California's housing situation is a mess. Proposition 10 isn't going to help

http://www.latimes.com/politics/la-pol-sac-skelton-proposition-10-20181008-story.html

by kimsk112 • 8 years ago

3 3 8 years ago

refurb2• 8 years ago

If the state loosens the reins on rent control, watch out!

Right now, single family homes are exempt from rent control. An owner can raise the rent as they see fit (within reason). If SFHs come under rent control I think you'll see a lot of people just not renting their homes or condos out at all.

This happened in Toronto last year. Similar to SF, units built after 1991 were exempt from rent increase limits. Now it's all units.

So if you owned a condo in Toronto and it was worth $600K, it's probably worth a lot less if you're currently renting it out because that tenant has just locked in their rent for the foreseeable future.

kimsk112• 8 years ago

Then that'd be a good thing? If people are not renting their homes or condos out, they can't just let them sit empty and will have to sell them at some point which increase housing supplies.

refurb2• 8 years ago

They certainly can leave them empty. There are ~20,000 vacant units in SF where the owners have determined it’s cheaper to keep them empty than rent them out.[1]

They either keep them as second homes or hold as an investment (no tenant means when they sell the price isn't depressed).

If real estate is appreciating 10% per year and you own a $2M home, that's $200K in appreciation each year. Sure, you might get $60K per year if you rent it, but if you have rent control, you'll never be able to sell it at market rates.

[1]https://sf.curbed.com/2017/7/12/15961486/sf-tax-landlord-hom...

California's housing situation is a mess. Proposition 10 isn't going to help

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