Sure, there is a housing marketplace, which can provide some correction. But houses are also homes. People are born in them. People die in them. They love them, they cherish them, they fight for them. There's a lot of truth in the saying, "Home is where the heart is."

What you're missing in that scenario is the large number of people who are displaced not just from their fungible, replaceable housing unit, but their home, their neighborhood, their family, and perhaps their city and their job.

Note also there are substantial class issues in the sentence, "Lower income renters move out, higher income families move in." The notion that poor people should take it on the chin because rich people covet their homes is not politically neutral. One could just as well say that it's the rich people, more able to cope, that should bear the burden of market fluctuations.

So I don't think, "is rent control even a good idea" is the right question. It's more like, "Are there more effective ways than rent control to reduce the harm?"

You can't legislate life into some gentle state. It is what it is. You can, however, smooth out the bumps.

Unfortunately, rent control does the exact opposite. It creates stupidity like this. Where a landlord has to use a lawyer to increase the rent 4X, which is insane on a number of levels. That is one hell of a bump in the road.

Get rid of rent control and prices will be stable. Yes, they will be higher for some, lower for others, but they'll be stable.

So you don't believe laws against crime?

You can use the same argument for any good or service.

None of the things you mentioned have the universality of a home, which strikes almost everyone, regardless of demographic. Those who aren't adversely affected by not having a home are notable for being extreme outliers. As wpietri said, housing is not a normal good.

Rent control or not, the law of supply and demand still applies; it just expresses itself in more dysfunctional and unproductive ways.

That's the problem with rent control. Reasonable people can disagree about whether the public policy goal of getting people affordable housing trumps the rights of property owners. But they can't disagree about how many digits are in pi, or about whether rent control works. It doesn't work. It harms everyone in the market except for a lucky subset of tenants.

Without rent control, I'm pretty sure that a LOT more people would be pushed out of San Francisco. It seems to me that places like San Francisco, New York, and a few other places are not typical of what other areas experience. I know it's fashionable amongst the libertarian set to blame problems on regulation, but there is much more going on here than simple rent control.

http://techcrunch.com/2014/04/14/sf-housing/

Rent control isn't the answer, though. More housing is.

San Francisco's problem seems to be that they can't possibly build enough housing to meet market demands without revising zoning restrictions in ways that would make current home owners angry.

Still, I submit that fears of extending rent control to new construction add to the problems caused by zoning.

Are you saying you think fewer people would live in SF without rent control?

I would be totally cool with a city deciding to make the first tradeoff as a public policy goal, if the construction stagnation (across all rates) could be mitigated. Have there been any successful experiments in that area (I'm only familiar with the craziness of NYC's implementation)?

[1]: http://www.sftu.org/rentcontrol.html

As an aside, pi is a fixed constant, whereas 'rent control' is an incredibly complex concept that relies on many other complex concepts - for example, what does 'rent control' mean in a communist country? For a nomadic tribe? It relies on certain concepts around property ownership and capitalism. Which is fine to say it doesn't work as it is in SF, I'm just pointing out that there's a lot more flex in the concept than in the constant 'pi' :)

Owners risk their capital and defer their own consumption. The renters preserve their flexibility and get more house than they could have afforded to buy and avoid losing their shirts in housing busts.

Sounds like a win-win to me.

Ah, but if you can use the power of the state to give you the economy of renting with the rights of owning, without those annoying responsibilities, then you've really got something!

You know the single best way to reduce violent crime? It is to increase wealth, people don't risk bodily harm if they have enough money to eat and sleep under a roof.

Type in "econometrics of rent control" into your search engine.

It's a fairly well studied question with a fairly consistent conclusion.

We don't need to argue about this. Rent control has been removed from many communities, and the rent becomes much more volatile without the stabilization control.

There's lots of actual case study literature on this.

These things aren't mere untested hypothesis where our personal politics come in to play - they are well studied.

I really think you should look into the research. There's a lot of tested hypothesis and survey analysis in them.

We tend to not treat economics like a science - as if our general education is enough to have an informed opinion. We certainly don't do that with psychology, chemistry, biology, or even softer sciences like sociology and anthropology.

But yet, when it comes to economics, we all have a pretty solid opinion and think we are all fairly well informed.

I encourage you to look deeper into the topic. Attend proseminars at your local university. Watch some graduate level lectures online. And, this is just an encouragement, revisit statistics and calculus --- you'll find out why if you look into 21st century econ.

As far as your other claims ... those are harder to measure really.

Rent amounts is a pretty easy number but things like lower quality (how much lower, what kind, where, is it predominant) and higher competition (amongst whom, using what process, which strategies aren't in play any more) ... well those are much harder questions. The microeconomic topic here is called Welfare economics: http://en.wikipedia.org/wiki/Welfare_economics and in economic theory is the social welfare function: http://en.wikipedia.org/wiki/Social_welfare_function

I'm not saying those broad ideas don't hold ... but defining things like quality and competition can be a much trickier business than price.

And unfortunately, if you are going to approach it as a science, you can't really go off anything other than definition, observation, and measurement.

I don't understand the point: none of those things are being torn away from people due to market forces.

Happened all the time a few years ago, and its the same situation. The interest rates rose, people couldn't afford their mortgage anymore and were forced out.

I'd bet real money that almost every applicant for one of these mortgages was reassured up, down, left, and right by the broker (whose interests were most definitely not aligned with the applicant's) that everything will be fine. "When the variable rate kicks in, you can just refinance. Rates will be lower than ever!"

