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

[mhays]

Originally Posted by MonkeyRonin

That's great in theory, and might work out just fine in lower-cost, less competitive markets, but it doesn't really go like that in higher-demand, higher-cost places.

The purpose of rent control is not to create a cheaper housing market - it's to protect tenants from rent increases beyond what they can bear. And in those high-cost, high-growth markets, that is absolutely essential because there isn't necessarily going to be a cheaper alternative.

I'm guessing you've never lived or owned somewhere with rent control, but that's not really how it works. In most cases, there is an regulated max annual allowable increase in rates that reflects inflation & utility price growth. Likewise, if there is substantial maintenance required, a landlord can apply for an above-guidline rental increase.

Also, when leasing to a new tenant you can charge them whatever price they'll agree to (which presumably, would be enough to cover your mortgage & expenses, and as high as the market will bear at that time). So unless you're a completely incompetent as a landlord you should never be losing money on a tenant.

I can't say I really have any sympathy for landlords being unable to increase their rates after-the-fact because they would like to make more money than what they had originally agreed to.

Because - even assuming there even is a supply of other available cheap housing - being forced to move is just so easy, right!?

You're not getting the economics. The worst effects of rent control are specifically in the expensive markets...it's no coincidence that NYC and SF are both rent control cities.

In a busy market, supply and demand play a huge role. Demand fills the supply, which expands when the cost/risk/reward equation merits it. New supply is the pressure valve. If the local rent control law adds risk to the equation (for example curtailing rents in 15 years, restricting future value) then less gets built, adding scarcity, and raising market rents.

[Crawford]

Originally Posted by mhays

You're not getting the economics. The worst effects of rent control are specifically in the expensive markets...it's no coincidence that NYC and SF are both rent control cities.

NYC and SF are rent control cities because they're Lefty cities with strong "tenant advocate" groups, not because they're expensive.

[the urban politician]

Originally Posted by Crawford

NYC and SF are rent control cities because they're Lefty cities with strong "tenant advocate" groups, not because they're expensive.

Exactly.

Rent control is not about sound public policy or even about reducing prices. It's about pandering.

[mhays]

Originally Posted by Crawford

NYC and SF are rent control cities because they're Lefty cities with strong "tenant advocate" groups, not because they're expensive.

I'm talking effect, not cause. Their rent control has had a major effect over the years...some of it simply takes units out of the commercial market, meaning the market-rate group is competing for fewer units even while a protected class benefits. And some policies have actively discouraged new construction.

[the urban politician]

Originally Posted by MonkeyRonin

The purpose of rent control is not to create a cheaper housing market - it's to protect tenants from rent increases beyond what they can bear. And in those high-cost, high-growth markets, that is absolutely essential because there isn't necessarily going to be a cheaper alternative.

Completely disagree. The Government does not have any obligation to insulate tenants from the real and true cost of real estate ownership and maintenance, and when they start getting into the business of "picking and choosing" who to help in a private contract between 2 parties, they distort the market and usually cause harmful consequences that they don't intend. The fact that Government takes on this role is nothing less than short-sighted and pandering for votes.

In addition, you cannot simply legislate lower prices unless you enact policy changes that reduce the cost of doing business. It's utterly ridiculous.

I'm guessing you've never lived or owned somewhere with rent control, but that's not really how it works. In most cases, there is an regulated max annual allowable increase in rates that reflects inflation & utility price growth. Likewise, if there is substantial maintenance required, a landlord can apply for an above-guidline rental increase.

Also, when leasing to a new tenant you can charge them whatever price they'll agree to (which presumably, would be enough to cover your mortgage & expenses, and as high as the market will bear at that time). So unless you're a completely incompetent as a landlord you should never be losing money on a tenant.

And I'm guessing you've never owned rental property. The reality is, I reject any notion that rent control can be fair in perpetuity. Every city has a different rent control policy, but what does tend to happen is that once you let Government regulation in the door, you never can undo it. All it takes is a particularly heinous administration with populist leanings to come in that will tighten regulations further and turn property ownership into a living hell.

In addition, I reject the notion that having a high cost of doing business, but allowing property/business owners to simply "submit an application" to the Government to "appeal" to increase their revenue is anything but miserable public policy. Time and time again we've seen that imposing bureaucratic burden and creating appeals processes simply a) increases the cost of business, b) particularly places a burden on small landlords who usually don't have the time or resources to go through it all, c) often creates unnecessary legal costs, and d) is a recipe for corruption. We see this day in, day out in Chicago.

I can't say I really have any sympathy for landlords being unable to increase their rates after-the-fact because they would like to make more money than what they had originally agreed to.

And I can't say that I have sympathy for our tenants living in cities like NYC and SF, making six-figure salaries, eating at nice restaurants, drinking fine cocktails with their friends, who suddenly want to pay less in rent for the privilege of living in these cities just so that they have more disposable income to enjoy.

The ubiquitous rich landlord/poor tenant narrative is a blatant, unadulterated lie. I have no tolerance for it.

Rent control today in our luxury cities is nothing short of a wealth transfer from property owners to the increasingly well-to-do tenants living in them, and they certainly aren't in need of it.

[mhays]

I can't believe you're arguing that it's ok if the market gets more expensive due to this.

Rents matter to most people. Expensive cities are expensive generally because of structural issues like supply/demand and public policy (including rent control in the worst cities). This matters!

[M II A II R II K]

Oregon’s New Rent Control Law Is Only A Band-Aid On The State’s Housing Woes

https://www.brookings.edu/blog/the-avenu...y-a-band-aid-on-the-states-housing-woes/

[mhays]

As a builder of apartments, I'll say that you're wrong about what affects the building of apartments. (I'm not claiming deep expertise, but trying to understand this stuff is part of my job.)

[10023]

And then they pass rent control to make sure no one develops multi-family. Go figure.

[subterranean]

Believe me, they are still going to build because there is still money to be made. Besides, rent control does not apply to new construction.

In addition, the City of Portland is in the process of trying to approve the Residential Infill Project that works on FAR and allows tri's and quad's that used to be allowed but are now illegal.

Portland is seeing modest homes torn down in favor of modern McMansions, so the city has put a cap on the square footage and is legalizing missing middle housing types. Should pass this year.

And to anyone who thinks there isn't a housing crisis here, you're just a dick. $400,000 homes should not be the ideal and considered approachable for the average would-be homeowner. $400,000 buys a fixer upper in some near-in neighborhoods that wouldn't even pass inspection for a COO. Which means you probably can't get traditional financing.

The median home value here is $425k, but the supply is severely restricted and prices are driven way up. $425k would be $2349/mo inclusive of taxes for a pretty crappy house. For this to be affordable, the household income of the buyer would need to be $7830/mo, or $93,960 per year. The average household income in Portland is $86,000.

However, since we are so under-built in low-income units AND high income units, low-income people, middle income people, and high income people are competing for what would otherwise be middle income housing. As a result, poor people and people of color are being pushed to the suburbs. In Portland, the burbs are cheaper and more diverse economically and racially than the central city, which poses its own issues.

Edit:Here's a 584 sq. ft. shack 5 miles from downtown for $250k