[rayiner]

> I find it completely distasteful the number of laws that prevent other entities from passing laws in certain domains. Washington state has a law that prevents cities from legislating any form of rent control.

Are you serious? Rent control laws are awful, destroy the incentive to maintain housing stock or build new housing stock, and ultimately raise rents for everyone except the lucky few who can get rent controlled apartments.

Municipalities are just organs of the state, and state legislatures are entirely justified in preventing them from enacting myopic legislation.

[anigbrowl]

I'm with you on rent control, but states banning municipalities from owning their own broadband networks is at least as myopic. Thea rgument is that publicly owned utilities crowd out competition, but we have abundant evidence for the argument that (unlike typical residential rent markets) utility markets are dominated by oligopolies who are easily able to engage in anti-competitive behaviors without having to form a cartel. Sure, in theory Comcast and AT&T might offer such competitive discounts/service upgrades that they cross some threshold and trigger an all-out price war that would be good for consumers, but I'd put the odds on that actually happening at close to zero.

Now I'm not such a big fan of municipal legislation - as a European, I think American democracy may be too decentralized and exacerbate the public choice problem, but I don't see a clear organizing principle that will only prevent economically bad legislation while allowing economically good legislation. The proposals to ban municipal or county internet services in North Carolina are just as mypopic as rent control laws in many Californian cities.

[AnthonyMouse]

> Now I'm not such a big fan of municipal legislation - as a European, I think American democracy may be too decentralized and exacerbate the public choice problem, but I don't see a clear organizing principle that will only prevent economically bad legislation while allowing economically good legislation.

Operating utilities (especially last mile internet) at the municipal level makes much better sense than federalizing it. The transit market is sufficiently competitive that there is no need for the last mile operator to own a national network. Meanwhile with a national network operator, if the service is unusually terrible in a specific city there is nothing that city's residents can do about it because even when they're all in agreement they don't have enough votes to move the needle at the federal level.

And then you can have laboratories of democracy: If one city funds their network entirely through subscription fees and another funds it entirely through property taxes then maybe we discover that one works much better and other cities can start doing that.

[encoderer]

Honestly I think you're way off base on rent control. I'd love to know what experiences you've had with rent control that have led you to such a negative POV? Perhaps living in Philly, as you profile mentions, has blunted you to some of the benefits of RC in housing-crunched cities.

The biggest fallacy I hear from people who don't live in one of these housing-crunched cities is the line.. everyone except the lucky few who can get rent controlled apartments. Rent control laws in SF, for example, are very inclusive. I mean, RC apartments can't be both rare AND pervasive enough to "destroy the incentive" to invest in housing, right? And every RC law I know of (which is only a few) has exemptions for new construction. In SF it's anything built after ~1980. In NYC I know it's back much further than that. So it doesn't do anything specifically to depress new construction.

Fundamentally, the question is do tenants have rights or are they at the mercy of the property rights of the building owner? In SF we believe tenants DO have rights. And you know what? RE investors here, where a rent controlled 2br apartment will set you back at least $3k a month in the city, are doing quite alright. They don't seem too desperately in need of expanded protections under the law.

[cbr]

    everyone except the lucky few who can get
    rent controlled apartments

No, that's not the problem. As you say, rent control can't be both pervasive and rare at the same time. The real problems with rent control are:

* It's hard to move. Say you change jobs and now work in a different part of the city, or your kids move out, or you'd like to move in with a partner. Normally one of the benefits of renting is that you can move, but with rent control that means switching to a place that's much more expensive.

* Landlords benefit from having their long-time tenants leave. Without rent control landlords love long term tenants because they're reliable and they mean less work finding people for the apartment. Rent control reverses this, and the landlord loses the incentive to upgrade the apartment and otherwise keep the tenant happy. Yes, the landlord is being a jerk when they do it, but sometimes the best fix for widespread jerk-ness is changing the incentives.

* It keeps out outsiders. People who want to live in your city enough that they're willing to give up their existing local connections and start over in your city are really valuable, and rent control means they pay a lot more than people who've lived in the city longer.

* It depresses new construction. Yes, I know new buildings aren't subject to rent control, but in a place where everything is already built out you can't put up a new building without taking down an old one. Rent control means you either have legal restrictions saying you can't replace buildings, or you have protests against people doing this and displacing existing tenants. But in a growing city, without new construction housing is going to get more and more expensive.

* Rent control puts off dealing with the problem of housing costs. If everyone in SF rented, and everyone had to pay market rates, then there would be the political backing for changes that would make housing more affordable. Rent control means that the long-time community members who would be best at this political change don't really feel much urgency because they have nice cheap places with rents set a decade or two ago. (But to be fair, homeownership is also a problem here, because rents and property values move together and homeowners want their property to become more valuable.)

