patrick.net

People here are complaining about problems with the rent control system as implemented, not the notion of rent control itself.

No. The very idea of rent control itself --like price controls-- is an anathema to efficiently functioning open markets. Unless there is some sort of Mafia-esque cartel colluding together, eliminating competition and thus creating a genuine supply constraint, LLs cannot arbitrarily charge more than market rate forever.

If you implement rent control, then who gets to decide what constitutes a "fair market rent"? Is it LL carrying unit costs + 5%, +0%, -5%...? And what about inflation? Do LLs that only recently bought their property (at a much higher cost-basis) get to charge a lot more per SFT vs. long-time owners (that have far lower carrying costs)? Can a committee price rents more "fairly" or "accurately" than open markets?

Prop. 13 was voted in 30 years ago, supposedly to try to make property taxes here more "fair" and "protect" poor, old grandmas from the mean, nasty tax man. And look how well that's worked out for California...

Prop. 13 was voted in 30 years ago, supposedly to try to make property taxes here more “fair” and “protect” poor, old grandmas from the mean, nasty tax man. And look how well that’s worked out for California…

Actually, it's worked out great for established Californians.

For non-established Californians, like children, people who move here, etc - not so great.

When you are hungry, anything edible tastes good. The path to gourmet bliss is paved with starvation.

I saw a show on anorexia on HBO - apparently after a certain point, you don't get hungry anymore. So... that's not really true to a certain point.

From WSJ:
But Chief Executive Officer Michael Geoghegan defended his company's decision to offer subprime loans. "This is not trailer park lending," he said, claiming the typical HSBC Finance customer has average household income of $83,000 and a home worth $190,000.

Uh... where are HSBC's customers that they have incomes of $83k, and homes of $190k? A 2.3x ratio?

Can I move there?

efficiently functioning open markets.

Elevating 'markets' as the be-all and end-all is just a discourse in itself. Who says what is even 'efficiently functioning'? This whole frame of reference and meta-narrative can be critiqued to death, and often is, on a very many levels.

Were the conditions in Paris just prior to the French Revolution an efficient market? Probably they were. People were starving, however, bread was too expensive, and aristocrats ignored them to their detriment.

One argument put forward to the existence of the welfare state in the 20th C. was that if govts didn't address poverty at least a little, communist solutions would look more and more attractive to the population, and more revolutions would inevitably ensue. With the demise of Russia and China, and the threat gone, there will be more calls to wind back welfare such as family benefits and health care.

Unless there is some sort of Mafia-esque cartel colluding together, eliminating competition and thus creating a genuine supply constraint, LLs cannot arbitrarily charge more than market rate forever.

Effectively there *is* a Mafia-esque cartel colluding together, using asymetrical power arrangements and arbitrary ownership to oppress others. These arguments are operating too much inside the square for my liking, there is just too much self-referentiality and failure to see what's going on, in terms of exploitation and conflict theory. Just who is benefitting from this system exactly, that is the question you need to ask...

Prop. 13 was voted in 30 years ago, supposedly to try to make property taxes here more “fair” and “protect” poor, old grandmas from the mean, nasty tax man. And look how well that’s worked out for California…

As I said, implementation has to be thought out carefully...

Effectively there *is* a Mafia-esque cartel colluding together, using asymetrical power arrangements and arbitrary ownership to oppress others.

If this is true, then good luck with imposing rent control. Anyone who proposes or even vocally supports such controls will probably wind up dead in a ditch.

I saw a show on anorexia on HBO - apparently after a certain point, you don’t get hungry anymore.

I'm trying to reach that point, to shed a few pounds... nachos always look too good tho, and I start hallucinating about food...

HARM Says:
If this is true, then good luck with imposing rent control. Anyone who proposes or even vocally supports such controls will probably wind up dead in a ditch.

But you've got them. There's loads of rent control in NYC... What's wrong with a decent social settlement with reduced uncertainty?

What’s wrong with a decent social settlement with reduced uncertainty?

Utopia! Wait, don't utopias usually have at least one fatal flaw?

don’t utopias usually have at least one fatal flaw?

no, then they're not utopias... our current system, tho, is highly unequal and inequitable, is ravaging the environment and consuming non-renewable resources apace, and causing a lot of unnecessary suffering...

You can make alot of money by listening to David Lereah; just do the exact opposite of what he says and you will prosper.

as i mentioned above Rent Control was deemed necessary. If you have a entire city of renters, you have high crime, low respect for the environment, wacky voting patterns, essentially you have NYC circa 1978.

Huh? Who "deemed" it necessary? Has it successfully worked its "affordability magic" and turned NYC from one of the least affordable places to the most affordable?

As far as "renter = polluting criminal" or "wacky voting patterns" goes, I'll leave that for the locals to deconstruct.

Has it successfully worked its “affordability magic” and turned NYC from one of the least affordable places to the most affordable?

well, it must be more affordable than it otherwise would be, surely...

That is an EXCELLENT reasoned argument in response to my earlier comment.

yes, it is. it's the content of modern social science studies. sorry if you're out of the loop...

Oh, I see that you ARE talking mostly about intellectual wanking, (with the possible exception of economics). In which case, I retract my earlier comment about data and scientific observation.

