Could Oregon Become the First State to Ban Single-Family Zoning?

[BrownTown]

Originally Posted by muertecaza

The solution doesn't seem very well tailored to the problem (if they truly think there's a problem). The law limits rent increases to 7%/year when rents in Portland (which has had the greatest increases in the state) increased 30% in 8 years, or 3.75%/year? And it doesn't apply to < 5 unit buildings or buildings newer than 15-years-old? What's the point of this law?

It's 7% plus CPI. That's a pretty damn weak "rent control" law. It would hardly ever apply.

[the urban politician]

Originally Posted by BrownTown

It's 7% plus CPI. That's a pretty damn weak "rent control" law. It would hardly ever apply.

They started at that to get the law “into the door”

Over the years, liberals will tighten the screws and the regulations will get more and more heinous. That’s always what happens once you get the Government involved.

That’s why banning rent control altogether is the best policy. Don’t let the Trojan horse in

[Pedestrian]

Great. California and Washington need more developers and housing investment.

[mhays]

It sounds like a light law, but it'll still restrict rent growth in some cases. That will reduce the impetus to build, which will cause a little more scarcity, which will cause rents to rise to the extent that supply falls behind demand.

It's not quite that simple of course, but that's the gist.

The rent control proponents tend to think one move ahead. Some of us are thinking a couple moves beyond that, and applying basic economic concepts. Reality of course is many moves further.

[Pavlov's Dog]

Originally Posted by muertecaza

The solution doesn't seem very well tailored to the problem (if they truly think there's a problem). The law limits rent increases to 7%/year when rents in Portland (which has had the greatest increases in the state) increased 30% in 8 years, or 3.75%/year? And it doesn't apply to < 5 unit buildings or buildings newer than 15-years-old? What's the point of this law?

Optics. Politicians can say they did something to address the perceived problem. Like Mhays says, this will be pretty toothless and even if it were to work short-term, would only decrease investment in new apartment buildings and thus be negative long-term in addressing housing supply.

To be honest, there is a lot of multi-family building going on in Portland right now. The economy will probably sour later this year or next and in two years people will be talking about an oversupply in Portland as developers will be going bankrupt.

[downtownpdx]

Originally Posted by muertecaza

The solution doesn't seem very well tailored to the problem (if they truly think there's a problem). The law limits rent increases to 7%/year when rents in Portland (which has had the greatest increases in the state) increased 30% in 8 years, or 3.75%/year? And it doesn't apply to < 5 unit buildings or buildings newer than 15-years-old? What's the point of this law?

I'm not an economist and while the law seems to be a step in the right direction, I know there are people that think it'll restrict the housing supply. But to your point about *average* rents - that stat means little to the person/family who get a 25% increase and are using all their savings to find a new home. Or end up in their car. If they have one. This law will put a stop to that b.s., at least in some cases. It's a start.

[mhays]

Your point is that some abuses will be avoided, so it's ok that the whole rental market will be more expensive?

[the urban politician]

Oregon: land of idiots

https://www.google.com/amp/s/www.wsj.com/amp/articles/oregon-the-rent-control-state-11551649913

[muertecaza]

Originally Posted by downtownpdx

I'm not an economist and while the law seems to be a step in the right direction, I know there are people that think it'll restrict the housing supply. But to your point about *average* rents - that stat means little to the person/family who get a 25% increase and are using all their savings to find a new home. Or end up in their car. If they have one. This law will put a stop to that b.s., at least in some cases. It's a start.

Agree that it's a laudable goal to try to curb that specific situation. And agree that the average rents quoted in the article don't say anything about that specific situation. Given, however, that this law would only stop that specific situations in old, large apartment buildings, and given they passed a state-wide law, I would think they could have found a better-tailored solution.

I'm also interested in the negotiations that went into exempting buildings 15-years and newer. It seems (I also am not an economist) that that would ameliorate some of the concerns about restricting housing supply, because it would give new buildings some runway before the restrictions kick in.

[downtownpdx]

Originally Posted by the urban politician

Oregon: land of idiots

https://www.google.com/amp/s/www.wsj.com/amp/articles/oregon-the-rent-control-state-11551649913

C'mon. Whatever you think of this policy, don't lower the conversation with lazy Trump-y comments next to a Wall Street Journal link.

[Doady]

The stupidest thing is labelling all the people in an entire state as idiots based entirely on a single policy on a single issue enacted by a government slightly more than half of them voted for. But I've come to expect nothing less from The Urban Politician.

[downtownpdx]

Originally Posted by mhays

Your point is that some abuses will be avoided, so it's ok that the whole rental market will be more expensive?

I don't claim to know exactly how this will affect the rental market, and I don't think that anyone really can have a crystal ball on the subject. As is, this particular law allows roughly 10% increases in annual rent (including core inflation). That doesn't seem like much of a hardship to place on landlords, to the point that it will scare away developers and really restrict housing supply. And anyone with a property built in the last 15 years is exempt.