Unfortunately, when one economic domino falls and sets of a chain reaction leading to a market crash, a lot of hard working and responsible people get caught up in and swept away by the ensuing tsunami.

Even if people are rational about this, the 1980s saw an increase of interest rates above and beyond 14%. If 1980s style stagflation ever hit today, I can assure you that even the "rational" home-buyers who fully understood the clauses would be forced out of their homes.

In any case, being forced out of your home, even if it is a situation you set yourself up for, is a traumatizing situation. I think we all can agree to that.

You can end up owing money without the ability to repay fairly easily due to to market forces.

If you have a judgement against you, in other words a court has determined that you owe somebody money, they can seize your property and auction it off to settle the debt. Cars, laptops, anything worth $$$ is a target.

Life can suck. You can't legislate the "suck" away. You can, however, smooth out the bumps. In the scenario above, bankruptcy is a legal construct to smooth out the bumps.

Unlike bankruptcy, rent control makes the bumps worse. That really sucks.

This logic taken to its conclusion brings us to some pretty disquieting places. Maybe SF should just build a lot more housing.

And who lives in the good parts of a city should not be determined solely by the depth of their pockets.

If we were to give houses to the people who worked hardest, every single immigrant construction worker I have met would get the houses, and comfortable office-dwellers like me would be out of luck.

San Francisco Marina which can't build out because of the Pacific. https://www.flickr.com/photos/telstar/15230469/

Tokyo Minato-ku (the "Harbor District") which can't build out because of the Pacific. http://www.realestate-tokyo.com/media/249559/Windows-Live-Wr...

(This is mildly unfair to SF, which actually has a higher population density than Minato-ku, principally because Minato-ku is not a residential neighborhood. But if SF was serious about affordable housing, it would look like Minato-ku rather than "miles of two-story buildings.")

That's kind of the point. The city has several conflicting goals: make it an affordable place to live, don't allow new growth to change the character of the place, attract high paying jobs, don't widen the roads, attract new residents without kicking out old ones, etc.

Rent control is one of the tools they use to try to balance between these conflicting goals. The fundamental problem is that every serious economist says that rent control is a losing battle, and it never truly works anywhere it's been tried. There really aren't any rent control success stories from anywhere in the world. At some point, the city has to realize it can't achieve its conflicting goals, and it will need to prioritize: is it more important to have affordable housing or more important to limit the number of places to live in the city?

If we assume that the NIMBY crowd will continue to block new development and other interests will continue to block increases to the high limits for new construction across much of the city, then what would elimination of rent control do, other than ensure that every renter in the city was paying ~$2500+/month per bedroom?

I have this idea that the monthly payments on the mortgages required to purchase a condo are a pretty good approximation of where rents would be without rent control. With pretty much every condo sale price sitting at or north of $1 million, it doesn't look pretty.

Perhaps this is a stupid idea. Thoughts?

However, looking at the original post, I strongly suspect that the landlord isn't planning to rent out the apartment after the tenant is evicted. I think the letter looks a lot more like a landlord trying to get out of the business. Rent control, and other regulations, discourage people from offering places for rent. Sometimes that is intentional, for instance, as a policy to get rid of tenements. But often it's a surprise to the people writing the regulations. They honestly don't realize that each additional form they want people to fill out discourages people from being in business in any way.

Getting rid of rent control would get rid of some of that disincentive and put some places back on the market.

I recently moved from the Reno area to the New York area (well, New Jersey; but I work in New York). I spent a lot of time in the Bay Area over the last few years. I really would like to see it stop pursuing economically backwards policies, but I think it's more likely that economically illiterate politicians will finally manage to kill what makes Silicon Valley unique, and people will move to other places.

When people pay $500 for something that could be rented out for $5000, they are more likely to keep it for weekend trips after they moved to LA, or at least not take any room mates.

Also, I don't know that there is any official numbers, but I've heard estimated that 10% of the SF rental stock is not rented out, because landlords don't find it worth the pain.

In the meantime, all rent control does is create an arms race between property owners and tenants, one the tenants will all gradually lose. It also eliminates incentives to renovate or even more productively use existing housing stock.

[1] http://www.sfrb.org/index.aspx?page=1036

It costs a fuckload of money, sure, but efficient cities are pretty much unimaginable without them (for now at least).

I can't blame them (SF-dwellers) they had someting rare in the US for a little time. And general ignorance in, general ignorance out, that's local municipal politics, due to short-term incentives and big "costs" of initiating any kind of change or shift to a longer term horizon, nothing will change fast enough, so a lot of people will get bitten by these problems.

New York City and London are cheaper than San Fransisco. And those two cities have _orders of magnitude_ more peoplel than San. Fran.

So... yeah. The rent is too damn high. Build more houses.

If we want to take housing seriously, let's start with a law that says "If the building is abandoned for 5 years, you lose it, it becomes housing."

Edit: typo

The real answer tends to be building enough housing for everyone. That also tends to be politically unpalatable, because the people with all the emotional attachments want their neighborhoods frozen in amber. So low-income people get pushed out by increasing rent and high-income people move in.

Pick your poison, really.

Taking away someone's home involves potentially massive negative externalities (emotional and otherwise). Therefore, if you want to maintain the political theater that says capitalism is designed to benefit everyone, you have to accept that it may be preferable, optimal in fact, to incur some deadweight loss. Rent control is one strategy that does just that: as long as a person lives in a place, the rent can't go up.