    RE investors here, where a rent controlled 2br apartment
    will set you back at least $3k a month in the city, are
    doing quite alright. They don't seem too desperately in
    need of expanded protections under the law.

Rent control hurts renters. I don't care about real estate investors. That $3k isn't why we need rent control, it's because we have rent control.

[binarycrusader]

  Rent control reverses this, and the landlord loses the
  incentive to upgrade the apartment and otherwise keep the
  tenant happy.

I'll stop you right there; while that may be what happens in theory, it certainly hasn't seemed that way to me in practice.

Perhaps in a market where there is sufficient supply for demand, but in a market where demand is sufficiently high, many property owners don't do more than what is legally required and keep raising their rents.

You would not believe some of the dumps I've been shown by smiling realtors or owners that wanted thousands of dollars per month -- I'm talking about $2500+ a month for a two-bedroom apartment with boarded-over holes in Windows, holes in walls, a terrible smell and carpet that looks like it was last replaced decades ago.

Time after time, the pattern I've seen from experience in the Bay Area has been that owners will do whatever the market will bear -- in a market with severely constrained supply, the market is forced to bear quite a bit.

[andy_ppp]

    If everyone in SF rented, and everyone had to pay market rates, then there 
    would be the political backing for changes that would make housing more 
    affordable.

This is demonstrably not true in London where rent just keeps on going up and hardly any new housing is being built. For example, an MP has just resigned his £130k+ (total remuneration, that's $215'000) job because he can't afford to rent a 4 bedroom house anywhere near Westminster [1].

Sometimes the state just needs to step in and actually help people (by directly building high quality housing and selling it to people below market value). Currently if you buy a new build in London it is priced so high that you can expect it to be under water for a few years (the builders provide special mortgages because banks refuse to do them directly in many cases - the flats are not worth what they are being sold for).

[1] http://www.theguardian.com/politics/2014/aug/11/tory-foreign...

[cbr]

    This is demonstrably not true in London where rent
    just keeps on going up and hardly any new housing
    is being built.

http://www.london.gov.uk/priorities/housing-land/renting-hom... claims only a quarter of people in london rent? So the "if everyone rented" bit isn't being met. Because property values and rents mostly move together, as long as most people own their homes you have more people backing policies that push them higher than lower.

I don't know the London political situation very well: what makes it so expensive to build new units? Are there strict historical preservation laws? Rules that let neighbors veto or slow nearby construction? Permits and taxes?

    He can't afford to rent a 4 bedroom house
    anywhere near Westminster

"Anywhere near Westminster" apparently means "within walking distance". A 30min public transit commute covers areas where renting a 4br would be ~£26/year.

    you can expect it to be under water for a few years

I'm not sure what you mean by this. You're saying if you build a flat and sell it then people are buying them at prices at which they wouldn't be able to resell them? Is this just because there's a premium for new construction? (Cars in the US, for example, lose ~20% of their value when they're bought for the first time because they stop being "new". So you could say that if you buy a new car you expect to be "under water" at first, but no one would say that.)

[encoderer]

You've clearly given this a lot of thought, but we are at odds with one another. I hate point-by-point refutation, but just a few thoughts I have...

All of your points are predicated on the notion that rents would decline if you eliminated RC. I think that's... hopeful. I mean, in some places you seem to suggest that landlords are beset by low rents (not improving the place because of it, hoping their longstanding renters move out). So certainly all of those landlords would raise rents. And non-RC units will, what? Reduce their prices to equalize the market? I doubt that. And now you have higher rents all over the city. And that's good for people? Because it might spur more development? But development is slow and favors up-market construction.

And blaming lack of development on the tenant-displacement laws that are part of rent control? And suggesting that rent control is the problem is a farce. If it's these laws that are the problem, why not write a post assailing THEM? And rent control laws are the reason people protest these developments? Really?

Being hard to move... ok... so go tell the family that you're raising their rent so that they'll get used to paying market rate. That way they'll be able to move anywhere they want! What a great deal for them!

I know for some reason you think rents will go down. That developers will build new buildings at high expense in this seismic-zone and then undercut the existing market (of old buildings with tiny rooms and few modern amenities), ignoring the fact that if they build up-market they can write leases at $50/sqft and have no trouble renting out the entire building well before it's finished.

Finally, if you actually read rent control laws, you'll see that they are not these cartoonish works of absurd leftist ideology, they do make carve-outs and exceptions for capital improvements and other large expenses to be passed-thru as bigger rent increases to the tenants. They are surely not perfect but property owners are a very powerful bloc and their voices are heard in the law IMO.

[sitkack]

Yep totally serious. Cite your claims if you have them. Municipalities have plenty of competing laws to dis/incentivize housing stock. We have buildings that haven't been updated in 30-50 years raising the rate of a studio apartment from 850 to 1250 in the span of a month.

Libertarian nerds aren't the only people in society.