While Los Angeles County built the most out of any California county in the years between 1980 and 2010, it was waaaay less than it needed to keep housing prices from getting ridiculous. For comparison, in the same 30-year period, "the number of housing units in the typical U.S. metro grew by 54 percent, compared with 32 percent for the state's coastal metros. Home building was even slower in Los Angeles and San Francisco, where the housing stock grew by only around 20 percent."
We have the technologies to increase housing supply, but we've collectively made deploying them illegal.
> If L.A. is worried about housing affordability, the real solution is to build more housing
And that's precisely what the city is doing. Housing permits are up around 40% YOY, about 70% of which are for multi-family units.
But that's not directly related to the purpose of rent control, which is not to keep housing throughout the city affordable, but to keep longtime residents--especially older individuals--from swiftly getting priced out of their particular community.
At any rate, I'm not sure how construction of new housing in Los Angeles has been "made illegal" as you suggest.
Thank you for making an accurate reply. It is worth noting that the situation in LA is very different than in SF -- people may be using the state of affairs in SF as a comparative, and it's just not the same: there is now and has been much more intensive housing development in LA.
Certainly there are many NIMBYs in LA, but the regulations in LA are not tilted as strongly against development as they are in SF. In the past years, there has been a lot of infill development in Hollywood (especially), mid-Wilshire, and around downtown. It has been encouraged by changes in zoning regulations that lift some parking and density rules, especially along transit corridors. These changes have been supported by two mayors now, and by most of the City Council. (One of the sued parties in the OP had units in mid-Wilshire, and another in Hollywood; the other two were in Venice.)
The resulting density increases have caused considerable gnashing of teeth among older residents, who think of LA as a city of single family residences. There is going to be a proposition on the ballot soon, seeking restrictions on this development, and it's not clear where things will shake out (http://la.curbed.com/2016/1/21/10844688/los-angeles-anti-dev...). I don't see it passing, but it's too early to be sure.
It's also worth saying that it's often poor renters who are forced out by these changes -- their little three-story apartment building is torn down and replaced by a 6-story mixed-use building. That's the message the City Attorney is trying to get across to landlords.
In addition to the comment above, I'd view this as an update to zoning laws and renter's rights.
As we become increasingly a nation of renters instead of owners, these sort of issues need to be addressed.
Great point. But not only are we becoming a nation of renters but we have also become a world of urban dwellers. Additionally as wealth becomes more concentrated more residential real estate purchases are not primary residences but income properties and in many cases a means of hiding money. The majority of new construction in many large cities appear to be "Luxury Condos", glass and steel structures designed to attract "hot money" inflows and not targeting the working or middle classes.
"from [ever] getting priced out of their particular
community."
FTFY. Rent control is a bogus solution. Rents rise when demand exceeds supply. It shouldn't be that hard to get a reasonable realtime measurement of demand and make sure that you're publishing the data showing that change in demand while simultaneously making sure that you're approving new housing projects at an equivalent rate. Doing so would have the same impact of rent control via market dynamics.
You say that like housing is fungible. It is not, neither for low-income residents who have formed a community around a location, nor for wealthy people looking to move into a trending neighborhood.
Rent control has some economic merit - it quickens price feedback to those with the least inertia. Market inefficiency is a thing, and if someone has been in an apartment for a decade it's going to take a much greater increase to make them consider moving compared to simply dissuading someone who is thinking about moving to an area.
It's just a hunch but I suspect that induced demand[1] works similarly in the housing market as it does with traffic, at least for otherwise desirable areas like Los Angeles/Southern California.
"Build more housing" will tend to make developers very wealthy while doing relatively little to reduce rents or property prices, just like "build more roads" doesn't help traffic.
Induced demand in housing would require people to buy second or third homes because they were affordable. So long as people are only buying or renting one home, there is no induced demand from housing stock.
The induced demand does not come from those who already live in the area buying/renting multiple units but from new people migrating in (that's why I included the "...otherwise desirable areas like [LA/SoCal]" in my original comment).
For areas like LA, you can assume that there is a very large pool of people with at least some desire to migrate in (just like NYC, Chicago, etc). One of the primary throttling influences on this migration is the cost of housing, just like one of the primary throttling influences on "Will I drive to location X" is "how bad is traffic between here and there?" (what is the cost of driving).
Increase the housing stock (build more roads) and it will almost immediately be soaked up by those eager to migrate in (drive), before it has the chance to sit on the market for a while and exert downward pressure on prices.
Perhaps its because those who can afford to buy due to their socioeconomic status can vacuum up properties at cheap interest rates, and then profit by renting to those who can't afford to buy?
