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[Rent Control/Affordable Housing] Screw the poors or free the people?
Jebus314
Registered User regular
Registered User regular
This here is a thread about rent control and/or affordable housing. Mainly about whether or not you think affordable housing legislation is a good idea, but also tangentially about the side effects of such legislation (which I will discuss further at the end).
What is rent control you say? Well it's the practice of a city or state government regulating the price of rent by placing a price ceiling, which is typically below the market value of the location. There are currently only 4 states (California, Maryland, New Jersey, and New York), as well as the District of Columbia, that allow rent control regulations in cities (cite).
As an example of rent control legislation here are some excerpts from San Francisco's laws:
Apparently (thanks @Feral), there are other forms of affordable housing legislation with similar goals. The other major one which I will briefly discuss is Inclusionary zoning. According to wikipedia:
So while the legislation differs greatly in implementation, the goal remains the same. Restrict free market actions of land owners to improve the low income housing options within a city.
As you can imagine, in this wonderful case of big government versus the free market, there is a lot of contention about the benefits and costs of such regulation. Being fairly uneducated I will simply start by posting the most quickly found results for either side.
Arguments For:
Arguments Against:
In an interesting real world example, Boston eliminated all rent control laws in one fell swoop in 1994. This is from a New York Times article:
The presence of rent control legislation quite obviously has lead developers to try and work around it to maintain some free market ability. This has lead to some interesting situations. Most notably developers will often add renovations/benefits for those tenants that are not rent controlled while attempting to exclude those tenants who are. Two examples are the "poor door" and the so called "fitness apartheid". The "poor door" is when a nicer more luxurious entrance is built that is either purposefully designed to only give access to non rent control units, or that the landlords simply refuse entry to rent controlled tenants through by use of a security guard, while the older less luxiours entrance is reserved for the rent controlled units. "Fitness apartheid" is a case when an apartment building added a high end fitness facility to a building but made it only key card accessible and only for those tenants without rent control.
If you believe that rent control is necessary or a net good, these events raise a secondary question about how far the subsidized housing benefits extend, and whether or not such cases of exclusion constitute discrimination or merely market appropriation.
I would like to make this thread about any and all forms of housing/rent legislation that directly impact landlords, so if I have missed some in the OP feel free to discuss anyway.
I'm guessing most of you hippies are pro-rent control so I will probably play devils advocate for a while.
What is rent control you say? Well it's the practice of a city or state government regulating the price of rent by placing a price ceiling, which is typically below the market value of the location. There are currently only 4 states (California, Maryland, New Jersey, and New York), as well as the District of Columbia, that allow rent control regulations in cities (cite).
As an example of rent control legislation here are some excerpts from San Francisco's laws:
(a) Rent Increase Limitations for Tenants in Occupancy. Landlords may impose rent increases upon tenants in occupancy only as provided below:
(1) Annual Rent Increase. On March 1 of each year, the Board shall publish the increase in the CPI for the preceding 12 months, as made available by the U.S. Department of Labor. A landlord may impose annually a rent increase which does not exceed a tenant's base rent by more than 60% of said published increase. In no event, however, shall the allowable annual increase be greater than 7%.
(2) Banking. A landlord who refrains from imposing an annual rent increase or any portion thereof may accumulate said increase and impose that amount on the tenant's subsequent rent increase anniversary dates. A landlord who, between April 1, 1982 and February 29, 1984, has banked an annual 7% rent increase (or rent increases) or any portion thereof may impose the accumulated increase on the tenant's subsequent rent increase anniversary dates.
(3) Capital Improvements, Rehabilitation, Energy Conservation Improvements, and Renewable Energy Improvements. A landlord may impose rent increases based upon the cost of capital improvements, rehabilitation, energy conservation improvements, or renewable energy improvements, provided that such costs are certified pursuant to Sections 37.7 and 37.8B below...
(4) Utilities. A landlord may impose increases based upon the cost of utilities as provided in Section 37.2(q) above.