Is it naively optimal? Nope. But it is (or can be, if you get the implementation right) actually optimal. It is a guarantee that a house can be a home, if the tenant so chooses, and it could be used to balance the aforementioned negative externalities.

Does it? Who knows, maybe, I'm not familiar enough with San Francisco's housing laws. Just because they implemented it poorly doesn't mean the concept is unsound or irrational and it doesn't mean that anyone in favor of the concept is "silly" or deserves to be condescended.

I didn't call anyone silly. I said the idea that economics cease to apply because strong emotions and italic fonts are involved is silly.

Is a place "home" to you? You're probably willing to pay for it. Don't like a place much? You'll be less willing to spend.

This runs out after a point, though. Warm fuzzies are great, but I can't eat them, wear them, or sleep under them. I also can't trade warm fuzzies for any things I can do those with.

I am misunderstanding your point?

Edit: I think I understand, my degrees in economics so I assumed you were using the term as its used in economics. Apparently you were not.

That said, I don't think a rental can ever be a home in the way you describe it. The fact that the property is owned by another party means the resident will always be limited in their sense of place during their tenancy. This example is egregious but as an example, there's nothing to force a landlord to rebuild a property with after a disaster for the tenant with the insurance money.

So, after a few years, rent control effectively guarantees that no apartment is available at an affordable price. At least, you have to live in a controlled apartment for a few years for inflation to erode the value of money you send your landlord every month enough that you can feel like the apartment is affordable. And, of course, the people moving from one rent controlled apartment to another are affected by the market distortion as much as anyone else.

And places all over the world manage to provide affordable housing without rent control, so long as they allow their housing markets to work.

People should disclose if they have an interest in this thread, since last I remember, all landlords are pretty wealthy people without that problem. (they own their place + other places, so, yeah)

That's already how it's supposed to work.

Many of these are externalities - they're born by people who are not party to the transaction itself. For example, if one of your best employees is priced out of the city where your office is, then you need to find a replacement in a hurry. Replacing a key employee can sometimes cost as much as their yearly salary (this is why the recruiting industry exists, and why startups can get "acquihired" for a million or so per engineer). If the employee has a long tenure and lots of domain knowledge, they may actually be irreplaceable, and their loss could permanently damage the business.

The cynic in me wonders if the reason we have rent control isn't to protect tenants, it's because one powerful constituency (employers) is pitted against another (landlords) and the former is currently more powerful.

I'm not familiar with the history of SF's rent-control laws, but in Copenhagen another motivation is stability, though. Beyond simply the hassle of moving, there was a decision some decades ago (probably about a century at this point) that it should be possible for people to choose to live somewhere long-term, organize their life around that assumption, customize the space within reason, etc., and not worry that they will be forced to move constantly because of fickle landlords and markets. Rent-control laws and anti-eviction laws (which aren't quite the same, since a landlord might want to evict for reasons unrelated to rental prices) aimed at that stability, so a tenant who has lived in a place for at least 3 years generally has something like "tenure" in the place, protected against both rent increases and eviction.

Now you might say: if you want that kind of stability, you should buy rather than rent. But at least here, the concept of individually owned condos didn't exist until recently. Real-estate was a system of land ownership, along with any improvements on the land. So you could own some land with a house on it, or some land with a 5-story apartment building on it, but you couldn't own only the left half of the 4th floor of a building. You could rent use of that portion of the building, but you couldn't own a floating piece of the building. (Condo ownership now exists, but it really is an odd kind of real estate, since it comes with no land, and your unit is so heavily structurally coupled to neighboring units, that normal decisions regarding real estate, like choosing to build or demolish structures, can't really be exercised.)

Obviously your average worker couldn't buy an entire apartment building, so almost all of the urban working class rented. This system of rental stability was then developed to provide housing stability for them. (There are alternatives also in use, which arguably work better. The two main ones are cooperatively-structured housing, where residents jointly own their own building through a system of shares; and association-owned housing, where an organization such as a union or philanthropic society owns housing and rents it to their members, or to the public, on generally favorable terms.)

In California, this exists for certain kinds of evictions. The Ellis Act is much-loathed anyway.

The basic problem in SF is that many decades of very, very strong rent control and building restrictions are colliding with an economic boom.

Agreed, the tenant likely has many bases for recovering any and all costs associated with a move.

When did the owner provide notice that they would attempt to evade rent-control? The tenant has a reasonable assumption that a rent-controlled lease will remain rent-controlled indefinitely.

To get your 10x cheaper location, you aren't looking at RTP, but maybe Cambodia (though much of the south feels like a developing country to me...they still aren't that cheap).

But, that doesn't make it a fun process to go through for a renter. It sucks. Couldn't the owner just ask the person who is renting the unit to move out in a reasonable amount of time? That seems like the ethical thing to do.

California has a provision for doing this. It's called the Ellis Act and San Francisco's regulations for Ellis Act evictions require payment of $5k-$15k + $3k per senior/disabled tenant. This remodel + rent increase seems a transparent attempt to circumvent that law. Whether legal or not would require a lawyer to weigh in.

Assuming the original $2145 is below market, the answer would be no, wouldn't it? Or, rather, they could ask, but the tenant would never willingly leave, as they are paying below market.

You're missing the fact that rent won't go down -- at least not by much, because living in San Francisco will remain desirable for enough people who are willing to pay very high rents. Only the very wealthy, or those who bought in a long time ago, would be able to live in San Francisco.