One part of the solution is to drastically curtail subsidies for landlords (depreciation/mortgage interest deduction)
I've heard that brought up a lot with road expansions. What I haven't heard (and would assume) is that even if the delays stayed consistent your throughput (therefore economy) grows after the expansion, right?
Just growing the economy (as "economy" is currently defined) may well leave people less happy, with less access to services and infrastructure because the government has failed to keep up.
Just being in a "larger economy" may mean each person is burdened with more air pollution (e.g. China and India) and more crowded conditions than when the economy was smaller, while reducing access to various natural attractions (e.g. beaches, forests, open spaces).
Where are the economic models that take these sorts of economic costs to people into account?
I'm often surprised so many people are persuaded to embrace various policy positions by general statements to the effect of "studies say this increases GDP."
As in the old saying "War is much too important to be left up to the generals", it seems the economy is too important to be left up to the economists.
If they chose to expand the road, the assumption is that they considered the obvious cons (displacement during construction, cost of land and labor for construction, added pollution and noise, change in demographics, etc) and were hoping for the obvious pros (reducing traffic). I always hear people quick to say it won't reduce traffic, but I never hear alternatives that are proven to work. By dismissing expanding a road over that one thing, they also seem to dismiss the other pros (I mentioned possible gains in economic throughput) and the cost of inaction.
Throughput does not directly equate economy. More roads leads to more scattered land use, and there is no 1:1 relation between land use patterns and economic productivity (additionally, there are many other aspects to this like qol and environmental concerns).
Well, yeah, what I said was a simplification and an assumption. Throughput doesn't directly equate to economy, but it's one of many tools that could be used of the goal is growing the economy and needs to be balanced against other factors.
Maybe I should have elaborated more in my reply. My point was that I've heard that argument /a lot/ but I never hear alternatives or what I feel like is an honest discussion (maybe I'm just out of the loop). The scenario usually starts with, "a road is busy and citizens what something done about it." The obvious choice is to expand the road. This obvious response is, "that won't fix traffic." What I'm saying is there are other reasons to expand and I also haven't heard alternatives to expanding the road that are any more proven to work--which I'm genuinely curious about.
The key is reframing 'mobility' as 'accessibility'. The fundamental 'solution' (although I dislike that word because it implies a global maximum) is different planning and incentivizing users of infrastructure to make choices that better align with the common good; put less nice, to force them to internalize their costs.
There are two goals that are in direct conflict in your scenario: one is 'keeping voters happy', the other is 'make efficient use of infrastructure, and minimize externalities of transport' (this goes for other issues as transport, for example water management, but let's keep it concrete for now). The 'solution' in your example is simple, from an engineering point of view: toll roads, congestion charges, smaller and more dispersed schools and healthcare facilities, denser residential development in fewer urban centers (=less sprawl), and a bunch of other, smaller measures.
Obviously this is impossible (no single administrative unit can do all or even several of those things), as well as too slow (we're talking 5-10 year implementation timelines, + another 5 or 10 for the effects to really set in). It's all about trade offs, and stopgap measures to keep things rolling in the mean time. I've been on all sides of this: informing the public about these things (haha good luck, even the 'average' citizen who has time to get involved in this is a raging lunatic, in my experience - let alone the real troublemakers), convincing policy makers to (also) look at the long term, infrastructure builders/maintainers who are essentially firefighting most of the time, ...
One of my former colleagues wrote his PhD thesis on the effect of remote working on transport demand; if you're really interested, email me and I'll see if I have a pdf somewhere.
(I've been working in this field for 15+ years, which is not to say that I know everything or even that that means that I'm right at all, but I've thought about this longer and harder and studied it more rigorously than 99.9999% of the population)
How about the opposite argument: if you have a supply constraint with hotels, why not build more hotels rather than convert housing to quasi hotels that skirt taxes and impact housing supply?
My friend bought into a condo hotel a few years ago. Still a great model. Airbnb could easily move into that sort of model and outsource ownership, management, etc and follow the law. But I guess that doesn't apply to them.
> My friend bought into a condo hotel a few years ago. Still a great model. Airbnb could easily move into that sort of model and outsource ownership, management, etc and follow the law. But I guess that doesn't apply to them.
You're not going to be all disrupty with that attitude.
What happens when you build more supply, but increasing amounts of people just buy up the units not to live or rent out, but in order to run virtual hotel businesses on Airbnb?
The better supply side solution to increase available housing stock is to build more purpose built rental. This would eliminate the possibility of new rental supply turning into short term rental.
