What do you think about rent control/mandated affordable apartments?

[SIGSEGV]

Rather than capping rent increases, I wonder if a better instrument would be to cap the per-bedroom yearly profit of the owner (something similar to the Obamacare Medical Loss Ratio). Any rent in excess of this amount would be returned to the tenant. This would likely have to have some complicated formula (so that large apartment buildings probably would have different limits than people renting out their basement), but I think addresses the main problem (the appearance of greedy landlords cashing on on lack of development in certain areas).

[the urban politician]

Originally Posted by SIGSEGV

Rather than capping rent increases, I wonder if a better instrument would be to cap the per-bedroom yearly profit of the owner (something similar to the Obamacare Medical Loss Ratio). Any rent in excess of this amount would be returned to the tenant. This would likely have to have some complicated formula (so that large apartment buildings probably would have different limits than people renting out their basement), but I think addresses the main problem (the appearance of greedy landlords cashing on on lack of development in certain areas).

Wow, so in other words a great investment strategy would be to just be a tenant in a gentrifying neighborhood? But of course our lexicon doesn’t allow for the idea of “greedy tenants”. It’s still 1950 and all landlords are rich and all tenants are poor and helpless

[cannedairspray]

Originally Posted by the urban politician

I wasn’t aware that owning a building and deciding what a complete stranger who could possibly even be wealthier than you should pay to live in your building was immoral.

Did I say it was?

Originally Posted by the urban politician

Seems like it is the rent control advocates who are the ones labeling property owners as immoral, without ever really having made a sound case why that is so.

I don't care. I really don't. I just think it's interesting that you are finding the need to have to justify how you make a living. You're the guy whose signature used to say "Stop villainizing market rate housing", right? Just saying it seems like you have an ax to grind. I personally couldn't care either way.

[mhays]

Originally Posted by SIGSEGV

Rather than capping rent increases, I wonder if a better instrument would be to cap the per-bedroom yearly profit of the owner (something similar to the Obamacare Medical Loss Ratio). Any rent in excess of this amount would be returned to the tenant. This would likely have to have some complicated formula (so that large apartment buildings probably would have different limits than people renting out their basement), but I think addresses the main problem (the appearance of greedy landlords cashing on on lack of development in certain areas).

Why would anyone build if the stock market would be a better investment? The first result would be scarcity.

That's just one aspect of a really complicated scenario with a lot of variables. It sounds really similar to the same disastrous results of rent control.

[Pedestrian]

Originally Posted by SIGSEGV

Rather than capping rent increases, I wonder if a better instrument would be to cap the per-bedroom yearly profit of the owner (something similar to the Obamacare Medical Loss Ratio). Any rent in excess of this amount would be returned to the tenant. This would likely have to have some complicated formula (so that large apartment buildings probably would have different limits than people renting out their basement), but I think addresses the main problem (the appearance of greedy landlords cashing on on lack of development in certain areas).

Cap it how? Based on cash flow? A lot of the money from owning rental real estate comes from the capital gain when you sell it and that can only be (poorly) estimated until it is actually sold.

[lio45]

Originally Posted by cannedairspray

I'm as much for saying fuck the poor as the next guy, but OP are you just looking for a leg to stand on, morally, because you're a landlord?

I don't envy any landlord with lots of exposure to a market that would go from free to drastic rent stabilization measures (is that the OP's case in Chicago...?), but I can say that even though the latter can be annoying, if they're already in place when you start, then they're not much of a hindrance, as they will be factored into real estate prices just like anything else. And if you're smart enough to develop your own little tricks and techniques to work around (some of) them, then that's kind of the best of both worlds for you (i.e. getting greater cap rates than you otherwise would).

[cannedairspray]

I just mean it's clear that the conversation isn't really his overarching goal so much as "Hey guys, give me more things to say when people confront me about renting shit out at a premium". I have no problem with landlords, but the guy who had his signature talk about about market rate housing for so long making a thread where he's like "Hey, market rate housing is good and rent control is bad, right?" is kinda funny.