(A) Charges Related to Excess Water Use...
(6) Property Tax. A landlord may impose increases based upon a 100% passthrough of the change in the landlord's property tax resulting from the repayment of general obligation bonds of the City and County of San Francisco approved by the voters between November 1, 1996, and November 30, 1998 as provided in Section 37.2(q) above...
(9) A landlord may impose a rent increase to recover costs incurred for the remediation of lead hazards, as defined in San Francisco Health Code Article 11 or 26....
(c) Initial Rent Limitation for Subtenants. A tenant who subleases his or her rental unit may charge no more rent upon initial occupancy of the subtenant or subtenants than that rent which the tenant is currently paying to the landlord...
(A) Where the original occupant or occupants who took possession of the dwelling or unit pursuant to the rental agreement with the owner no longer permanently reside there, an owner may increase the rent by any amount allowed by this section to a lawful sublessee or assignee who did not reside at the dwelling or unit prior to January 1, 1996. ...
(1) Annual Rent Increase. On March 1 of each year, the Board shall publish the increase in the CPI for the preceding 12 months, as made available by the U.S. Department of Labor. A landlord may impose annually a rent increase which does not exceed a tenant's base rent by more than 60% of said published increase. In no event, however, shall the allowable annual increase be greater than 7%.
(2) Banking. A landlord who refrains from imposing an annual rent increase or any portion thereof may accumulate said increase and impose that amount on the tenant's subsequent rent increase anniversary dates. A landlord who, between April 1, 1982 and February 29, 1984, has banked an annual 7% rent increase (or rent increases) or any portion thereof may impose the accumulated increase on the tenant's subsequent rent increase anniversary dates.
(3) Capital Improvements, Rehabilitation, Energy Conservation Improvements, and Renewable Energy Improvements. A landlord may impose rent increases based upon the cost of capital improvements, rehabilitation, energy conservation improvements, or renewable energy improvements, provided that such costs are certified pursuant to Sections 37.7 and 37.8B below...
(4) Utilities. A landlord may impose increases based upon the cost of utilities as provided in Section 37.2(q) above.
(A) Charges Related to Excess Water Use...
(6) Property Tax. A landlord may impose increases based upon a 100% passthrough of the change in the landlord's property tax resulting from the repayment of general obligation bonds of the City and County of San Francisco approved by the voters between November 1, 1996, and November 30, 1998 as provided in Section 37.2(q) above...
(9) A landlord may impose a rent increase to recover costs incurred for the remediation of lead hazards, as defined in San Francisco Health Code Article 11 or 26....
(c) Initial Rent Limitation for Subtenants. A tenant who subleases his or her rental unit may charge no more rent upon initial occupancy of the subtenant or subtenants than that rent which the tenant is currently paying to the landlord...
(A) Where the original occupant or occupants who took possession of the dwelling or unit pursuant to the rental agreement with the owner no longer permanently reside there, an owner may increase the rent by any amount allowed by this section to a lawful sublessee or assignee who did not reside at the dwelling or unit prior to January 1, 1996. ...
Apparently (thanks @Feral), there are other forms of affordable housing legislation with similar goals. The other major one which I will briefly discuss is Inclusionary zoning. According to wikipedia:
The term inclusionary zoning indicates that these ordinances seek to counter exclusionary zoning practices, which aim to exclude low-cost housing from a municipality through the zoning code. In practice, these policies involve placing deed restrictions on 10%-30% of new houses or apartments in order to make the cost of the housing affordable to lower-income households.
So while the legislation differs greatly in implementation, the goal remains the same. Restrict free market actions of land owners to improve the low income housing options within a city.
As you can imagine, in this wonderful case of big government versus the free market, there is a lot of contention about the benefits and costs of such regulation. Being fairly uneducated I will simply start by posting the most quickly found results for either side.