Of course, this is increasingly the case anyway. And one could make the case that this is an acceptable outcome. I (like many) believe that it's unacceptable, but this is debatable.

Fix the supply and the rent takes care of itself.

I personally cannot fathom why one place can be son much more expensive than another. Sure, there is a price differential, but is SF really that much better than Brimingham, or Durham, or Albany?

Besides, if you want to be the master of your destiny and put a root down, buy. Renting is a tool for when you cannot afford to buy yet, or for when you are on the move. It's greatest strength is that it lets you up and move. I never understood why you would rent the same place for more than a few years. If you plan on staying, buy. If you cannot afford to buy, why are you staying in this place?

If you're a certain type of person, yes. Miles better.

You have rows and rows of blocks catering to specialty commerces, astounding, world-class food for ridiculously reasonable prices that can't be obtained anywhere else, a huge amount of access to employers and jobs that are also nonexistant outside of a few large cities. You don't need car ownership; you're trivially close to international airports, and the cultural scene is, once again, not available in smaller cities.

Having spent almost all my life in large cities, the suburbs are just terrible boring, even if your place to live is 5x bigger.

Obviously if you like the outdoors that situation may be very different, but not all suburbs and small cities have access to outdoors recreation, and not all big cities are that far away from excellent parks.

To give just one example, I tried signing up for improv comedy lessons --- and I found that my teachers were among the best in the world, and that they had a range of lessons available ranging from beginner to master. In Columbia, there were beginner lessons only, and then the instructor flaked on us -- so now there is nothing.

From my perspective (30s, single), paying SF rent was the best investment I ever met. In SC I do indeed own my home --- but I find myself saving half my salary, not because I am either unusually well off or frugal, but rather because there is nothing I terribly want to spend money on.

Everyone blames the owners or some lawyer when a protected tenant becomes unprotected. The blame lies in the law that built up an artificial wall around the tenant and protected them from the market.

Rent control creates shortages, sub-standard properties and illegal tenancies. It should be abolished anywhere it exists.

Rent control is one of the small number of policies that economists on the left and right are essentially unanimous (93% in a survey of US economists; 95% in a survey of Canadian ones) in agreeing are always harmful, because they reduce both the quality and quantity of housing available.

It's not even some vague hypothetical either: In the linked story, the rent control laws have resulted in the conversion of a multi-tenant building into a single-family dwelling, which is a reduction in the number of housing units in the city. A reduction in the quantity supplied will, of course, lead to an increase in the equalibrium price. And the high equilibrium price is both why Follingstad's eviction is so painful, and why they were (effectively) evicted in the first place.

It's a textbook example of Why Rent Control Hurts Everyone, in one compact little story.

Remember, according to the link, the landlord has gone through some efforts to make this hard to challenge, including legally changing the status of the building to single-family. That's a very difficult process[1], but the reverse is even harder. (If converting single family dwellings into multi-tenant units was easy, San Francisco wouldn't have much of a housing crisis.)

Given the huge legal obstacles, plus the fact they already removed the bathroom and kitchen (not cheap), plus given the already strong trend of multi-unit dwellings being converted into single-unit dwellings to fuel demand from the rich, it seems unlikely that this building is going to be multi-tenant any time in the foreseeable future.

(Unless the landlord screwed up and didn't get the paperwork done. In which case they won't be able to raise the rent. But that doesn't seem to be the case.)

[1]: http://www.quora.com/How-hard-is-it-to-get-a-duplex-or-set-o...

Not everyone can easily pack up and just move. People are social beings, they have commitments, children and probably a place where they have some sort of personal connection.

So... there aren't a lot of other choices.

Knock it down and don't jack the rent ~300%?

From a human right perspective, I am not sure I agree that a person have the right to live at the same place forever as long as he maintain the same income just because he used to live there. Maybe a couple of years but it shouldn't be forever.

Let me put it this way: the rents dropped sharply when rent regulation finally ended in my country. After 15 years of doomsayer horror stories from the left how unregulated rents would make the poor homeless, it turned out, within a year, that the exact opposite was happening.

No. This is the philosophy that put our economy in the shitter in the first place. More government regulations, please.

Let the owner give adequate notice to vacate (where I live it's 60 days notice without cause). But the rent-control limitation stays on that land parcel for some period of time after a new building is constructed on the site. Don't want to rent it? No problems.

> Newly moved in renters realize that they are paying 10x as much as the rest of the country, leave. Rent goes down

People have a limited ability to live a certain distance away from work - an hour, sure - two, ... okay but that's pushing it. Three? Well now half your waking day is spent commuting. Four? You're probably not driving because you need to sleep.

Property owners who're assholes will continue to push rental prices up (which is what we're seeing in OPs example) to "what the market will bear". Meaning people who're willing to live in some shithole on ramen and minimal lighting and heat for >half their wage can live within a reasonable distance of their workplace.

All so some asshole (which is probably a company), can make more money. Great for the rich.

Ummm... yeah, that's why I bought the place. That's why I took the risk on the investment. That's why I deal with all of the administration. That's why I keep it up to code. So... now I have to rent it for 25% market value? I'll find any way I can out of that situation, and no, it doesn't make me an asshole.

Listen, there's no reason why all the landlords across SF need to raise rents. They do it because they want more money, and know that demand is so high and that the high income earners in the area can afford it, and that there are enough of those types of people to keep the market going, at least for a while.

