Not ever having lived in a rent controlled area, I have a big couple questions on rent control, so please bear with me:
GQ: How limited is it? The only city I’m familiar with is Santa Monica.
GD: If very limited, should an arguably otherwise beneficial proposition be voted down because of it?
2a) GQ: What is the purpose for rent control? Is it social welfare for fixed incomes or a form of rental protection from spiralling costs?
2b) Does the landlord get any recompense for receiving less-than-market value rents?
GD: Why should rental owners support low-cost housing and not the city?
I defended eminent domain for use in California and why cities are pretty much cornered into forming public-private partnerships and to demonstrate that not all public-private partnerships are evil. Is ED always great? No. Should ED be used for private development? Maybe sometimes - depends on the specifics of the situation. But rather get into a debate about ED in general, I think this thread is better to keep the focus on the two Propositions and what they mean for the State of CA.
Because the propositions have nothing to do with the State of California!
Look, if somehow you tied in Prop 98 and 99 in with completeing the 710 through South Pasadena, then I would agree with you, but this is a direct response to Kelo, cities, and private enterprise. If the state wants to use ED to build more schools or a county run free clinic or a light-rail system, then 98 and 99 say nothing about that.
On the other hand, if the city wants to hand your property over so that some developers can build a strip mall Prop 98 says, “No!”. Prop 99 says did you live in it for a year? Then, “No”. Did you own it less than a year? Then, “Yes.” Is it your family run store? Then, “Yes.” Is it a small office complex you invested in? Then, “Yes.”
The problem is that neither of these addresses the primary cause of California’s current woes. They’re work arounds. I plan on voting no on both. We should be forcing the legislature to get off their asses and do their jobs, not helping them CYA via ballot measures. I would however vote with kaylasdad99 to repeal Prop 13.
What I’m trying to say is because of the dire state of CA and our ever decreasing tax revenue, basic services such as light rail, social services might have to evolve into private-public partnerships, for them to get built at all. For example, the CRA might use ED to build a private hospital, if the hospital agrees to create a free clinic for the neighborhood. Would you rather have a private hospital that has a portion of it saved for a free clinic? Or no free clinic at all? I’m not that into this idea, and in a perfect world, we wouldn’t have to incorporate a private business owner into the equation, but the reality is that local finances in CA have no other option.
At least with Prop 99, this leaves private-public partnerships as a option, open for debate, flexibility and opposition if need be.
That’s a pretty poor way to get a so-called “basic service.” Only giving approval for construction if the developer spends money on whatever program or building favored by a politician seems pretty close to extortion to me. If these services are so necessary then I assume California can still fund them by raising income and sales taxes, can’t they?
I am not a housing expert, nor do I work in the field of housing, so I’ll just lay out some basic ideas I learned in grad school.
Rent control varies by cities. Depends on the city on now limited it is.
2a) Purpose of rent control is basically to protect elderly and the poor. Basically it disallows property owners from increasing rents dramatically in a short time span. With gentrification happening, this has become a big deal.
I can use the Los Angeles neighborhood of Echo Park as an example of the benefits of rent control. 10 years ago, Echo Park was considered a “ghetto” and basically the only people who lived there were minorities, the elderly and the poor. Now, Echo Park is totally cool, hip with a huge influx of yuppies moving in. The people who lived in Echo Park are probably paying under market values of their apartments considering they have lived their for 10 years and have rent control measures in. Rent control disallows the rent owners to be like, “hey you have lived here for 10 years when this neighborhood sucked, but now it’s totally cool and hip and I want to increase the rent by $1000 because I know some DINKs will move in here now and pay that. See ya!” Yeah it is sort of “welfareish” but why should poor people be kicked out of their neighborhoods just because Yuppies think it’s cool and trendy to live in “ghettos” now?
In Los Angeles, I don’t think the rent control is that strict. My VERY basic, hearsay knowledge is that an owner is only allowed to increase rent by 3% a year.
2b) Landlord does not get compensation, but with Prop 13 in effect, it’s not like his property taxes are spiraling out of control either.
Yeah right. Any Proposition to increase taxes in the past 5 years has gotten shut down by voters and with a Pubbie governor who REFUSES to increase taxes… well the situation is not looking good. The CA budget deficit is approaching $20 billion! http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/04/30/MN4F10DRIB.DTL
So then the voters have spoken. The services which you see as so necessary they do not see as such. If voters do not want to pay for these services then they should go without. Politicians should not try and extort businessmen into providing them. Why should these businessmen bear the burden of paying for these services enjoyed by all?
This is the classical problem with government and public goods. People want more of public goods, yet no one wants to pay for it. This isn’t a case of people not wanting a world-class subway in LA (everyone hates traffic in LA and complains how there isn’t a subway… good transit… blahblahblah), but more that they want a subway system but didn’t want to pay for the half cent sales tax increase to pay for it.
I’ve been to Maryland (well Baltimore) and don’t act like your neighborhood couldn’t use more public services either!