Arguments For:
- Landlords have more information about a home than a prospective tenant can reasonably detect. Also, once the tenant has moved in, the costs of moving again are very high. This leads to imbalances where landlords can charge tenets more than a place is actually worth because the defects are hard to detect or occur after a tenant has already moved in.
- US tax code is ridiculously slanted towards home/building owners. Things like the mortgage interest deduction and building depreciation deductions means that building owners are receiving extra financial benefits from all tax payers but they almost never pass these on to the tenets in terms of lower rent. Tenets are therefor paying higher taxes in part to provide these benefits and also paying higher rents.
- Housing is a finite resource that is overrun in larger cities. To some extent rent control prevents increases that can cause key workers or vulnerable people to leave an area. Many would say that maintaining a supply of affordable housing is believed to be essential to sustaining the local society.
- Following along with the previous point, in reality no rent control in large cities largely forces the poorer members of society out of the area's with the most options for income. Thus following the trend of many free market activities which disproportionately affect the poor.
- The Socialist International argues that housing is a positive human right that equals or exceeds the property rights of landlords.
Arguments Against:
- By artificially capping the income available to landlords you limit the amount of reinvestment used for housing expansion and building renovations. In other words there is no incentive for landlords to create better/nicer apartments as they will receive no additional income.
- Following with the previous point, In a 1992 stratified, random survey of 464 economists and economics graduate students in the US, 92.9% generally agreed or agreed with provisions that "[a] ceiling on rents reduces the quantity and quality of housing available.
- By capping the price of housing, rent control can increase demand and reduce available supply, causing a shortage. Thus exacerbating a problem that already exists in large cities.
- The presence of rent control regulation is not always tied to property tax law. It is theoretically possible to place undue burden on landlords if property taxes or other building expenses rise with the popularity/population of urban centers but rent does not.
- Renters in rent-controlled units are less likely to move, which means they may be unwilling to take jobs that are farther away from their current apartments. This is bad for the economy.
- Rent control restricts the property rights of the property owners, as it limits what they may do with their property.
In an interesting real world example, Boston eliminated all rent control laws in one fell swoop in 1994. This is from a New York Times article:
True, the pace of residential construction in Boston has accelerated since rent control was repealed in 1994. True, too, more neighborhoods that were once considered dangerous or dilapidated are becoming gentrified and more attractive to developers. But equally true is the fact that more working-class families, faced with soaring rents, are moving two or three area codes beyond the 617 exchange, and that homelessness and overcrowding are cresting. So parsing out how rent decontrol has influenced these changes is subject to a good deal of interpretation.
The presence of rent control legislation quite obviously has lead developers to try and work around it to maintain some free market ability. This has lead to some interesting situations. Most notably developers will often add renovations/benefits for those tenants that are not rent controlled while attempting to exclude those tenants who are. Two examples are the "poor door" and the so called "fitness apartheid". The "poor door" is when a nicer more luxurious entrance is built that is either purposefully designed to only give access to non rent control units, or that the landlords simply refuse entry to rent controlled tenants through by use of a security guard, while the older less luxiours entrance is reserved for the rent controlled units. "Fitness apartheid" is a case when an apartment building added a high end fitness facility to a building but made it only key card accessible and only for those tenants without rent control.
If you believe that rent control is necessary or a net good, these events raise a secondary question about how far the subsidized housing benefits extend, and whether or not such cases of exclusion constitute discrimination or merely market appropriation.
I would like to make this thread about any and all forms of housing/rent legislation that directly impact landlords, so if I have missed some in the OP feel free to discuss anyway.
I'm guessing most of you hippies are pro-rent control so I will probably play devils advocate for a while.
"The world is a mess, and I just need to rule it" - Dr Horrible
Jebus314 on
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SF is basically a perfect storm of housing fuckery.
Also, "poor doors" aren't really caused by rent control. I think you might be conflating two things there.
(BTW I'm anti-rent-control, just to be clear.)
the "no true scotch man" fallacy.
What else would it be caused by?