And, to be frank, I could keep affording an apartment in SF even if it got much worse than it is now. But I wouldn't want to live here. The thought of living in a place populated by only the rich is entirely unpalatable to me. The idea of lining the pockets of people who are displacing families and individuals who have been living in SF for years and decades... that's disgusting. After a while, if things don't get better, I'll give up and move somewhere else, and give my rental money to people more deserving. I'll be sad to leave, but will realize that the city I love has already left me.

That's why I bust my hump working a day job as well as building assets in my spare time; so that someday my investments pay my way with little effort on my end. I am indeed in it to make money; I have no interest in running self-subsidized housing. There's nothing morally wrong with charging market value. It's not that I have no empathy for these people, but circumstances change for a variety of reasons and we all have to adapt. Neighborhoods change over time; rent control won't stop that. My investment finally paid off and you want me to run a charity.

I'm sorry that doesn't jive with your political/world outlook, but that doesn't make me a bad person. There are pros and cons to any economic system, but apparently capitalism is not for you. That's fine, just drop the holier than thou attitude.

How do you define market value?

Because for some landlords it seems to be the highest value that someone will pay to live there.

Taken as a collective action - that results in rents continually going up beyond wages.

I don't know all the circumstances behind the OP's rent increase - but an ~8x increase seems pretty astounding. Were rental prices left untouched for decades? Was there some major increase in the cost of maintaining the property or land? Has the landlord made significant investments in the facilities or amenities?

> My investment finally paid off and you want me to run a charity.

So, can you see any room between asking landlords not to be assholes about squeezing tenants for every last cent, and running a charity?

That's what I'm asking for - I understand you've put in some risk, you've worked hard to earn money. But your tenants are working hard too.

In many cities there's a huge (and growing) demand for properties that are within some reasonable distance to places of employment.

Landlords collectively driving up prices beyond wages and other costs results in a huge flow of wealth from the working class to the wealthy. This means someone on what would elsewhere be a fantastic wage, is at best mediocre. Those on lower wages may find they're having to share rooms and eat ramen two hours away from work well into their adult lives just to survive.

Is it a zero-labor investment? Fuck no. But, due to the city's completely batshit insane zoning laws and the militant NIMBY contingent you (as a landlord) are guaranteed an income that increases far more quickly than the cost of maintaining it.

It is for this reason that most landlords in absurdly high-demand areas get no love or sympathy whatsoever.

I want to be rich someday, too. But I don't want to be rich knowing that I directly made the lives of other people harder in doing so. I don't think wealth and capitalism has to be a zero-sum game; I don't believe that for me to become richer, someone else must become poorer.

All this is precisely why we don't have absolute property ownership rights. We as a society have collectively agreed that land is a limited, public asset, and we're willing to allow people to own it, and receive some benefits from the state, but also have to follow some rules that serve the public's interest... like not kicking people to the curb out of greed. If you own land, then you should know this already: it's not "yours" in the absolute sense. It's an investment, to be sure, but your return on that investment can be limited by law in some cases. This is just one way in how that shakes out.

I'm sorry that doesn't jive with your political/world outlook, but that doesn't make me a bad person. There are pros and cons to any economic system, but apparently capitalism is not for you.

I'm not going to try to define "good person" or "bad person", but I will say that the idea of evicting someone from their home (and sometimes city) because their landlord sees dollar signs in their eyes is just reprehensible to me. That doesn't put me at odds with capitalism; I think that just makes me human.

The exact reason why we have legal limitations to property rights in these cases is to require that landowners sacrifice some of their disposable income for the benefit of others -- and the benefit of the public good. I think the law has the intent correct, there, even if the implementation of it leaves something to be desired.

So.. it doesn't make landlords assholes or evil, but its not like there wasnt a class issue. The only reason why this thread explodes is because the wealth difference is getting bigger and bigger.

So every lease becomes a lifetime deal. Hmm. Since rent keeps going up, this means prices are going to have to go up dramatically now so that I'm not completely hosed in ten to twenty years. After all, rent control increase caps are pretty much always below property tax increase caps.

Long-term, me-the-landlord is going to be put in a situation where rent doesn't even cover taxes. Nevermind repairs, maintenance, and insurance.

> You think it's ok to do something that will benefit your bank account but will simultaneously force someone to move out of their home?

Huh. I guess evictions for non-payment are out now. After all, it's their home, and it would be evil for me to evict someone from their home just for the sake of my bank account...

Between this and your previous point, you've made an excellent case that a moral and ethical person who owns property in SF would refuse to rent it under any circumstances. Well done.

> Enriching yourself at the expense of others is an asshole move, to me at least.

Are you aware that you just defined turning a profit as an asshole move? Perhaps you want to rethink your definition.

Nowhere did I say that, and I'll thank you to not put words in my mouth.

Actually, interestingly, you've now also defined profit as a zero-sum game across society. For some to be enriched, others must falter and be brought lower. If that's what profit is, then yes, I do believe profit is an asshole move. (But I don't think that's what profit is!)

It's entirely possible for landlords to raise rents in such a way that continues to cover their costs, continues to provide a tidy profit margin, but does not displace tenants. That's why I said it's possible to maintain your current profit (which you could consider a fixed dollar amount or a percentage, and my argument still holds) and did NOT say maintain your current rent.

OK. What nuance of your stated position did I mistake? In what way do you make a profit and enrich yourself without it coming at the expense of another? Bear in mind that trading something of yours for money from someone else is very literally a trade taking place at their expense - they are spending money.