I've done both a science degree and an arts degree, and excelled at both. I value the content of the arts degree far more highly in terms of 'enlightenment'. Your background is unknown, and your comments are purely subjective now, and not worth disputing further, as you clearly know nothing about questioning the logicial positivist project, and critiques of modernist thought (in fact, you are unwittingly presenting such thought). Being a technologist only is extremely limiting in attempting to form a balanced world view. Technology gives you the ability to blow the crap out of Iraq for resources. Post-modernist theory allows you to critique the discourses and lies of patriotism and fear-mongering that took you there on a pretext.

it was a contingency of broader interests at the metro and state level. They had “determined” “that” RE “value” would be in decline should the situation continue, because it was actually detracting from the general job market. These interests were involved in the construction of the WTC. and yes it did work its magic, NYC was very prosperous during the 80s and 90s.

Shmend,

What is your control group here? Are you certain NYC in the 80s and 90s would not have been as "prosperous" w/out rent control? NYC has long been the financial banking hub of the U.S. (if not the world). How would this have been changed significantly (if at all) by the absence of rent control?

Aside from the ex-post facto guesstimations, who's to say the NYC rental market would not have eventually self-corrected due to the general lack of affordability (as we are now seeing happening in the CA, FL, AZ housing markets)?

Of course - that is one of the premier fields for intellectual hand-pulled noodles, so to speak.

that's a very informed and scientifically rational series of arguments you are making. i can see the benefit of all your training now...

People who want an absence of regulation usually have specific economic motives.

exactly. i just can't be bothered writing a critique outlining how it is always the vested interests who want 'free markets' and subsidised american farmers who want 'level playing fields' and so on and so forth. and the other million criticisms of free market ideology that have been made out there, all easily obtained...

The goal of players in a free market, as many economists have shown, is to put an end to the free market by eliminating all competition.

Right, cartels and monopolies are inherently anti-free-market. Which is why competition must be preserved with anti-trust, pro-market regulation. Since when does being anti-price/rent control automatically make one an anarchist and/or plutocrat apologist?

Efficient, transparent "free" markets are neither "naturally occurring" nor good for plutocrats and monopolies.

Hmm... why am arguing with a guy who just accused me of being retarded?

OpinionsPlease/MarinaPrime/ConfusedRealtor asked a thread or two ago about buying a condo at Resort at Squaw Creek. Well, that's a topic near and dear to my heart (the skiing, that is). If anyone think's it's a good time to buy in Tahoe, here's a relevant article from the usually rosy DQNews:

http://dqnews.com/RRCA2Home0207.shtm

"Steep Drop in Sales of California Vacation Homes"

We rented a lux condo at the new Squaw Village last Spring - top of the line finishes, right at the base in the Village, decent price. After staying, the owner offered to sell it to us below what he paid. No thank you, at least for now!

On some Bay Area Chinese immigrant blog sites, buying a house for occupation or investment is still a hot topic. I am not sure if they received the memo of the recent stock market crash, but as skibum said, they've never seen a serious crash in their entire life, so the current state of housing is perceived as the bottom. The most senior "Bay Area residents" came here in 1989 or 1990 as FOB students, so they had little memory of what happened back then. When they started shopping for a home, the market hit the bottom and it was all glamor story from that point onwards.

The working class (I think of anyone who needs a wage as working class, including myself) Chinese typically buy in MSJ and Sunnyvale (with Cupertino school district), more established immigrants from Hong Kong or Taiwan buy in Los Altos, Cupertino and Saratoga. You can find quite a few elected municipal leaders born in Hong Kong, Taiwan and India in Los Altos, Palo Alto, Cupertino and Saratoga, so that gives you an idea of where these ethnic groups are buying.

There is also substantial money laundering going on from corrupted funds in China, but these people typically park their dough in SoCal, San Marino, Palos Verdes, and to a lesser extent SF City.

Again, I don't think the support from immigrants alone are going to carry the south bay housing through rough times, but there will be lots of knife-catching initially because they are either aggressive compulsive savers, or are able to give up a lot for home ownership, or the combination of two. In the initial phase of a housing downturn, I expect to see a divergence in pricing, houses in good school districts keeping its level and houses in so-so or bad school districts going into a free fall.

Although I think the houses in good school districts will also fall in the end, the net net result will be a bigger divergence in housing price between the desirable and undesirable areas (or school districts), just a miniature reflection of what the US was going through after each housing bubble. If you look back in history, it seems that after series of economic recessions, the inland falls further and further behind with the coasts soaring higher and higher, the pricing differential between the Rich America and the Poor America is further amplified after each recession. Bay Area will follow exactly that pattern.

@SQT: ;-)

Different Sean Says:

i just can’t be bothered writing a critique outlining how it is always the vested interests who want ‘free markets’ and subsidised american farmers who want ‘level playing fields’ and so on and so forth.

DS,

Vested interests want anything BUT a "free market" or level playing field, which is preceisely why everyone ELSE should want one. Monopolies and cartels do NOT like competition or price/wage tranparency. Is the NAR lobbying in favor of Open-MLS or for fee-based commissions?