Affordable housing quotas on new developments, which I suppose might be easily confused with rent control, though they are different policies. You may also see this referred to as "mixed-income development" or "inclusionary zoning." (Everybody hates the word 'quota' these days.)
Rent control is a ceiling on rent increases on existing developments, either on all rental units in a city (as in San Francisco) or on developments older than a certain age (as in New York City).
Affordable housing quotas often function similarly to a price ceiling, but not necessarily. Sometimes the only requirement is that they're open to tenants who receive rent subsidies such as Section 8. Either way, they only affect new developments.
Rent control policies usually don't restrict what a rent starts at, either when the law is passed or when a new building is built. In other words, in rent-controlled San Francisco or Oakland, a developer can price a luxury penthouse at whatever rent he wants, and nobody will stop him. But he can't raise that rent except under a certain mandated threshold.
Even when affordable housing quotas do restrict what a rent starts at, they may (or may not) restrict later increases. You can see how that might have the opposite effect on migration and gentrification.
In the OP, you mention that only four states in the US allow rent control. Many other states have or allow affordable housing quotas; Oregon for instance has a pretty robust statewide affordable housing policy and Portland institutes affordable housing quotas on large developments. Seattle has tax incentives for mixed-income zoning; Massachusetts has government subsidies available to developers.
the "no true scotch man" fallacy.
"There are bugs in the doorways, we need to raise rent to reduce the number of bugs in the doorways." Shit like that every fucking two months (and also, there were never any less bugs in the door ways, or anything else they ever said).
I started living there @ $590/mo at the end of one year it was up to $820/mo
I'm sure that the tenants who still live there will be getting a note on the doorways,
"Guy on internet posted about our shitty practices, to combat this we will have to raise rent starting next month."
Interesting. I would like to make this thread about any and all forms of housing/rent legislation that directly impact landlords but I'm having a hard time finding info on affordable housing quotas. Section 8 seems like it's a different animal since, at least in theory, the landlord is still pulling in the fair market value of rent for the apartment.
They're usually implemented at the municipal level as part of the planning and permitting process for new developments. You just don't get a permit from the city to build your new apartment building if you don't play ball with the city's affordable housing policies. Consequently they don't get a whole lot of public attention. They're so different from state to state and city to city that I don't know what generalizable conclusions we could make about them. That said, it might be just my own ignorance talking. It's an aspect of housing policy I'm not personally well-versed in.
the "no true scotch man" fallacy.
I actually am more interested in the general idea of affordable housing legislation rather than specific implementations. Is it ever a good idea? Is it a right of lower income people to have options for affordable housing in highly sought after locations? Is exclusion of lower income apartments from nicer amenities discrimination or not? Ect..
Although I do acknowledge that often times where an individual comes down on an issue will depend on the details.
As for types of policies, I oppose rent control and I believe that we should abolish the mortgage interest tax deduction. I'm suspicious of affordable housing quotas that involve price ceilings. I also think that we should err on the side of increased housing supply, even when entrenched residents oppose new developments, and that we should err on the side of increased density, and err on the side of mixed-use zoning (ie, businesses and housing on the same block). You don't need to have highrises everywhere, but mixing up 3-5 story apartment buildings with townhouses with single-family detached homes with retail businesses can do a lot to simultaneously improve quality of life while keeping rent from skyrocketing. And, of course, transit.
Subsidizing rent is better than fixing a price ceiling on it, but that requires wealth redistribution. Rent control laws pass because landlords are easy targets for public ire; meanwhile wealth redistribution has obvious difficulties in the US.
I don't like 'poor doors' or similar exclusionary construction, but they're so far down on my priority list of issues that they elicit no more than rolled eyes and a yawn from me.
the "no true scotch man" fallacy.
Tried this.
Makes ghettoes.
That's what mixed income development attempts to fix.