> It's entirely possible for landlords to raise rents in such a way that continues to cover their costs, continues to provide a tidy profit margin, but does not displace tenants.

Not when prop 13 caps are generally higher than rent control caps. Over time, a property-owner will lose ground and their margin will shrink as their costs increase faster than their incomes.

In practice, this manifests as landlords deciding not to invest in the upkeep and maintenance so they can preserve their profit margins.

I don't believe we're talking about rent control here, or at least not exclusively. The original article is about someone's rent increasing by over 400%. I can't imagine how that could be justified by cost increases on the landlord's side.

I'm not arguing that the current system of rent control and property tax increase limits is working properly and is the best way to do things.

At any rate, you're re-framing the argument here to try to make me look bad. Your original question asked about landlords making 10x of their existing profit. If the landlord is already making a profit (which was the premise of your question), clearly they're not having issues making money in a rent-control+prop 13 environment. There are many multipliers between 0x and 10x, and I would argue that the responsible multiplier in order to maintain non-asshole status is well below 10... and even well below 1... but certainly greater than 0.

Just to be clear, though, to reiterate my initial point and make my position clear: if you're making a $500 profit off a $2000 monthly rental, and decide that you can and should make $5000 (a 10x increase in profit) by raising the rent to $7000, if that's at the expense of the renter's ability to pay... yes, it is my opinion that you're an asshole. That is the original question you asked, and that's the question I answered.

Tough. If your tenant isn't doing anything that you can evict them for, that's too bad for you as the landlord. When a landlord rents out his property as a home for another, that property becomes the lessee's castle. In all but a very few aspects, that property is now effectively the lessee's to use in any and all ways that comport with their leasing agreement.

> What if the landlord wants somewhere for their aging grandmother to live so they can care for her?

In California, there is a legal way to do this. It's one of the ways that the Ellis Act permits landlords to evict rent-controlled tenants.

The Ellis Act is a pretty fair and just law. It recognizes that landlords are human, and might have real reasons to get out of the property rental market. (Or that they might need to use their only rental unit to house themselves and their family.) It also recognizes that some all-too-human landlords do try to maximize their profit margins despite the very real damage that they would do to the lives of others.

And pretty much everywhere, you also have the option of increasing their rent to get them to want to move out. Like has happened here.

> The Ellis Act is a pretty fair and just law.

Really? Because if I walk outside and ask around, I'm pretty sure I'm going to be told that it's inherently evil and abusive and needs to be repealed, because a lease should be a lifetime contract for a locked-in low rate.

Of course it does! A big part of whether or not someone is an asshole is about intent.

What if the landlord wants somewhere for their aging grandmother to live so they can care for her? Would that still make them an asshole? I suspect you'll say yes, because they're looking to push someone out of their home.

The Ellis Act provides for landlords who want to take a property off the rental market, so this sort of thing actually is explicitly allowed by law. I think this is a tough thing, because yes, you are pushing someone out of a home, but I think it's a good balance of property ownership rights vs. the public good, as you're saying you want to do something completely different with the property, rather than just finding a way to do the exact same thing but line your pockets more.

Maybe the tenant has caused so many headaches that it's not worth putting up with them for the profit anymore.

The problem with this sort of reasoning is that it's subjective. A landlord could decide that a tenant is a "headache" because the plumbing in the building is terrible and the toilet keeps flooding the bathroom for no reason, and the tenant has decided to withhold a portion of rent until it's fixed. Should the landlord be allowed to evict the tenant because of that? I'd say no. But if the "headache" is that the tenant is constantly violating quiet-time rules and waking people up, then maybe repeated behavior of that sort should be grounds for eviction.

For this sort of thing I'd want the law to stay out of it. A signed lease is a contract between landlord and tenant; enumerate the "headaches" that will lead to eviction. Of course there's room for interpretation, but let the lawyers and courts deal with that.

OK. Then what is it? What's your happy medium, where you are getting money from someone, providing something in exchange, and making a profit without enriching yourself at their expense?

I don't think the exact number is all that important, but there's likely a range of acceptable values for different landlords, properties, and tenants. My position is that a 10x or even 1x increase is crazy and throws the public interest out the window.

When it comes to housing, people tend to buy/rent as much as they think they can afford (and sometimes more). You can argue that this is foolish (and I'd agree!), but that's the reality of the situation. Even doubling someone's rent would likely be catastrophic for their finances. The idea that landowners should be allowed to extract every bit of profit possible out of land -- a public, limited good -- no matter what the consequences, is absolutely reprehensible to me.

And this idea has led to strict rent control, which in turn has led to NIMBYism, which together have led to the clusterfuck that is San Francisco's housing market. Privileged groups act first and foremost to preserve their privilege, and rent control works by creating a privileged group. Hilarity ensues.

You said you wanted to gain in understanding. I think you should internalize that before going on. It's critical to the whole issue.

In short, you need to consider that attempting to put your ideals into policy may have resulted in creating the problems you fear.

That's an excellent point and is something I'll try to reflect on.

Do we just not care about that person?

But I'd rather be able to care about both people. I'd rather SF's planning process wasn't so idiotic that it's impossible to build at the rate we need to in order to house everyone who wants to live here, at whatever economic level. I'd rather that rent control hadn't helped to foster a culture of NIMBYism that causes all new projects to get shot down, drastically scaled down, or at best delayed several years.