Yes, people want stuff for free. If they are unwilling to pay taxes for it, though, they should not get it. Trying to justify theft (eminent domain) and extortion (provide x,y, and z and we’ll approve your condo/hotel plan) to provide public services, though, is pretty difficult, though. If people don’t want to pay for it why should they get it through these illegitimate means?
One, I don’t live in Baltimore. Not even close.
Two, the problems in Maryland certainly are not because our taxes are too low. You think that providing money for more “public services” will solve the problems of California and Baltimore. I’d like to see some evidence that lack of spending caused these problems. In Maryland the government takes a huge chunk of our income. Baltimore gets a large infusion of cash from both the state and the feds. Guess what? The city still has a ton of problems. It’s not a lack of cash that’s the problem. It’s not a lack of government programs or “public services” that’s the problem, either.
Do you really think that that people get HIV because there isn’t a government program to prevent them from doing so? I’ll guess I can tell my friend who contracted HIV through unsafe sex that it wasn’t the unsafe sex that did it, it was because the government wasn’t big enough.
Let me put it to you this way: if your theory is correct, then please show me the large amount of government services in, say, Boise, Idaho, or Salt Lake City, Utah, or Bethesda, Maryland, that are responsible for these communities having a lower HIV rate, less crime, and less drug addiction than Baltimore. Or perhaps you can show me why Baltimore had less problems in, say, 1950 than it does today even though there was far fewer government programs that exist today.
98 and 99 are solutions in search of a problem. I frankly don’t really see why government should be able to take private property for private use, but I also don’t get the impression that it’s a big problem (outside the area of rent control).
And rent control, on the other hand, is a hyperbolic mess. Trotting out the “it’ll protect little old ladies!” argument ignores the reality of rent control: a handful of apartments are kept at artificially low rates, which means that a landlord has to raise rent on the other apartments in the building to subsidize the artifically low, rent-controlled apartment. Which means that fewer affordable housing units are available, and the middle class, who are renting the non-rent-controlled apartments, are subsidizing those in rent control. Who may or may not be poor, indigent, old, etc.
Really, if your goal were to help lower-income families get housing, rent control is the last way you’d go about doing it. That’s like trying to frost a cake by blindfolding yourself, flinging frosting around your kitchen and hoping some of it hits the cake.
I’m voting no on both 98 and 99. The legislature needs to do their jobs and stop running to us when they can’t agree. And I’m really not in favor of amending the constitution.
I must confess that in general I am extremely skeptical about the government taking private property. the idea that we don’t have to worry about this because its all going to be governed my the democratic process may sound good but I believe it is deeply troubling. In particular, the democratic process is very much subject to capture by small groups with vested interests. So a big developer with connections in city hall, who can afford to hire lobbyists winds up taking somebody’s house in order to build shopping mall.
But see, we don’t have to worry about it because its a big public/private project. And that’s the only way you can get anything done in California these days. And it’s going to do all these cool things like give housing to low income people. I am deeply skeptical of this. I think the developers are in it for the money. I hasten to add that I’ve got nothing against that, by the way, but I’d rather that the whole thing was laid on the table.
Regarding rent control, I agree with the other posters that it is a bad idea. When you force someone to sell something (in this case housing) for less than the equilibrium price, then you get, among other bad things, shortages. So yes, you “protect” in some sense the person who is already living in the building, becuase her rent can’t go up. But think about what happens next. For one thing, it means investors are less likely to want to invest in building new housing because they can’t get a decent return on their money. So you help the people already living in the apartments, but you hurt all those other people who are looking for places to live.
My reasoning is that, while I don’t like the use of eminent domain for conveyance to a private party, I really do feel that the language of 98 is far too broad, and I don’t know what it might do. I’m not in favor of rent control, but I am in favor of certain tenants’ rights, many of which could be construed as an eminent domain economic transfer from landowner to renter under 98. I’m voting for 99 not because I like it, but because I actually dislike 98 so much that I hope that, if it does pass, 99 will pass with more votes and strike it.
Actually, in Los Angeles, rent control doesn’t work the way you describe. It’s not that some units are rent-controlled and that other’s aren’t - the age of the building determines whether the apartments are rent controlled or not and so the entire building is affected by rent control laws. I believe that if a building was built before 1970, it has to apply to rent control. Most owners circumvent this stipulation by bulldozing down their building and building over it.
Just out of curiousity, how do you propose cities help lower-income families find housing then?
I don’t think anyone is trying to fool you with the “altruistic developer.” Of course they are in it for the money, and frankly they are going to build somehow, someway. At least with public/private partnerships we can force them into doing good things for the community. The 4 star W hotel is going to get built anyways - might as well force them to provide affordable housing and pay their workers a living wage, right? It’s not like the city can provide affordable housing right now anyways!
By “handful of apartments” I meant citywide. As you are no doubt aware, there are ways that a landlord can exempt a particular apartment from rent control, or can raise the rent up to market levels. Thus, although a particular building may be rent-controlled, that doesn’t mean that every apartment there is rent-controlled, or that all the apartments rent at the same amount.