Perhaps this will be revisited and made more restrictive - then and I can start to see the concern about supply - but right now, IMHO, it seems it'll stop some of the worst abuses of ridiculous rent hikes without scaring off developers.

[mhays]

To the extent it works, it'll raise most rents.

Sure, it's a light law (for now) and might have little effect. But to the extent it works...

[jtown,man]

I will say, if my apartment raised the rent 7% I would walk away extremely fast. My rent seems inflated in the first place, and if someone thinks 7% is fair, do I even really want to be in their building?

I almost hope my building gets super greedy when my renewal comes, I will move to a much smaller, slightly less-nice place down the road and save hundreds a month. So for a guy like me, its kind of a win-win, my life is easy enough to move.

[the urban politician]

Originally Posted by jtown,man

I will say, if my apartment raised the rent 7% I would walk away extremely fast. My rent seems inflated in the first place, and if someone thinks 7% is fair, do I even really want to be in their building?

I almost hope my building gets super greedy when my renewal comes, I will move to a much smaller, slightly less-nice place down the road and save hundreds a month. So for a guy like me, its kind of a win-win, my life is easy enough to move.

Your point here speaks to exactly why rent control is so stupid.

If your landlord is restrained in their ability to raise rents, you will stay exactly where you are and the smaller landlord gets hurt by not getting a tenant like you.

In turn, the smaller landlord thus gets less revenue to maintain his older building, and ultimately his property will get redeveloped into something else (a single family home, condos?).

That removes rental apartment supply from the market, counterintuitive to the whole purpose of rent control.

The best way to keep as much housing supply as available as possible is to not cap rents and not regulate the market. Let landlords everywhere compete for your business. You will find the cheapest apartment that suits your needs, and the landlord will have the revenue to maintain their buildings for future tenancy.

[sopas ej]

Originally Posted by downtownpdx

C'mon. Whatever you think of this policy, don't lower the conversation with lazy Trump-y comments next to a Wall Street Journal link.

And one you have to subscribe to to read. How "Wall Street" is that?

[Crawford]

Originally Posted by the urban politician

If your landlord is restrained in their ability to raise rents, you will stay exactly where you are and the smaller landlord gets hurt by not getting a tenant like you.

But this is what tenants want. They want to stay, providing stability in the living situation, while at the same time limiting future rent increases. It has nothing to do with providing "maximum efficiency" or such nonsense.

[the urban politician]

Originally Posted by Crawford

But this is what tenants want. They want to stay, providing stability in the living situation, while at the same time limiting future rent increases. It has nothing to do with providing "maximum efficiency" or such nonsense.

^ So what if tenants "want" it? I want to buy a 2019 Honda Accord for $12,000, but that's not what a 2019 Honda Accord costs. If the Government forced Honda to sell the Accord for $12,000, three things would happen: 1) it would be made of junk and fall apart, 2) they would largely stop making it, and 3) Original Honda Accords would suddenly become much rarer and be viewed as luxury items, thus retailing for far more than they originally did.

Point being, the real estate market cannot survive based entirely on the price of simply what tenants "want". If it costs a certain amount of money to construct, maintain, and serve a property with utilities, then that's what it costs. Period. If the tenants don't like it, there are literally hundreds of other apartments to choose from--rentals are not a public utility like an electric company. The consumer has choices.

The only nonsense I am reading is your failed logic. I figured you understood economics better than this, but more and more you're just sounding like a silly populist....

[jaxg8r1]

Originally Posted by the urban politician

^ So what if tenants "want" it? I want to buy a 2019 Honda Accord for $12,000, but that's not what a 2019 Honda Accord costs. If the Government forced Honda to sell the Accord for $12,000, three things would happen: 1) it would be made of junk and fall apart, 2) they would largely stop making it, and 3) Original Honda Accords would suddenly become much rarer and be viewed as luxury items, thus retailing for far more than they originally did.

Point being, the real estate market cannot survive based entirely on the price of simply what tenants "want". If it costs a certain amount of money to construct, maintain, and serve a property with utilities, then that's what it costs. Period. If the tenants don't like it, there are literally hundreds of other apartments to choose from--rentals are not a public utility like an electric company. The consumer has choices.

The only nonsense I am reading is your failed logic. I figured you understood economics better than this, but more and more you're just sounding like a silly populist....

I'm generally against rent control but this seems rather tame and very unlike actual rent control that some cities have implemented (San Fran, NYC, etc.) which I think your argument would better apply to.

Having said that, I think you could make a credible argument that this is more of a "message to the market". The message being "reign in these abuses or we will through tightening this", which I'm ok with.

[mhays]

Without rent control, some buildings might go up 15% but most will grow moderately (like 2-3%?) when averaged over a long period.

With rent control, that one building might be limited to 10% or 7%, but the typical will generally be higher, like 4% for example, due to scarcity (to the extent the law has effect).

With rent control, rents will often rise even if the current vacancy rate doesn't merit an increase...if you want to have the potential for a certain cash flow in 2020, you'd better raise rents in 2019 to keep the 2020 number in reach.