The main priority in getting ourselves out of this housing crisis should be to build like crazy, and accept that neighborhoods will change, and the city will change. Once we've done that, and demand has stabilized, we can do things like eliminate or drastically scale back rent control, or at least make it more sane. But for now I believe it's necessary to avoid screwing people over.

What's been noted repeatedly across history is that rent control tends strongly to encourage a culture of NIMBYIsm. Rent control has contributed heavily to creating the current situation and its persistence increases the political resistance to building more housing.

Have you not noticed the routine grumbling about extending rent control to new housing and different kinds of housing? That scares the crap out of would-be builders and investers. Couple that with moralizing about how profit margins need to be razor-thin to be morally acceptable, and the scenarios you imagine are ones in which no developer is willing to work.

The result is pretty much what we have now - not enough building. If rent control were relaxed now, or even made hugely more difficult to extend, those fears would be reduced.

But right now? Rent control has created a witch's brew for political stasis. That's what you wanted, right? To enable privilege for people who are deserving by virtue of living in sufficiently old housing?

Not at all. But that's what we have now. It's easy to say "we shouldn't have done it this way", but simply removing tenant protections isn't going to solve the problem: it's just going to put all the power in the hands of landlords and builders... and of course they're going to abuse that power.

Existing rent control[1] isn't causing a lack of building. A city-enforced lack of building is causing a lack of building. Both the city planning committee and the NIMBY crowd just don't want things to change. On that, I completely agree with you.

Couple that with moralizing about how profit margins need to be razor-thin to be morally acceptable, and the scenarios you imagine are ones in which no developer is willing to work.

It's give and take. I'm not advocating for razor-thin profit margins, and I'm getting a little weary of you suggesting that my position is that the only alternative to the crazy rent increases are no rent increases at all. There has to be a happy medium somewhere, where landlords can increase their profit without driving people out.

[1] For the record, I am not in favor of expanding rent control, but I do believe we're at least temporarily stuck with the rent control we have now. Killing the existing rent control without first drastically increasing the housing supply (coupled with finding a way to allow landlords to raise rents without requiring that their tenants move away) would absolutely destroy lower-income renters.

Also, you should probably address harryh's excellent question about everyone else. Preferably with something other than an assertion of privilege.

As a landlord, deciding to raise rent on your units a modest amount, instead of a financially crippling amount, does not put you in a position to be "pushed out" than landlords who choose to be greedy.

Your costs have not increased such that you need to charge your tenant more than what they can afford. With prop 13, property tax increases are capped, the cost of public utilities that a landlord often takes on (like trash and water) don't increase that much year-over-year, and neither does the cost of contractors to maintain the property. Any increases are in-line with non-housing-related cost of living increases.

So what I don't understand about your statement is that you seem to assert that other landlords behaving like assholes somehow causes non-asshole landlords to be unable to maintain their properties and thus have to make the uncomfortable choice between either becoming assholes, or selling their properties to assholes and leaving. That doesn't seem to make sense unless somehow the cost of maintaining properties has started rising by more than single-digit percentage points per year, which doesn't make sense.

Let's assume that property maintenance somehow increases in cost by 5% per year (which I think is at the high end). The apartment in question here would be covered by a $73/mo rent increase. While that's not nothing to most renters, I think it could be considered a reasonable increase, and something that probably wouldn't break the bank. But the apartment in question isn't getting its rent raised by 5%, or even 10%. It's getting raised by 315%. There's no possible way anyone could ever believe that it costs anywhere remotely close to 315% more to maintain that property this year than it did last year.

Remember, we're not talking about profit here. We're just talking about the idea that you're pushing, that only charging a rent increase of 5% will put a landlord out of business, and that somehow the only way to stay in business is to "do what everyone else is doing" and raise rents by much higher numbers. If that's somehow true, I would love to see numbers that suggest that, because it sounds like an outrageous claim to me.

Also, you should probably address harryh's excellent question about everyone else. Preferably with something other than an assertion of privilege.

I find it interesting that you bring up the concept of privilege, as I believe landowners to be a particularly high-privilege group, especially when compared to many of the people who have been losing their homes over the past couple years.

Regardless, I agree that it's an excellent question, and I've already replied. If you feel my response is lacking, please reply to it and I'll try to clarify my position better. I'm really just trying to understand and provide my perspective, and possibly learn a bit in the process.

This specific case the tenant raised prices to boot an renter under rent control so its really just a perversion of the rent control law (and another great example of how it doesnt work). When the answer to regulation is more regulation you start seeing an infinite loop. Laws developed -> entrapenuers figure a way around them -> new laws created -> new loopholes found -> repeat

I'll start by saying that I do believe that capitalism is pretty much the best we have right now, and has allowed for greater prosperity than other economic systems up to this point.

However, I do think that the public good needs to be taken into account and act as a balance for capitalism sometimes. Housing is a good example for this, as I don't believe the public good is served by allowing property owners to charge as much as they can. Call that socialist if you want; so be it... I do have some socialist leanings.

If we were to repeal rent control tomorrow, rents would shoot up across the board. Formerly rent-controlled apartments would see their rents go up like crazy. Formerly non-rent-controlled apartments might see rent increases slow, but they would almost certainly not drop, at least not for a year or two. Demand is still high (and is still getting higher), and the bay area increasingly houses people who really want to live in SF, and are able to afford higher rents. SF is limited in land area, so, without a massive increase in the housing supply, we're limited in population expansion. With the average & median rent increasing, many people at the low end will be displaced. SF will become a place where only high earners can live, which means most service workers will need to move out of the city and be bused in, or drive, or just fail to find jobs due to lack of transportation options.