[SIGSEGV]

Originally Posted by Pedestrian

Cap it how? Based on cash flow? A lot of the money from owning rental real estate comes from the capital gain when you sell it and that can only be (poorly) estimated until it is actually sold.

Theoretically, the property tax assessments are already some crude measure of potential gains.

Anyway I wasn't thinking anything like including appreciation because that's too hard.Just costs = taxes +maintenance+any debt service related to the property. That's still a little funny because then properties bought for cash would have lower rents than properties bought with debt. Anyway, I'm not sure it would be a good idea but it could be more reasonable than rent control as implemented in SF.

[the urban politician]

^ I of course come into this discussion with an opinion. I'm not here to learn new arguments, I'm pretty confident in my position.

If anything, I partially started this thread to portray to liberals (and this forum remains a unilateral bastion of such) that this issue isn't nearly as simple as punishing a "greedy landlord". It's this dehumanizing of another person (in this case, a landlord) that ironically the left often accuses others of doing in many of their arguments.

[cannedairspray]

Originally Posted by the urban politician

If anything, I partially started this thread to portray to liberals (and this forum remains a unilateral bastion of such) that this issue isn't nearly as simple as punishing a "greedy landlord". It's this dehumanizing of another person (in this case, a landlord) that ironically the left often accuses others of doing in many of their arguments.

On this, we are in COMPLETE agreement. Like I said, I just found the messenger funny. Funny as in actually kinda , not that I thought it was wrong.

[Fresh]

Originally Posted by Northern Light

Let me suggest to you your interpretation doesn't work in some cities.

Let's take Toronto.

If you were earning minimum wage, full-time, as a single person, you would be earning $14 per hour.

This works out to about $28,000 CAD gross per year.

If we assume someone can afford up to 40% of their income on housing, that would mean such an earner should be able to find a place in Toronto for $933 per month.

Good luck w/that.

No matter how far your willing to move out, or how modest your standards are, there are virtually no apartments that price point.

So get a housemate.

I don't know about Toronto but here in Sydney if you were on minimum wage you wouldn't expect to be able to rent a place on your own unless you moved to the far, far distant suburbs - that's why you find a housemate.

[jtown,man]

Originally Posted by Fresh

So get a housemate.

I don't know about Toronto but here in Sydney if you were on minimum wage you wouldn't expect to be able to rent a place on your own unless you moved to the far, far distant suburbs - that's why you find a housemate.

Yeah, I've never understood the argument about the min wage and being able to live by oneself. If you graduate college, unless you are in a high-demand career path, be prepared to live meagerly until you gain skills.

If you earn min wage, be prepared to do the same. Get a gf or bf...roommates. Rent a room. You don't deserve your own place just because youre 18 or something. My first place was shared by 4 people! That's life. Now I share an apartment with my gf, which cuts my rent in half.

Life isn't meant to be easy making min wage, you either begin to earn more or change your lifestyle by living with more people, people have done this for ages but all a sudden it seems unfair or not right. Its not unfair or not right or right, it just is reality.

[Northern Light]

Originally Posted by jtown,man

Yeah, I've never understood the argument about the min wage and being able to live by oneself. If you graduate college, unless you are in a high-demand career path, be prepared to live meagerly until you gain skills.

If you earn min wage, be prepared to do the same. Get a gf or bf...roommates. Rent a room. You don't deserve your own place just because youre 18 or something. My first place was shared by 4 people! That's life. Now I share an apartment with my gf, which cuts my rent in half.

Life isn't meant to be easy making min wage, you either begin to earn more or change your lifestyle by living with more people, people have done this for ages but all a sudden it seems unfair or not right. Its not unfair or not right or right, it just is reality.

There is so much here to disagree with.

First off, lets set aside that this isn't a discussion about me, I'm long since quite comfortable.

