with complicated price control schemes: it's an invitation for an unwieldy rule book:
...when the law was enacted a certain percentage of renters said, "OK, you caught me," and moved out. But not all of them. Because it is both expensive and difficult to prove residency, some renters think it is worth a fight.
"The burden of proof is on the landlord," said Zacks. "We almost always hire a private investigator, which costs several thousand dollars."
As an example, Zacks has a case that involves a couple who own a condominium in Hawaii and have enrolled their children in school there, but wanted rent protection for a single-family residence in the Richmond District that they have rented since 1987. The landlord, who felt he had evidence the two were living full-time in Hawaii, wanted to increase the rent by $1,500 a month to $3,600.
Zacks' client won the case, but only after two appeals, $50,000 in legal costs and four years of wrangling.
How about this for a solution? Let the market set the rents. Let the market set prices. Then you won't need to hire lawyers and private investigators.
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Comments:
May '12
Re: The Rich Love Rent Control
Does the California State Legislature have to declare an Emergency Housing Shortage every year the way they do in New York State?
Jul '11
Re: The Rich Love Rent Control
You're asking for logic in SF? I'll believe that will happen when a transgender something or other gets down on one traditional knee in the white house to ask another something or other to marry him, her, or something.
Mar '11
Re: The Rich Love Rent Control
Oh, for the love of John von Neumann. If you create a system, you've created a game. If you create a game, somebody is going to play it.
May '12
Re: The Rich Love Rent Control
The problem with this is that it presumes that Liberals actually believe in private property and the markets that determine the value of that private property. That Libs via the state can intervene and limit how, when, and what one can do with your own private property means that you really don't own it. If Rent Control laws mean that you can't be justly compensated for owning property well, you really don't fully own that property.
I hate to go all 'Glenn Beck' and see this as further evidence of some sinister Communist conspiracy, but from the Communist Manifesto itself(chapter 2);
"In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property."
Edited on June 18, 2012 at 11:51pmDec '11
Re: The Rich Love Rent Control
Rob:
You should have mentioned New York City where the most egregious assaults on the free market occur. Rent control has all but restricted residency there to the very poor or the very rich.
Upper middle/middle class existence? Aspiring young college grads trying to find an affordable studio in which to live? C'est impossible because rent control takes many properties off the market and unproductively skews the system of supply and demand.
Jun '10
Re: The Rich Love Rent Control
I guess I'll be the one to issue the requisite advice for this topic. "Refer to Thomas Sowell."
Dec '11
Re: The Rich Love Rent Control
You beat me to the punch, sir.
Edited on June 19, 2012 at 1:20amMay '10
Re: The Rich Love Rent Control
Funny, on the way home tonight I was listening to Jonah Goldberg's 'Tyranny of Cliches', and it was the chapter titles "Let Them Eat Cake". In it Jonah* talks of the infamous saying and its questionable sourcing, but also about how much liberal do-gooding often goes wrong. Rent Control is one of the prime examples....
* Jonah is also the narrator of the audiobook version of his tome, which is awesome. No one else could do it justice....
Feb '12
Re: The Rich Love Rent Control
Might as well make it a trifecta, Thomas Sowell gets it right again in basic economics
Mar '11
Re: The Rich Love Rent Control
This is absolutely outrageous! Why Mr. Long are you indeed claiming that rent control is at best some adolescent scheme where by those of leftists inclination grind away at the middle class, property rights psh, while they pat themselves on the back for their virtue? and at worst is nothing more than an opportunity for those with connections and insider knowledge to enrich themselves?!
For shame sir, for shame. Perhaps you need remedial education bagging groceries at your local Whole Foods. Some time spent fighting to ensure your wages are sent to union fellows who are striving to look out on your behalf may teach you the proper attitude.
Mar '11
Re: The Rich Love Rent Control
Was talking with a friend here in SF over the weekend. Professional woman in her 40s. Has worked in sales for software companies for years and so likely has a very good 200k+ salary with lots of benefits. Also was a part of a startup back in the dot.com days and did well then (although could have gotten caught in the downturn).