That last bit is an example of why I think the public good needs to (through regulation) balance out capitalism sometimes. Lower-income people being unable to live in SF is IMO a bad thing. Increasing the number of cars/buses on the road is a bad thing; causing people to live farther away from their jobs is economically wasteful. Also note that many of the high-income people moving into SF in this scenario will be moving to SF while keeping their peninsula/south bay jobs, further increasing the commute problem.

Definitely agree that regulation and new laws do sometimes form a feedback loop as unintended consequences and loopholes are discovered. But I don't think that's an excuse not to try, because a lightly- or un-regulated market is not going to help, either.

Bluntly, this is naive. More importantly, it does exactly nothing to actually help address the problems at hand. All it does is give you a way to shake your head and make clucking noises as you feel morally superior.

A few years ago, I would have listened to you and probably even agreed. These days, I'm more interested in solutions than I am in moralizing.

> I'm really just trying to understand and provide my perspective, and possibly learn a bit in the process.

Judging by your furious responses and insistence on labeling anyone making a sizable profit as an asshole, I'd say the only one of those goals you're meeting is the one of providing your perspective. Which is to say that landlords are assholes. Thanks. How about something helpful now?

So what do we do to address the problem at hand? It sounds like you'd advocate for a repeal of rent control, because landlords should be able to extract all the profit they can from their properties? That's not going to fix the housing supply issue; all it's going to do is turn SF into a rich-people-only city where service workers need to live elsewhere and get bused in every day. That's not a place I want to live, and would be a direct result of "market forces" -- but not really, because government regulation nullifies market forces in many cases. Rent control is only one part of it... prop 13 and the city's byzantine planning process are others, and there are certainly more.

So, looking for suggestions? Here's what we do:

1. Gut the city's construction planning process. Make it more objective and based on zoning laws and building codes, as well as continuing to include provisions for low-income housing. Raise (and in some areas eliminate) building-height restrictions. Also, residents in the area no longer get a veto on new construction projects. As long as a building proposal follows the rules, it gets a rubber stamp. No discussion.

2. Repeal prop 13 for rental properties, and only allow it to apply to an owner's primary residence (obviously this is more difficult since prop 13 is state and not city law). This recognizes that owning a home gives you an illiquid asset, and fluctuations in property taxes (especially in an area like SF with strongly rising property values) can cause people to need to move. Homeownership should at least still offer that kind of security.

3. Repeal rent control city-wide and replace it with a gov't subsidy tied to renters' income. This subsidy can be funded with extra tax revenue from #2, and can likely be phased out over several years as rents stabilize and drop. I expect that rents will initially rise, but will start to lower again after a year or two under the new rules, and even more after a few more years as #1 reduces (and hopefully eliminates) the deficit in the housing supply. The (temporary) subsidy protects existing tenants until there's enough housing to support people of any economic status.

4. This is more subjective, but: make it more attractive for landlords to buy out their tenants (or just keep them) than to use shady practices like finding reclassification loopholes and bullying by doing the bare minimum required by law to maintain their properties. I'm not sure of the exact mechanisms to do this, but incentives should be aligned so that landlords want to keep good, steady, reliable tenants, even if new tenants might net them some extra cash. Basically we want to create an environment where landlords are mostly happy to keep their current tenants, but while tenants are also not afraid of the prospect of needing to move.

Is that helpful enough?

Where did all this 'profit is evil' talk come from anyway? This is a site dedicated to startups and tech talk, and all of a sudden we have activist student slogans passing for comment?

In reality, in most transactions, both parties profit due to the fact that there is no fixed concept of "worth."

The apple that you bought from your grocer for 50 cents was valued at 40 cents by him and 60 cents by you.

Without it you'd never bother to buy anything because you would gain no value from the transaction.

Maybe the real life numbers are 45, 50 & 55. Maybe they're 34, 37 & 50. Maybe you really fucking love apples and it's 34, 37 & 5000 in which case go nuts, buy up the whole orchard, and keep all the doctors away for all time.

Maybe those numbers aren't even close because what exactly does an apple cost these days I don't even know exactly.

But the point holds. There is a price at which the transactions happens. Somewhere below that is the producer willingness to sell. The difference between those numbers is the producer surplus. Somewhere above the price is the consumer willingness to pay. The difference between that number and the price is the consumer surplus.

Go find any economics 101 textbook in the known world and you'll have a downward sloping demand curve, and an upward sloping supply curve. They intersect at a market price. Then you get some shaded in areas for the producer and consumer surplus.

If you don't know what one of these graphs looks like then you aren't qualified to participate in any discussion ever about what things should cost. Just shut up and go back to writing shitty software using the worst programming language in general use today.

Supply/demand curves are literally 4th grade curriculum where I come from. So yeah, mastered that shit 20+ years ago. Thanks for assuming though.

You've gone off the rails and are now confusing 'cost' with 'worth' or 'value'. We can only determine a 'value' or 'worth' when an actual transaction occurs. You can't just extrapolate out on a model curve and expect it to hold in the real world, no matter what your theory tells you.

Bottom line is, if a grocer is currently asking 40 cents for an apple, I will transact at that price no matter how much higher I 'value' that apple. I wouldn't pay 60 cents for an apple that a grocer is selling for 40 cents. I wouldn't pay 50 cents for it either.

BTW, ECMAScript is poised to take over the world. Better strap in.