Home price will fall with the threat of rent control in CA

Again, theory disregarding facts on the ground.

Let me give you a fancy theory. House price go in hand in hand with rent. They are both money paid for roofs over your head.

Rent control tends to push up rent and therefore will push up house prices as well.

How does rent control push up rent? Does limiting your daughter’s nutrient helps to suppress your neighbor’s height?

You are falling into a black hole, man

Housing price is governed by the same principles as human height? Did not know that.

Are you saying rent control is effective in limiting rent growth? Did you change your position on rent control?

You didn’t read, you are going back and forth for the sake of wasting time and forcing me to quit debate.

Go back to read the article and all the conversation. Let’s talk again 7 days later

Housing price is a complex non linear system with many contributing factors. You and most politicians say let’s put in rent control and that will lower rents. Reality is just opposite. Rent control ended up pushing rents higher, not lower.

100% BS. Politics is ugly and turn an innocent baby Manch into a ****

We need to look outside of CA for fire escape now. Austin seems a good option. Where else?

Also seems that it is better to avoid multi family buildings in CA. Condos and single family homes can fall into rent control, but you can still sell to homeowners at a discount so that buyers can use the discount to evict the tenant and move in themselves. The multi family buildings will be hard to sell and become a liability

What politics? I am saying these anti market policies will not work and will end up having the opposite effects. You are saying they are effective.

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BS again

Your argumentative style on this topic mirrors your typical political discussion styles

Just my unpolished opinion:

In SF there is rent control and rents are high, and rents have been climbing in recent years (may have stalled right now but the trend has been up). When people say SF rents are high they go by the asking rents in ads from various sources. It doesn’t mean all tenants are paying at those levels. The majority of tenants should be paying below-market rents with varying degrees of below-market-ness. So the actual rents are lower than what you see published.

If SF didn’t have rent control, lower-income folks will be displaced and the units they occupy will be freed up to accommodate newcomers. The acuteness of housing shortage will be lessened and asking rents will come down. But because everyone is paying (close to) market rent, as a whole I believe the average rent will actually be higher than with rent control. Of course it’s just my guess since there will never be any real data for this case.

In SF the majority of tenants don’t move. They dig in and stay put, even when their life situation changes, because market rents are just way too scary.

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More similar to Cuba and North Korea. Rent is nothing but housing shortage is extreme over there. New people can not move in, you will need a migration control policy and each city will require a legal border “wall”. If you move to a different city without government approval, prison will be your home.

North Korea has a housing deficit. 20-40% of the population is essentially “homeless” by international standard. They have a place to live but their housing situation is beyond imagination. Is it extreme over-occupation of the extreme shortage of houses?

South Korean housing is millions (guesstimate) of times more extensive, but there’s a 2% surplus.

“ According to the report published by the research center under the state-run Korea Housing Finance Corp. (KHFC), North Korea is estimated to be able to house around 60-80 percent of its population.

This figure is determined by dividing the total housing units by the number of ordinary households, indicating shortages or abundances of housing in a certain region or country.

South Korea, on the other hand, posted 102.6 percent in 2016, according to the latest Statistics Korea data.”

I used to meet with a group of Berkeley landlords. They would demand a 15% discount when purchasing compared to other towns based on cash flow. Just because Berkeley has expensive sfhs doesn’t mean investors want to buy multi family there without a substantial discount to comparables. If you can get a Berkeley apartment building cheap enough then you can put up with the city horseshit.

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The issue is not the controlling the rent, esp rent as % increase limiting to 5% or any %, but it will come with additional by laws that severely restrict landlords and hurt the home values.

Renting is a business like running any company, say like apple. Government should have some framework or governance of equal treatment…etc, but should not come in to restricting business.

Rent Control will drive away mom-and-pop shops like many in this forum as they may find easier to maintain their portfolio in ETFs, Mutual Funds than rental business.

Many here in forum and outside averse stock market by its volatility and holding rentals/RE side. If rental business is hard hit, naturally drive them to look for alternate system.

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In SF, the rent-controlled units are largely occupied by Baby Boomers. Often times these Baby Boomers have enjoyed subsidized housing (rent control) for decades, and therefore have not worked hard to ensure that their income grows. They have an easy life because of rent control that caps their rent price at a fraction of CPI.

Guess who subsidizes these Baby Boomers by paying market-rate for non-rent-controlled units? Millennials. Newcomers to the city. Rent Control in SF is Baby Boomers stealing (yet again) from Millennials. I wish Millennials realized this ---- Those sneaky Boomers from the flower-power-60s have crafted a society to steal from their own offspring.

-a Gen Xer.

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I think you almost have it. The issue is that just-cause-eviction severely constrains landlord’s ability to buy/sell property. Once you have a tenant in, you can’t get them out if you want to sell the property if just-cause-eviction laws take root.

The only backdoor to this is to raise rent - but if rent control is also applied, then there is no backdoor. This is why rent control is terrible.

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BTW FWIW in my view ---- if they apply rent control as “Cannot increase rent any more than CPI + n%” where n is a positive number, say, n > 10, then I don’t view that as too bad of a thing.

The problem often times are lazy inattentive landlords who don’t raise rent for a suuuuuper long time. Then one day, those lazy landlords wake up and say “OMIGOSH I need to raise rent 50%!!!” which shocks the now-super-entitled-lessee into contacting their lawmakers to apply rent control.

Anyways, if this pile of shit does get passed, I would love to see the “unconstitutional takings” clause get brought up in a lawsuit to the Supreme Court with a rightward leaning bench. Here’s to hoping we can flip one more justice on the bench to the right — perhaps Ruth Bader Ginsburg will retire soon.

French homeownership was only 35% in 1955. Anyone knows why? That seems a disaster

In 1955, slightly over one-third of households in France (35%) owned their main home. Their share soon rose thanks to state-subsidized building loans and loans for purchasing public housing units, as well as the development of private lending organizations. The 1977 reform further accelerated the process, as did building industrialization in France: property acquisition loans (PAP) and personalized housing loans (APL) enabled massive numbers of mid-level managers, technicians and skilled manual workers to become homeowners.”

Everybody who commented think from the POV of landlords, because we are landlords. Rent control pushes rent higher, I think most will agree because there’s a lot of evidence for that.

Rent and buy are both paying for housing. They are almost perfect substitutes of one another. That’s why people take out their rent-v-buy calculator to see which one is cheaper. In prime Bay Area rent is actually cheaper. Just look at places like Palo Alto.

If you push up PA rent you are making buying more attractive there. I posted some articles in the past written by young techies who are making lots of money and refuse to buy. Why? Because renting makes more financial sense. More demand for buying will push up house prices.

I have never seen a place with high rent but low house price. They go hand in hand. You push up one and the other will follow. Unless you are saying rent control will decrease rent, the logical conclusion is that it will actually increase both rent and house value.

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Rent control creates rental housing shortage, which will discourage relocations both within the metro area and between the metro areas.

Home price will decrease during the discussion of rent control and in the beginning phase of rent control due to reduced buyer pool.

Over the long term, it’s more complicated. There are universal rent control and selected rent control. Reduced relocation also will affect the economy and population growth. Long term impact is hard to predict. I only care about the price trend in the next couple of years for this thread. Many readers also only care the price trend in the next few years.

A 100k question: what’s the reasons for the 10% home price decline in 2018? Threat of Prop 10, mortgage rate rise, stock price decline, trade walls? Or market cycle, speculative psychological cycle, price gravity? This is a much easier question.

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