Sunday, July 08, 2018

This is why rent control doesn't help the people it's suppose to.

Normally businessey stuff isn't for the weekend,  but Mr S. met a new guy and came back with a crazy story that I think is super interesting.

Now the reason I was  interested in this story is I lived in a rent controlled building in East Palo Alto when I first started out. It was on the border of EPA and Palo Alto. At the time, white people didn't live in deep East Palo Alto. You lived on the border or not at all.

So economically - I understand why rent control doesn't work. Landlords can't raise rent enough to cover all the property tax increases they get every year. Since they are only able to raise the rent a certain amount,  they can't afford to make any repairs and pay the extra taxes. This is what happened in my case. But the landlord constantly raised the rent anyway and everyone in my building was always going to court with him which sucked. This made me move as soon as I possibly could afford it.

But the guy Mr S. talked to had a slightly different thing going on. He was an engineer making ~really~ good money. He lives in Union Square in SF in a rent controlled building. Allegedly the rent is half of market rate. He doesn't work in the city,  so people were asking why he didn't just move. The traffic is insane.

He told Mr S. that he was ~never~ moving. They were going to bring out his dead body first.  He had actually considered moving back to Europe for a while, but didn't want to lose his rent controlled place. So he pooled his family resources together, and they were going to pay the rent on the SF apartment while he was living in Europe. And obviously, if you can pay rent on two places, you aren't exactly poor.

I've heard a lot of crazy stories about rent control. But this was probably the most interesting one I'd ever heard.


  1. Capital of Texas RefugeeWednesday, July 11, 2018 12:09:00 PM

    A friend was telling me about an apartment building in another town where the local housing authority got the bright idea to try to solve more than one problem at a time ...

    They thought they could zone in a new mid-height (six story) tower block a few years ago that would be attractive to reasonably well off urban dwellers, but when that didn't entirely pan out, they also started taking in a lot of "section 8" voucher residents while trying not to get noticed.

    This turned out as you would expect.

    PODS and other freight containers started to show up in the parking area -- they were for the people moving out, the ones who didn't show up with professional movers in new trucks and a packing crew.

    Beat to crap non-branded moving trucks with dodgy looking crews (probably relatives) started showing up in the loading dock -- they were for the people moving in.

    Professionals moving out, government hand-out recipients moving in, or at least that's what it looks like to him.

    The first few years of the apartment building and several others near it led to a rise in property tax revenue, so the small town/city had enough money coming in to pay to fix roads, utilities, and so on.

    Some of that money's still there in the form of Uncle Sugar payments, but the nearby shopping and restaurants are slowly being affected. In a town of about thirty restaurants, six of them closing within a year is a really big deal.

    As for the roads, my friend tells of potholes that will swallow a car tire whole that have not been fixed for months.

    Basically if a town or city wants to screw themselves royally when it comes to their tax base, they should seriously consider rent control or turning buildings that were meant for people with productive jobs into housing for government benefits recipients.

    My friend is also moving -- two of his four neighbors were forcibly evicted, one of which by the police who also showed up with an ambulance and EMTs to sedate the crazy fucker they came to arrest. The third neighbor is obviously on multiple forms of government support, and the fourth neighbor is a gay couple who thinks that in-town/in-city living is faaaaaabulous despite all of the crazy crap going on around them.

    The third grocery store in five years just moved in (after the previous two failed), so my friend can get a few things without having to drive on Potholeville's faaaaaabulous roads, at least if he wants to dodge the murderous New Residents of Potholeville who shoot people in ways that are not covered by the local newspaper. (Tourism's also probably down.)

    Meanwhile, out in My New Town Not In Miami-Dade, road crews and the county sheriff's department were out at 2 AM working on repaving sections of the road and fixing potholes. The road had only been built out the way it is about six years ago, but the county and the state aren't taking chances.

    No surprise then: my new area is actually a step up from Brickell Avenue, and most people's "fourth vehicle" is some kind of boat. They have plenty of tax money to make sure stuff is going to continue to work well, and the voters vote in people who can Get 'Er Done.

    It's still Redneck Florida though -- the twenty-four hour gas station nearby also has a twenty-four hour bait and tackle shop next to it, just so you can get out there in the early morning twilight to do your fishing. :-)

  2. That is a very Californian thing. We've been doing that for a decade now. So far without much of a problem. It's apparently a nightmare to fill the units on the under market rate side because well, rich people don't want to live next to poor people. I"m guessing that if the housing market were different, there might be a different outcome. But these days you take what you can get and suck it up.

    Next time I get to Florida I will have to go through the rednecky part. I've only done the Maimi to Key West thing. I mean, it can't be worse than Arkansas. They don't have a single Starbucks there. And no Cubans!