I just haven't lost sight of what it is to struggle.

Moving on, with the proviso that you're working full-time, i see no reason that any person shouldn't be able to get their own place.

No one is suggesting ownership or luxury, but a modest, 1-bedroom apartment should not be beyond reach.

The idea that only teens or those living w/their parents earn minimum is simply not factual, and unreasonable.

You offer the alternative of living with a complete stranger in shared accommodation. I don't accept that as at all reasonable, particularly for an adult.

If someone wishes to do so and can find a willing partner, great for them.

But no one should have to do so.

Next time you go to McDs or the like, see how many seniors are working there. Take a another look at overnight shift and see how many people in their 20s or 30s are working.

There are people who for a variety of reasons will never end up in a high-skill, high-wage job; or for that matter one that is much above the minimum.

The notion that its simply a choice to go to school when you may not academically qualify or being able to afford it is really peculiar.

That's far more possible in Canada than in the US, yet we still have middle-age folks here working for minimum or close to it. (not that many, but still).

Further, the example I gave of a friend was one who did graduate HS and what we would call community college here, he's worked non-stop for 20 years, been promoted, and as I noted makes well above minimum.

But his income has increased only in line w/inflation in recent years, while the cost of rents in Toronto have shot up about 50% faster.

I would accept an argument that policy changes to promote wage-growth for middle, lower-middle, and low income earners would be preferable to rent control.

However, when those haven't been implemented, your stuck addressing the world as it is.

I would also accept that the real estate market by its nature is distorted in a world of global capital flows.

That measures to mitigate that, other than rent control, would be useful.

Again, it isn't really so, as such we have to help real people where they are.

***

One other quick note, lots of things are or were 'reality' that should never have been and shouldn't be now.

Slavery was once reality, society evolved away from that.

Streets were once open sewers, we evolved modern sanitation.

Most of the world had adopted minimum vacation times of four weeks or greater, that the US has not does not mean that 'reality' should be allowed to stand.

Likewise, people of modest means, but who work full-time or close to it, ought to be able to be self-sufficient, including having their own place, eating three healthy meals a day, access to good healthcare, proper clothing, and transportation etc.

I'm entirely negotiable on the 'how'. But not really on the 'whether'

[mhays]

That would be nice, but construction is expensive.

Ironically, the most basic reason is that construction workers and supplier workers need to make a living too.

[cannedairspray]

Originally Posted by jtown,man

Yeah, I've never understood the argument about the min wage and being able to live by oneself. If you graduate college, unless you are in a high-demand career path, be prepared to live meagerly until you gain skills.

If you earn min wage, be prepared to do the same. Get a gf or bf...roommates. Rent a room. You don't deserve your own place just because youre 18 or something. My first place was shared by 4 people! That's life. Now I share an apartment with my gf, which cuts my rent in half.

Life isn't meant to be easy making min wage, you either begin to earn more or change your lifestyle by living with more people, people have done this for ages but all a sudden it seems unfair or not right. Its not unfair or not right or right, it just is reality.

It's a very weird type of entitlement, I think. These people think most everything should be provided to them, really. A place to live, a job, the internet, etc.

[eschaton]

A couple years back I read an article which succinctly explained why - in a capitalist economy like ours - some form of rent assistance is needed.

Essentially, historically the market did provide for housing at all income levels. The problem is housing for low-income folks was slum housing. Early in the 20th century, these shantytowns were deathtraps. They were fire hazards, bred disease due to the lack of basic sanitation, and were often at risk of collapse at any moment. They posed a danger not only to their residents, but to cities as a whole.

As a result of public outcry over slum conditions, building codes were passed. This effectively set a minimum price that housing could be constructed for. As a result, the poor were no longer able to afford housing. Various forms of subsidies followed shortly thereafter.

As long as we make it illegal to construct new-construction slum housing, we will need subsidized housing.

