Power Line News

http://www.huffingtonpost.com/stephen-elliott/shame-on-barbara-boxer_b_101571.html

U.S. Senator Barbara Boxer (D-CA) has failed to come out against Proposition 98, the landlord scheme to end rent control in California. The proposition, which would take away municipalities’ ability to make their own housing policies based on their own specific needs, is hidden behind the fake title of eminent domain reform. But you only have to look at the list of people who initiated the bill to know that eminent domain reform has nothing to do with it. These are big landlords who could care less about eminent domain. They’re very rich people like Sam Zell looking for an easy way to get richer. They have enough money to get anything they want on the ballot.

As the Los Angeles Times points out, the fact that the proposition seeks to hide its actual intent is reason enough to vote against it. Many people won’t even realize that, whatever their politics, this is a vote for or against rent control. The sponsors of the proposition are too cowardly to point this out and take a stand for what they really believe.

The list of people opposing the landlord scheme is a long one and cuts across party lines. It includes not just the SEIU, Diane Feinstein, and the State Democratic Party, but also Arnold Schwarzenegger and former governor Pete Wilson.

Proposition 98 would have a devastating impact on San Francisco and parts of Los Angeles. 350,000 people in San Francisco, more than half the population, rely on rent control. Without rent control the city would change so drastically most of us wouldn’t even recognize it. When Proposition 98 is defeated June 3 (and it will be because we’ve made a lot of mistakes in this state but we’re not that stupid) a lot of us will remember Barbara Boxer failing the people on this issue. We’ll know that when called for a position she let us down and we’ll vote against her when her time comes due.

These are big landlords..........looking for an easy way to get richer.

LOL.  Shouldn’t that be “Big Landlords”?

Eminent domain has nothing to do with it?  Okay, if they say so.  I guess it’s also a dubious proposition that in cities with “sustainable growth” and “open-space preservation” housing costs continue to skyrocket due to lack-of-supply and demand.

When I was in college years back, I remember rent control came up and the example town used was Berkeley California.  I recall how ancient hippies who had lived there since the 60’s loved rent control and they never moved on, they stayed there for years unlike most people who move every so many years.  Rent control is a joke, it is great for those who got in early though.

Another thing that Democrats love is restrictions on land use, that drives up the cost of housing and hurts low income & middle people who have to then start commuting for hours to get to their jobs in big cities or areas where that is the norm.

They’re very rich people like Sam Zell looking for an easy way to get richer.

They WERE people like my Dad, wanting a place to putter around with his handyman skills, while making a little on the side.  The last straw was when he had to pull out a toilet, as it had so much s#$t and piss crusted on the outside, it was impossible to clean off.

The low lifes of society better be damned glad, there are still people around, wanting to get richer, who are willing to clean up after the trash.  My dad is no longer one of them.

Again where the Dems have massive control we have government intervention which totally invalidates the market economy.

House prices in SF somewhere north of space shuttle territory but rents stuck back at who knows when.

Still one of these days it will all come back to haunt them when the current lease holders end up taking dirt naps.

Then the freed up rentals will jump directly to fair market value or subsidies will have to be done.  But more likely the moonbats will still try to cross to first renters the same fixed rates which by then will be beyond rediculous.

Holding rent control that long without reasonable increases destroys your tax base and the low return on equity tends to have landlords to the absolute minimum to maintain their properties.  There is simply no gain from doing improvements to your properties to gain market share until it gets out from under a rent control agreement.

Exactly right, nano.

Here’s the thing:  liberalism/leftism always generates the exact opposite of its stated intent.

One would think they’d tend to catch on eventually.  Nope.  It’s a mental disorder.

I don’t follow the real estate market for CA much or SF in particular but generally they are both some of the highest priced areas in the country.

Now just what the ratio is between rent control v non rent control rentals there I don’t have a clue.  Same goes for rental to ownership ratios or even vacancy rates.

But with pay scales higher than most states to meet the cost of living there, it would seem anyone in a rent control unit must be making out like a bandit as much as wages have gone up over the likely term of those leases since the 60’s.

As foreclosures on flipper houses grow , some of those hit are renters of investment properties.  It would seem to follow that any renters displaced due to a foreclosure will have a tough time finding vacant rentals and non rent control units will climb in price to meet the demand.