In the UK, council housing was not perfect but created more pleasant communities than ghettoes. The secret was that it was not just for the destitute but also for lower-income but stably employed families. If you reserve government housing for the destitute you get slums, because you get all the people with serious life problems (eg drugs, mental illness) concentrated in one area.
more problematically, local government will generally have issues dealing with large numbers of mentally ill or antisocial people concentrated in an area, never mind concentrated in an area via the use of apartments, which is a residential style that requires more consideration of one's neighbours, not less. Hoarding trash, maintaining dangerous levels of humidity, or defecating on the floor in a house is problematic for the resident, but in an apartment it can render the whole building uninhabitable, and by definition you cannot use the threat of expulsion to force the occupant to obey the rules or leave.
We have ghettos now, but if the government runs a program like this we can at least not have homelessness. If the concern is that these things will have lots of people incapable of managing their lives, and thus making life bad for those around them... Society has people like this, but if you have them all in one area you can more easily provide them government services.
Poor people all end up gravitating towards one part of town anyways and cause lots of problems. I live in the nice part of my city, we don't have homeless people. People here have a lot of sympathy for the homeless, mostly cause they never see them. But when someone nearby ends up homeless it won't be long before the police drive them into the bad part of town.
Edit: In relation to means testing, can you point to many instances of people earning less money to take advantage of the earned income tax credit? Additionally, is it your position that people have to be talked into the idea that making money is desirable?
If you just blanket rent control everything, through any of the methods mentioned in the OP, it does no one any favors. You end up with a shitty situation where lots of people want to move, but they don't want to give up their rent-controlled apartment that was so hard to get, and no other rent-controlled apartment is available because the people living *there* don't want to move *either*. Meanwhile, no one is building new apartments because it's unprofitable unless you rent them out for exorbitant prices.
But the other extreme is bad too. With no rent control, you get shitty situations where someone who has been living in a poor area their entire life, and basically making ends meet but never being able to save up enough to buy a house, and then their neighborhood suddenly becomes trendy for whatever reason, so the rents jump and they get kicked out.
I think my preference is to limit rent increases to something like 10% a year the first 5 years you live somewhere, and 3% a year after 5 years. Oh, and let renters deduct rent from their taxes the way homeowners deduct mortgage interest.
Government-owned housing with immediate availability to social workers is a good thing for mental health care. For people who are merely poor, directly subsidizing rent is cheaper, easier, and gives the subsidized more control over their own lives.
the "no true scotch man" fallacy.
I don't understand how this happens. I mean, I understand that it does pretty reliably occur, but has anyone ever tried to figure-out why?
A subsidy is not necessarily partial.
the "no true scotch man" fallacy.
I'm super biased though.
It’s not a very important country most of the time
http://steamcommunity.com/id/mortious
Combination of racism and economics and broken window effects.
Too many people of color in an area leads to white flight and depressed property values because racism. That exacerbates existing racial disparities.
Too many poor people in an area depresses economic growth. As much as businesses like cheap property costs, they also like nearby customers who have money to spend.
Too much government project housing was built on insufficient budgets, leading to cheaply made, ugly buildings that nobody wants to live next to.
And all of the usual crap that goes along with poverty - crime, mental illness, homelessness.
the "no true scotch man" fallacy.
...That's a thing that people actually do? Like, "Oh shit, my neighbors are black. Time to pack-up, honey, we're moving!"
The poor and downtrodden generally have really, really bad habits that end up taking over their lives. If you live a life that has very little upside to it, you tend to seek out things that give you an immediate high like drugs, hitting a jackpot in gambling, and sex (prostitution) to name a few. These elements attract the "low lifes" society and repel pretty much everyone else, which leaves the area to those that ultimately don't really care anymore.
When you are poor and you get an unexpected $100, the first through 100th thing on your mind is spending it NOW and getting something in return. somewhere in that second hundred list of things will be saving it for later incase you need it, but you never do because if you don't spend it now the bank or someone else will for you and there isn't any kind of high or satisfaction from that use of the $100.