If you keep adding supply, the bottom will fall out of that market as they compete with one another, and the market will balance out as they sell, or seek long term tenants.
The question is, is it feasible to build enough supply for this to happen?
I mean, if SF ever hit "affordable" on a median family income, the population would probably be tens of millions.
Keep in mind that tearing down old housing and building new is not very cost efficient: you are paying for land, and the old structure (which you are tearing down), and the demo of the old structure. I live in LA, and my structure, which was built in the 70s, is still valued at more than the land it's built on.
If enough people keep getting stabbed in San Francisco, maybe the tourists will stay away! Only slightly not serious. Web search for "stabbing" and "san francisco"
>What happens when you build more supply, but increasing amounts of people just buy up the units not to live or rent out, but in order to run virtual hotel businesses on Airbnb?
Then airbnb prices decline or units go empty so listing on airbnb becomes unprofitable. Supply and demand is very real, it's not like some ideology that hasn't been demonstrated day in and day out. Please read up on an intro to econ!
And what happens to the people in the meantime? How long does this take before we have a satisfactory outcome, which would be people not being priced out of housing?
If you chose to rent and cannot afford the neighborhood you live in, I'm not sure why you are entitled to be there at the expense of others who want to be there as well.
Bluntly, yes. As long as the market is poorly supplied, people will keep coming up with creative ways to get around regulations to extract the market price out of their assets. Fighting that is like trying to convince a lion not to eat you by yelling rather than giving it a steak.
If the market price is kept low enough through continuous supply, Ellis Act violations would be a non issue. There is a reason this isn't a big problem in unconstrained cities.
Feel free to start a ballot measure to not only have the Ellis Act repealed, but all current enforcement cases voided (as you are apparently advocating), then. In fact, if you did so, I'm sure that not just AirBnB, but Graham, Thiel, Andreessen, Khosla and hordes of VCs will be more than happy to bankroll it for you. In fact, they'll be bending over backwards to do so -- in order to, you know, secure their "legacy."
And I can just see the bus shelter ads they'll be putting up already -- and the side-splitting hilarity that will be sure to ensue, up and down the state. Remembering how swimmingly well AirBnB's efforts to "educate" local voters went down in a certain recent election.
Yes, LA should build more housing, but it doesn't help when people remove housing from the market. This is a huge problem with AirBnB, they're encouraging people to remove supply from the housing market, often in the areas where more housing is needed the most.
Increases to property tax are tightly capped. If housing prices skyrocket (which they have for a long time) the taxes on the houses barely rise at all. It highly encourages never selling property, and largely decouples property tax from the actual market price.
All this results in a situation where the state with the biggest economy is constantly broke.
If you want build, baby build, move to Texas. They've been doing that, and by some definitions been successful. If you want the quality of life that exists in the San Francisco, follow the polices that San Francisco has done for the last 50 years. Don't Fvk with success.
San Francisco isn't a success. The quality of life is garbage unless you are rich (>150k annum). The crime (car breakins) and hostile homeless people make it feel unsafe.
The only thing that people want to preserve there is their property values. Constantly voting against new housing is just a "fuck you, I got mine and don't want to share" stance that is extremely close minded. It's basically a giant country club.
Most families in SF either have been there for decades or do in fact make 150k/yr. It's not being rich - it's just the local standard. This is the mark of a successful city (even though in the process culturally a lot was lost unfortunately) There is a small section of the city that has crime. That pretty much goes for any large city - and it's tied very closely to the city's efforts to help disadvantaged people.
If SF really wanted to get rid of the homeless and crime they definitely could with some NIMBYism. They'd shut down all the low income housing and stop helping the disadvantaged and increase arrests.
Context: grew up in SF. don't live there anymore.. but i don't recent the changes to the city. Life moves on
Eliminating low income housing doesn't eliminate homelessness.
>Most families in SF either have been there for decades or do in fact make 150k/yr. It's not being rich - it's just the local standard
Nope, most families have just been pushed out because it's hard to find a job that pays that much. If your policies are generally "screw the middle class", of course high income is the standard for the people that have managed to remain.
Also, claiming the massive income required relative to the rest of the country doesn't mean rich is ridiculous. That's like saying people who stay at the Four Seasons aren't rich because they all have to pay a lot per night.
San Francisco has some of the highest property values in the world. By what definition is that a success? "Don't fuck with success" sounds here like "dont fuck with lowering obscene property values because then homeowners might be slightly less loaded than they already are".