Now, rent control is a different issue altogether. It's very popular in cities with a high proportion of renters. But it's a very inefficient way to try and deal with housing affordability, because not every long-time renter is low income, and not every low-income person is a long-time renter. Indeed, the very poor tend to, for various reasons, move around every 1-2 years, so such policies help the lower-middle class more than anything. One could actually argue they promote negative outcomes on the whole, insofar as they can make retirees stay in a high-cost area, instead of downsizing after retirement and freeing up their unit for someone of working age.

[jtown,man]

Originally Posted by Northern Light

There is so much here to disagree with.

First off, lets set aside that this isn't a discussion about me, I'm long since quite comfortable.

I just haven't lost sight of what it is to struggle.

Moving on, with the proviso that you're working full-time, i see no reason that any person shouldn't be able to get their own place.

No one is suggesting ownership or luxury, but a modest, 1-bedroom apartment should not be beyond reach.

The idea that only teens or those living w/their parents earn minimum is simply not factual, and unreasonable.

You offer the alternative of living with a complete stranger in shared accommodation. I don't accept that as at all reasonable, particularly for an adult.

If someone wishes to do so and can find a willing partner, great for them.

But no one should have to do so.

Next time you go to McDs or the like, see how many seniors are working there. Take a another look at overnight shift and see how many people in their 20s or 30s are working.

There are people who for a variety of reasons will never end up in a high-skill, high-wage job; or for that matter one that is much above the minimum.

The notion that its simply a choice to go to school when you may not academically qualify or being able to afford it is really peculiar.

That's far more possible in Canada than in the US, yet we still have middle-age folks here working for minimum or close to it. (not that many, but still).

Further, the example I gave of a friend was one who did graduate HS and what we would call community college here, he's worked non-stop for 20 years, been promoted, and as I noted makes well above minimum.

But his income has increased only in line w/inflation in recent years, while the cost of rents in Toronto have shot up about 50% faster.

I would accept an argument that policy changes to promote wage-growth for middle, lower-middle, and low income earners would be preferable to rent control.

However, when those haven't been implemented, your stuck addressing the world as it is.

I would also accept that the real estate market by its nature is distorted in a world of global capital flows.

That measures to mitigate that, other than rent control, would be useful.

Again, it isn't really so, as such we have to help real people where they are.

***

One other quick note, lots of things are or were 'reality' that should never have been and shouldn't be now.

Slavery was once reality, society evolved away from that.

Streets were once open sewers, we evolved modern sanitation.

Most of the world had adopted minimum vacation times of four weeks or greater, that the US has not does not mean that 'reality' should be allowed to stand.

Likewise, people of modest means, but who work full-time or close to it, ought to be able to be self-sufficient, including having their own place, eating three healthy meals a day, access to good healthcare, proper clothing, and transportation etc.

I'm entirely negotiable on the 'how'. But not really on the 'whether'

* I haven't lost sight of struggle either. I just am a realist.

*If you work full time and are single you are entitled to your own place? No matter how expensive your metro is? Where does that entitlement come from?

*A 1 bedroom should not be out of reach, based on whose opinion? Yours? Some government study? A professor? Do you see where you are getting into the weeds now?

*I never said teens are the only ones making min wage. You are making up things to kill some argument I never made.

*How old are you? A complete stranger? Their not offering you candy, they are agreeing to live with you in exchange for a cheaper living situation. I did it before, and many people do it now. Its life, you don't always get what you want and living with a roommate cuts your rent in half, so you can either complain about paying too much or complain about a roommate. If you don't like that, make more money.

*Again, you keep telling me what people should or shouldn't have to do. I don't care what happens(intellectually speaking). You are telling people this or that isn't OK....and it comes from somewhere that we cant measure.

*I don't understand why I need to go to mcdonalds. Old people can make lower wages too, I never argued otherwise.