What this will do is skew even more the differential between rent controlled and non rent controlled rentals and likely help push through legislation eventually to kill off rent control.

I still say that sooner or later when you tick off the entire list of socialistic policies that CA wants to support that it so imbalanced that they become not viable in the long term and sooner or later the pendulum will swing.

It’s all a question of how many times they can keep throwing out bond issues till their rating suffer too much and the whole house of cards starts to fall.

I have no feel for how much rent control stuff still exists in major areas or if SF is a unique situation.  But if major areas like LA have a bunch when this all starts to unwind the pressure on wages and taxes will be a double whammy that will be a major wake up call.

NOTE: highlights mine.

August 21, 2000

CONGRATULATIONS are in order for the San Francisco Weekly, for an informative article that introduces sanity into a subject where insanity is the norm—namely, rent control in San Francisco. What has happened under stringent rent control laws in the city by the bay is what has happened in virtually every other city around the world where such laws have been passed. But it will still be news to rent control advocates, who seldom bother to get the facts.

According to the San Francisco Weekly, new construction of multifamily housing dropped by 32 percent within a decade after the city’s rent control law was passed in 1979. Over the past 10 years, the number of rental units in the city has declined absolutely by 7,500. The vacancy rate is below one percent. Nor has rent control meant low rents. The average rent for a one-bedroom apartment in San Francisco is nearly $2,000 a month.

None of this is unique to San Francisco. A study of 16 cities by William Tucker of the Cato Institute showed “that the advertised rents of available apartments in rent-regulated cities are dramatically higher than they are in cities without rent control.” In view of this, it is not surprising that he also found homelessness more prevalent in cities with rent control.

How can this be, when the whole purpose of rent control is to keep rents down? First of all, the purpose of any policy tells you absolutely nothing about what will actually happen under that policy. Too many disastrous laws get passed because those who pass them win political points for their good intentions and nobody bothers to check up later to see what actually happened.

The San Francisco Board of Supervisors has recently commissioned the first official study ever done of the effects of rent control in the city.

Imagine! The first rent control law was passed in 1979 and has been amended more than 50 times in the two decades since then—usually tightening the controls—but nobody in government has yet bothered to find out what the actual effect has been.

Politics is not about empirical realities, but about popular images. So long as the image of rent control is good, it wins votes at election time—and that is what it is all about, as far as politicians are concerned.

Meanwhile, there is a whole movement of rent-control activists and tenants’ rights advocates who say things like, “Housing is not a commodity.” Mindless mantras like that make them look and feel like the morally anointed, and apparently that is good enough for them. Who needs facts when you have myths that serve your purposes?

The biggest myth is that rent control helps the poor. It helps those poor people who happen to have an apartment when rent control laws are passed—but it also helps the affluent and even the rich who happen to be on the inside looking out. But, as the housing supply dries up, who gets left out?

The homeless people on the streets are certainly not the rich.

Studies in both Cambridge, Mass., and Berkeley, Calif., showed that “rent-controlled apartments were concentrated among highly educated professionals.” In New York, people living in rent-controlled apartments have included the president of the New York Stock Exchange and even Hollywood stars who keep such apartments to use when they happen to be in town.

San Francisco’s rent-control law, like those in other cities, was passed as a “temporary” measure to deal with some immediate crisis—in this case, the runaway inflation of the late 1970s. A cynic once said that there is nothing more permanent than a temporary government policy. Rent control laws were also passed as “temporary” measures in London and Paris during the First World War—and remained in force on past the Second World War.

Since there are always more tenants than landlords, and more people who don’t understand economics than people who do, it is nearly impossible to get the voters in a community with rent control to vote it out. However, many state legislatures across the country have taken that decision out of local hands by passing laws forbidding cities and towns from having rent control. When rent control was gotten rid of this way in Massachusetts, new housing began to be built in formerly rent-controlled communities for the first time in decades.

It can be done. But it is unlikely to be done in San Francisco. Nor is the liberal state legislature likely to act.

There is in fact a measure on this year’s ballot to tighten rent control in San Francisco some more.

Link: http://www.jewishworldreview.com/cols/sowell082100.asp