It seems like there has been a growing body of "bad news" for Airbnb lately. Several major European cities (Paris, Berlin) are tightening regulations and limiting short-term rentals. NY, one of Airbnb's largest single markets, if not the largest, stands ready to essentially ban "whole apartment" rentals entirely as other cities seem to be gearing up to consider their own measures.
I'm not saying that any or all of this threatens what Airbnb is trying to do, and in fact I think such restrictions will make model better and more sustainable in the long run. Still, for a company that is, out of the necessity of their valuation, as bent on maintaining growth as Airbnb, the skies appear to be darkening.
So a landlord pulled an illegal dick move and is being sued for it by the city in accordance with their laws. Why is this newsworthy?
Oh right, because putting "sued" and "airbnb" in the title equals clicks, despite Airbnb having jack shit to do with this case beyond being the unfortunate 3rd party.
As I understood it, the violation was because they re-rented the property without notifying the former tenants and giving them whatever the legal term of art is for "dibs." I could be wrong, not a lawyer.
And right in the article itself it says that even AirBnB stands opposed to the kind of illegal move these landlords made:
>"... we strongly oppose real estate speculators who illegally evict tenants and abuse platforms like ours in search of a quick buck,” Airbnb says in a statement.
Yes, they oppose it so strongly they refuse to continue to do business wi- ... oh, they still cash the cheques? Well then. How much is that opposition worth?
So Airbnb is now responsible for enforcing local laws for all it's applicants, even though a huge majority are up to no such shenans?
This is such a non-problem it's ridiculous. The regulation to prevent this not only was proposed, not only was enacted, it's now being enforced by the city with damages likely to be awarded to the fouled renters. This is literally the best case scenario for one of these "grey area" startups causing some problems for regular people that has already been covered by proper regulation.
Tech companies being required to enforce regulatory burdens is not only impractical but it's also a very slippery slope to the orwellian future we claim to not want. Airbnb shouldn't be any more responsible for making users follow housing law than Tesla should be responsible for making people obey speed limits or home automation companies making people follow water usage rules.
There's plenty of valid criticism to be made about Airbnb not properly vetting their users when they offer up properties, but enforcing rental/hotel law shouldn't be one of them. It's not Airbnb's problem, it's the landlord's, as we're now seeing.
That's all true, but I hope the damages are significantly large that this landlord can never hope to recoup them from renting the property in question. Otherwise it'll just become a cost of doing business, not a deterrent.
-- if 20,000 per year are added to LA's population, you need more rental units.
Here's a potential SAT question in the 'Logical Reasoning' part:
"A large city experiences 20,000 population growth per year. Because restaurants, doctors, barbers, dentists, and other service providers are not growing fast enough in the city to accommodate this large growth in citizens, should the city:
[A] Provide incentives for new restaurants, doctors, barbers, dentists, etc. to move into the city and start operating to meet the need?
[B] Or should the city impose caps/limits on the fees/charges of those restaurants, doctors, barbers, dentists, etc. who already operate in the city, which will create disincentives for new operators to move to the city to satisfy increasing demand?
Supply and Demand. The demand for EVERYTHING is affected by 20,000 new citizens in LA each year.
In 10 years there 100,000 to 200,000 more citizens in LA.
With the disincentives for new landlords to enter the LA market, there will be an even more severe shortage of units.
"Shortage of willing landlords."
The old adage is this:
"You cannot price-limit, and regulate, and tax your way to an over-supply of housing."
It's really, REALLY awful that city leaders don't understand that.
Guess which cities have the greatest shortage of landlords?
Los Angeles
San Francisco
New York City
San Jose
(those are the U.S. cities with the longest period of landlord-reducing Rent control laws, by the way)
Can we PLEASE INCREASE THE FREAKING SUPPLY of willing landlords.
"You cannot price-limit, and regulate, and tax your way to an over-supply of housing."
Of course you can - you just tax tenants not landlords. If you apply a $10,000 per month tax on every rental property paid by the tenant there would be an oversupply of rental housing even in SF.
The real question is should LA be growing by 20,000 people per year.
The number of people even on HN that don't seem to grasp supply and demand is shocking. If HN is a relatively intelligent group, imagine how much of the general population will think just price limiting housing will work?
Sure, you can hate them all you want, but that doesn't change the stupidity of trying to pass laws that prevent people from participating in a market. Look how well the war on drugs is going.
No, it is your duty to work to get it changed. I imagine there are a number of industrial companies that feel workplace safety laws and laws banning the dumping of waste in waterways to be stupid, would you be ok if they ignored those?