It looks like there is now a dinner bubble underway.

Is Kanye West saying something about the quality of New York Indian restaurants?

The housing market's crashing!

The stock market's crashing!

Gold's crashing!

...and I'm dancing in the streets singing, "la, la, laaaa..."

There is also substantial money laundering going on from corrupted funds in China, but these people typically park their dough in SoCal, San Marino, Palos Verdes, and to a lesser extent SF City.

I keep hearing a lot of scuttlebut about that... definitely more in SoCal, but here as well.

OO
On some Bay Area Chinese immigrant blog sites, buying a house for occupation or investment is still a hot topic.

Can you post a link?

go to www.mitbbs.com, and go search the SF local forum. mitbbs is the largest forum for mainland Chinese immigrants and students in the US. HK and Taiwan immigrants are much more disperse and well assimilated, so you probably can only find us on English speaking sites.

Does it stand for MIT the school?

eburbed,

I doubt it. The site is registered to someone in BA and the discussions are all over the place.

You're not missing too much contentwise.

OO,

I didn't dig too deeply but my short glimpse in suggests a site is crawling with FOBs who think entirely too well of themselves.

OP, you think YOU are frustrated? Talk to my realtor who saw my wife and I walk away from making an offer last month.

I doubt it. The site is registered to someone in BA and the discussions are all over the place. I didn’t dig too deeply but my short glimpse in suggests a site is crawling with FOBs who think entirely too well of themselves.

That's kind of why I thought that maybe MIT stands for the school. Just to make it "look better".

Here's a REAL question for people on the board...

If you had a chance to do a 'lease' option on a place you really liked in a neighborhood you really loved, where you had to put down 2.5% 'earnest' money, and had 1/5th of the rent for the time you would be there be added to the earnest money as part of the downpayment for when you bought the place.

Here's the 'hypothetical' :

A well kept up original owner selling his place for 950k, wants 25k earnest and charges 2500 a month rent of which 500 goes to the eventual downpayment, with a hard deadline of 'buying' in 2 years.

Your 'downside' is about 2.5%, in theory, but if you walk, you really are walking from 25k. The rent is comparable, so you're not losing money on 'overpaying' for the rental. If the market crashes, in 2 years you offer the fair market value, but he gets the 25k + 6k credit, plus all the rent you paid over the years.

OP, we didn't make the offer because I felt we were 'settling.' My wife REALLY wants a house, market be damned. But the place we almost offered on, we were settling for a house we knew was a little small in a neighborhood that wasn't exactly what we wanted, and in a school district that wasn't as good as we'd like. I just couldn't blow 3/4 of a million on 'settling' for a house, especially in a bubble. It involved a good deal of arguing and eventually kissing and makign up between me and my wife.

The site was started by someone who went to MIT, of course it has no connection with the school whatsoever.

SFBubblebuyer,

I have a problem of the strike price two years down the road. How do you set the price?

After all, you are not buying a stock, and if the transaction volume dries up in your neighborhood, you may not even be able to find a reasonable comparable. If you can agree on an objective yardstick that both sides can agree upon (for example, pegging the transaction price to the movement of DOW, or something like that), then it may not be a bad deal if you are uncertain about the housing movement in your target neighborhood in the defined time frame.

$25K is like an option you buy on the house. I suppose that you must be targeting some highly desirable neighborhoods where supply is rather limited. If you are just looking at some cookie-cutter burbs, then I would not pay the $25K.

Different Sean Says:

> How many LLs are prepared to sign leases restricting
> rent increases and making longer terms?

Most landlords will sign a longer lease if it makes sense for them. In areas of high turnover most landlords will give you a lower rent for a longer term lease, but in an area with increasing rents you will probably have to pay more to lock in a flat rent for multiple years.

> This particular apartment block was built ‘wholesale’
> by a developer years ago, before the boom,

What do you mean by “wholesale” (we don’t use that term to describe real estate in the US)?

> However, he wants to charge marginally *above* market
> rates right now because he thinks he can, at a time when
> rates are supposedly rising rapidly.

Unless a market is regulated by the government a landlord can’t get “above market” rents.

> This all goes back to my constant remarks in the past of
> what represents a fair and healthy social settlement.
> I have currently amassed about 6 emails from other
> tenants also protesting the steep rise.

You are better off trying to make a deal on your own, let the other 6 make their own deal.

> The fair social settlement notion is what underpins all rent
> control systems, and attempts to protect people from exactly
> this sort of behaviour.

What rent control does it give a small number of people a good deal at the expense of landlords and any new people that move to the city.

> Ironically, I suppose I’m from a family a little like FAB’s,
> who has amassed a pile of investment properties —
> I can move interstate and be given one at any time
> I like for almost nothing…

I don’t think you read that I have not taken a penny from my parents since my freshman year in college when they threatened to stop paying for college if I joined a fraternity to “goof off and drink beer” (and when I joined the fraternity they stopped giving me money). As a kid my parents didn’t make me pay for food but made me work at the rental properties for free. I never got an allowance and had to work outside the home if I wanted any money (they even made me pay for stamps when I wrote thank you notes after Christmas every year)…