You can have decent project housing, but it has to be mixed in with other development. You don't want to devote entire city blocks to it.
the "no true scotch man" fallacy.
some factors:
collapse in nongovernment social support networks (because family members with resources to help will move away), combined with increased government social support costs that cannot be met from local funds due to (1) lower tax revenue due to local poverty (2) concentration of costs in one area
difficulty in policing antisocial behaviour due to physical factors (buildings that are good for privacy - short lines of sight, lots of blind spots - are also good for crime), social separation from the community stemming from physical separation
prefabrication techniques used during postwar construction boom prone toward expensive failures and heating costs. endemic vandalism stemming in part from an absence of a sense of ownership. endemic corruption amongst building management stemming from power to allocate building upkeep.
local incentives in disposal of federal/state grants - political will only extends toward moving slums to the periphery, but not supporting their growth into new towns; therefore failure to provide funding for schools, roads, etc. white flight. propensity toward cronyism if the local community is politically engaged at all.
Not even going to disguise it
https://www.google.com/search?q=white+flight
EnjoyPlease don't kill yourself from the depression this will bring you
(the alternative is centrally provided block-granted revenue, a la the UK, but beware a collapse in will to provide central funding, or chafing at the level of funding leading to demands for regional autonomy)
Aha! I knew it would be more complex than--
Oh, my sweet summer child.
the "no true scotch man" fallacy.
http://www.theatlantic.com/national/archive/2013/03/the-ghetto-is-public-policy/274147/
And so on with Coates' stuff.
He talks about this a bunch.
A ghetto is public policy because a status quo is always public policy; a stance of making no changes is a stance in favour of the status quo. But saying: a ghetto is public policy because the state legislated some well-intentioned policy that was exploited by slumlords, and then the state didn't protect us from these slumlords, isn't tenable - that's now how executives work, that's not how legislatures work.
I would disagree that redlining was in any way 'well intentioned' (well, unless disenfranchising / ripping off black people somehow counts as good intentions).
I used to support public housing, for example. Then I was shown how often public housing just turns into destructive ghettos, so I reversed my position because it doesn't matter that I want it to work - it doesn't work, so fuck it, why not support solutions that will actually be beneficial instead?
I've had this conversation with my mother many, many times.
"A more innocent time? When was that? When blacks couldn't vote? Wanna go back further, when they burned witches?"
She gets it now that I explained why she can't have Medicaid in Florida.
therefore racial discrimination shifts to its nearest proxy, namely residential neighbourhood, since ethnic segregation happens to be another reliable feature of American community formation
...We're talking about the same type of redlining, right? Where banks and businesses would offer services to white people but not black people in certain areas?
I'm not sure how you derive from that policy the idea that 'overt discrimination by skin color' is 'unacceptable'.
EDIT: As to the issue of the slumlords burning their own buildings down, I believe Coatse's point is that such slumlords would not likely have been able to get away with something so flagrant & diabolical if the tenants weren't mostly poor black people.
No: explicit discrimination with a paper trail is different. The essence of redlining is the use of proxy characteristics that are highly correlated with being white or black. This might not matter in a country with a pragmatic disregard for procedural justice, but civil rights in the US is intimately tied to a notion that due process is the be-all and end-all of social justice, so the bureaucratic machinery matters for how one might detect and enforce rules against redlining, particularly if local government is uncooperative or the alleged victims themselves are hostile (tenants might not like their slumlords but they might fear being homeless even more).
well, that's the essence of local government, isn't it? Nobody owes you better politicians than the ones you elect yourselves, and if you have a system that relies on political connections to achieve justice, then...
http://en.m.wikipedia.org/wiki/Blockbusting
What makes Blockbusting such a fucking despicable practice was that it was a sustained propaganda campaign against African Americans.
It was white owned companies that built and perpetuated the stereotype that blacks neighbors where a bad thing. Making white people sell their houses at a loss and then selling the houses to African Americans at the old price. The white companies then let the properties decay because it was more profitable that way.
No wonder White Flight left bad blood across Urban America.