That is surprising. I live in India, and there's no regulation around renting it out or asking tenants to vacate. As long as both landlord and tenant adhere to the agreement document, all is good. No government interference.
Government enforcing regulations asking a landlord that he can or cannot use his home for letting out to a person of his choice seems very regressive to me.
Sorry about that, with HN's 80-character restriction and QZ's affection for paragraph-long titles it had to be contracted somehow without being rewritten.
I don't think parent was pointing out a conjugation mistake. Rather, the point is how we will use different words to describe the same event depending on perspective - in order from least to most harsh, first-, second-, and third-person.
Not sure if you're merely trolling, but: I wonder if you live in the LA area? Because not many thoughtful people here talk like that any more -- not since Pete Wilson's time. Arnold Schwarzenegger flirted with it around 2005, but quickly back-pedaled.
I think the decline of this politics may have come from seeing where immigrant-bashing goes (typically, nowhere helpful). Or perhaps just demographics and the continuing integration of Latin American immigrants into the economy here. Just curious.
Since you did this again immediately after we asked you not to, we've banned this account. If you don't want it to be banned, you're welcome to email hn@ycombinator.com and commit to following the site rules from now on.
Housing costs would skyrocket - there would be nobody to build new housing, and the current housing would slowly become uninhabitable as it got dirty and light bulbs burnt out.
The problem with cheap labor isn't the people looking for a better life. It's that the rest of society ends up thinking they're above needing to know how to use a screwdriver.
Do you really depend on illegal labor to change a light bulb? Also, the construction workers that built my parents home up in northeast US were all locals (or managed to have impeccable English), so I find it hard to believe the rhetoric that there are no legally employed laborers.
The US would have a falling population without immigration so we'd be facing the Japanese situation of deflation and an eventual population crash (presumably). A lot of systems (pensions, social security, 401k, the stock market, most city governments and state budgets, et al).
There would also be the economic slump as you remove consumers from the spending pool and labor from the labor pool.
The massive gestapo/SS-like state apparatus required to round up so many people and deport them would take billions upon billions of dollars. It would also require shredding (what is left of) various constitutional rights and turn the US into a "papers please!" dystopia. This massive deportation police force would need to setup checkpoints on all major roads, in various public places, etc to even make a dent. Probably need to force all employers, even individuals hiring a contractor, to verify legal status. Outlaw cash to prevent paying people under the table too.
The impact to US citizen children would be devastating; millions who were born in the US and are US citizens would be forced to leave and go live in a foreign country they've never been to (and in some cases barely even speak the language of). It would permanently alter their economic and development potential as they wouldn't have access to US culture, education, etc. You may not think they are citizens but you're simply wrong. Since the founding of the USA (and via common law) citizenship has been jus soli, confirmed by SCOTUS precedents too.
If you're thinking of stripping their citizenship... trying to ex-post-facto do that on the basis of actions not taken by them and before they were born would require a constitutional amendment (besides being an immoral and shitty thing to do... We don't punish children for the actions of their parents; it's even in the constitution: No attainder or corruption of blood!).
Oh and the fact that unless you're Native American you're a descendant of immigrants so it makes you a massive hypocrite and an arsehole?
My statement was a bit hyperbolous, and I've no idea how much of that labor is actually under the table versus not. But coming from northeast values of basic self-reliance, you'd be amazed at the level of outsourcing relied upon by the middle class.
What are they complaining about. Under the new 'sharing' economy, you don't need to rent one place anymore. You can simply hop week to week from one AirBnB rental to another without being tied down. And you can also hop between jobs as you like without being tied down. This is all in your benefit. Isn't the new 'sharing economy' great?
Why get a job? The world is moving to gigs man. Solve the oft-cited zoning crisis that is preventing tall building from low density places like Manhattan and build massive apartment blocks.
Then you'll just need a few fiverr gigs a week and boom, you can rent a different, exciting new apartment every day!
The only noteworthy aspect of this story is that the city attorney is actually taking this particular rent-control law seriously enough to sue a landlord.
A lot of other laws are violated and the city attorney (and law enforcement agencies in general) just ignore the violations. So this tells us a bit about prosecutorial discretion in LA at the current time.
While Los Angeles County built the most out of any California county in the years between 1980 and 2010, it was waaaay less than it needed to keep housing prices from getting ridiculous. For comparison, in the same 30-year period, "the number of housing units in the typical U.S. metro grew by 54 percent, compared with 32 percent for the state's coastal metros. Home building was even slower in Los Angeles and San Francisco, where the housing stock grew by only around 20 percent."
We have the technologies to increase housing supply, but we've collectively made deploying them illegal.