*Anyone can make more than min wage. It takes time and effort. My gf started working in college making 7.50 an hour, three years later she was at 14.25 an hour. People do these things all the time. It doesn't take a degree or some crazy training.

*A choice is to go to school. Community College in my town is insanely affordable, and even more so when grants are added in. And if you can't academically do college, …...what are we suppose to do? Support that person for life? I would only agree with that person had a real mental challenge to learning, which could actually be considered a disability.

*If your income isn't keeping up with rents you could either buy a home or move. Sounds harsh, but most harsh advice is the best advice. If we only told people what they wanted we would all be perpetually 13 years old in our lifestyles.


Overall you seek an entitlement for people when none has been made before. At the end you mention people "working full time or near it"....which is the problem with your thinking. Its so fluid its dangerous. Today youll argue that someone making min wage and working 40 hours get a standard 1 bedroom apartment. But wait, now we have a single mom working 30 hours a week with three kids, does she get one bedroom per kid? Or is just a 1 bedroom still ok? Does she bear any responsibility for bringing 3 kids in the world? Are you gonna feed and clothe and provide healthcare for those three kids?

At the end of your thinking, a college kid taking 1 class a semester and working 10 hours a week would qualify for housing. Its a dark rabbit hole youre working yourself into.

[mhays]

Originally Posted by eschaton

Essentially, historically the market did provide for housing at all income levels. The problem is housing for low-income folks was slum housing. Early in the 20th century, these shantytowns were deathtraps. They were fire hazards, bred disease due to the lack of basic sanitation, and were often at risk of collapse at any moment. They posed a danger not only to their residents, but to cities as a whole.

As a result of public outcry over slum conditions, building codes were passed. This effectively set a minimum price that housing could be constructed for. As a result, the poor were no longer able to afford housing. Various forms of subsidies followed shortly thereafter.

As long as we make it illegal to construct new-construction slum housing, we will need subsidized housing.

The other option is really small housing...true micros that are usually outlawed. People should have the right to live in a dorm-sized apartment, or a tiny house. Let residents decide how small these can be.

My city had these for a short time, and they went like hotcakes. You could get 120 square feet with shared kitchen/bathroom for a fraction of the price of a typical studio. Or you could get 180 square feet with bathroom and kitchenette.

Then we outlawed them, except for student housing. The smallest new units are usually around 280 square feet based on the various regs. For those who can't afford one of those...to the gutter with them.

[eschaton]

Originally Posted by mhays

The other option is really small housing...true micros that are usually outlawed. People should have the right to live in a dorm-sized apartment, or a tiny house. Let residents decide how small these can be.

My city had these for a short time, and they went like hotcakes. You could get 120 square feet with shared kitchen/bathroom for a fraction of the price of a typical studio. Or you could get 180 square feet with bathroom and kitchenette.

Then we outlawed them, except for student housing. The smallest new units are usually around 280 square feet based on the various regs. For those who can't afford one of those...to the gutter with them.

The banning of micros, SROs, and the like was indeed part of this - part of the general attempt in the 20th century to "de-tenement" apartment living. Much like easing zoning restrictions in general, allowing for them would lower the price of housing overall. However, these would not suffice as a replacement for low-income housing, because they tend to be built in more fashionable areas for young professionals. It could take decades of depreciation before they'd be true low-income housing.

Tiny houses though, no. There are bigger impediments than zoning to tiny houses, such as utilities charging a flat rate for hookup regardless of building size, which make hooking them into the existing water/sewer/electric grid not cost effective at all.

[mhays]

At 180 square feet, even a new unit in a decent area can be pretty affordable. And any increase in supply vs. demand can help the lesser units drop in relative price. But true, they're not a universal solution.

Your point about tiny houses is partially true. Yes some costs are static per unit. Same with micro apartments if they have bathrooms etc. Your house will cost more per square foot if smaller. But a 200 square foot house will still cost a fraction of a 2,000 square foot house.