Comment by Retric
2 years ago
The statewide number is simply a maximum not a statewide standard.
In San Francisco, rent in rent-controlled apartments can only be raised by 2.6% per year. Which is far more impactful.
2 years ago
The statewide number is simply a maximum not a statewide standard.
In San Francisco, rent in rent-controlled apartments can only be raised by 2.6% per year. Which is far more impactful.
I’d guess that the vast majority of California renters are in big cities, where 3% rent control is typical. You get stuck after a year or two, unable to move without leaving the state, and landlords exploit this by neglecting repairs (i.e. lead, mold, asbestos). There is a pretty big range of “livable conditions” which I’ve experienced as a renter. So the divide between rich and poor (owner and renter) increases and the only socially acceptable solution it seems is yimbism, which seems to mean “increase the number of landlords until the problem disappears.” Or outright communism, where the state is the landlord, which has a history of failure.
> where 3% rent control is typical
> landlords exploit this by neglecting repairs
To be fair, if rent can never go up more than 3% per year, how long until the landlord can't afford to do any repairs?
Property tax goes up 2% every year, so there's only 1% headroom. If some other expense starts to go up wildly (such as insurance has been doing for years now) it can eat that up and then the landlord is losing money every month, which leads to abandoned maintenance. Which isn't good for anyone.
In Los Angeles, it seems to be 4% per year + and additional 1% per covered utility. In addition, the controls only apply to older units. This 3% average in major cities in CA notion is a floating assumption without any hard analysis backing it as far as I've read. https://la.lawsoup.org/legal-guides/tenant-renter/rent-contr...
The property tax increase is at a max of 2% cap, it has not been a full 2% most years in my experience (anecdotally in my area).
Property tax is a finite fraction of a landlords costs, it could go up by 3% and the headroom exists on the rest of their expenses.
Further if all expenses increase by 3%, then profit also increases by 3%. With decades of inflation well below 3% landlords weren’t having issues affording repairs, they simply weren’t getting the maximum benefit from the area’s prosperity increasing.
The US has major issues with the state as landlord but other counties pull it off fairly well. That suggests me it’s the US that has the problem not the approach of having the government involved that’s at issue.
The US seems to default to doing the worst possible solution. Take long term rent control and private ownership, because like seriously WTF??? That’s literally combining the worst aspects of communism and capitalism.
Other countries that pull it off do so in extremely YIMBY ways: they simply build enough housing that market rents fall.
This debate over "public housing" vs "more landlords" is kind of dumb; both operate by increasing the supply of housing and rely on fundamental market factors to work.