In talking with her, it came out that she's spending $900 for her apartment. Which to many outside of SF is outrageous but given the going rate for a 1-bedroom in a nice area is $2500+, it's a bargain. But to think that a landlord is subsidizing her by just under 20k a year is maddening.
Other stories like that abound -- a person in a 3 bedroom place all her own (after her roommates moved out) leaving two rooms off the market. I can understand maybe a 4-year contract term on a rental price but to have it indefinitely should be unconstitutional. And instead of putting the burden on landlords to support the elderly or disabled (protected housing classes), there should be a tax on each renter to cover the costs.
Nov '10
Re: The Rich Love Rent Control
SFTechGuy:
Other stories like that abound -- a person in a 3 bedroom place all her own (after her roommates moved out) leaving two rooms off the market. I can understand maybe a 4-year contract term on a rental price but to have it indefinitely should be unconstitutional. And instead of putting the burden on landlords to support the elderly or disabled (protected housing classes), there should be a tax on each renter to cover the costs.
I don't get why this is a big deal. The landlord gets his money one way or the other; if a person wants to pay for more than they need, what is the trouble? Might be kind of a jerk move, sure, but is there anything really ethically or morally wrong there?
Also, why wouldn't a landlord want a part-time tenant, if they are paying for full-time? Again, they get their money either way. Also, I would think this would actually cost the owner less: less wear-and-tear, less cost for utilities, less complaints, less bother.
Re: The Rich Love Rent Control
SFTechGuy:
Other stories like that abound -- a person in a 3 bedroom place all her own (after her roommates moved out) leaving two rooms off the market. I can understand maybe a 4-year contract term on a rental price but to have it indefinitely should be unconstitutional. And instead of putting the burden on landlords to support the elderly or disabled (protected housing classes), there should be a tax on each renter to cover the costs.
I moved to SF with a roommate in early 2010, and we found a nice 2 bedroom in Pac Heights that we could afford with our entry level salaries. But the vacant units in our building are now going for $3800/mo (which is an increase of 65%, for those wanting to know what we pay)! As a free marketeer, I'm staunchly opposed to rent control. At the same time, I've really benefited from the policy. Not that that makes it right....
Re: The Rich Love Rent Control
TheRoyalFamily
SFTechGuy:
Other stories like that abound -- a person in a 3 bedroom place all her own (after her roommates moved out) leaving two rooms off the market. I can understand maybe a 4-year contract term on a rental price but to have it indefinitely should be unconstitutional.
The landlord gets his money one way or the other; if a person wants to pay for more than they need, what is the trouble? Might be kind of a jerk move, sure, but is there anything really ethically or morally wrong there?
To provide an extreme example, let's pretend the market rate for a 3-room apartment in SF in 1970 was $100/month. The market rate for that same apartment is now $5,000/month, but because of rent control, the squatting tenant who's been there since 1970 only pays $100, depriving the owner of $4900. So no, the owner is not getting her money one way or the other.
I wouldn't say the tenant is doing anything immoral — he's just playing the game and looking after his own interests. But the government that institutes such a policy certainly is.
Nov '10
Re: The Rich Love Rent Control
Diane Ellis, Ed.
TheRoyalFamily
SFTechGuy:
Other stories like that abound -- a person in a 3 bedroom place all her own (after her roommates moved out) leaving two rooms off the market. I can understand maybe a 4-year contract term on a rental price but to have it indefinitely should be unconstitutional.
The landlord gets his money one way or the other; if a person wants to pay for more than they need, what is the trouble? Might be kind of a jerk move, sure, but is there anything really ethically or morally wrong there?
To provide an extreme example, let's pretend the market rate for a 3-room apartment in SF in 1970 was $100/month. The market rate for that same apartment is now $5,000/month, but because of rent control, the squatting tenant who's been there since 1970 only pays $100, depriving the owner of $4900. So no, the owner is not getting her money one way or the other.
OK, so I was misunderstanding what rent control is (or at least what part of it is). I can certainly see that as being more than a little troublesome for landlords.