Maybe less apartment dwellers and more home owners is good for the community?

Depends on your definition of "good for the community". Generally speaking, homeowners are more stable and statistically less crime-prone, but also much more affluent (so more tech workers, and less teachers or service industry workers), AND much less open to changes or progress within a community. So what are the community's values that we're looking to reinforce?

Why bother buying a house any more? The way I see it, the only reason to buy a house was so that we could lock in a monthly, predictable rate for the foreseeable future and into retirement. That's the only benefit that justifies the astronomical property tax that home owners have to pay but renters don't. If this passes, it may not make sense for us to own, so we will just sell and rent. Why bother with the expenses of owning (prop taxes, maintenance, repairs, etc) for no additional benefit? I'd rather just rent and have the landlord do everything for me. If others feel the way I do, then we could have a housing market crash on our hands as no one will want to take on the risk and expense of owning housing.

It could become more profitable to build condos in high-demand areas. But condos could also be subject to rent control. The general effect may be to reduce condo and single-family home purchases by speculators who plan to rent them out. It will depend upon lots of factors.- not just the prospect of rent control. But remember, lifting state restrictions on rent control does not automatically expand the reach of rent control EXCEPT when there is a local rent control law already in place that would expand ITS REACH if the 1995 state law disappears. And the talk is that Mountain View's Measure V (now part of the city charter) is just such a local law. The effect of the passage of state Proposition 10 in Mountain View as compared to San Jose, for example, should be the subject of a second article. Meanwhile, the matter of new and rehabilitated housing to meet the demand of 40 million Californians and millions more on the way needs to be addressed - but not in the manner of California State Senate Bill 827. As law, SB 827 would rezone California to permit big developers to build highrise condos and apartments (whatever height is in the version passed) most everywhere - and cities and counties otherwise in charge could not even require onsite parking spots. SB 827 would ruin residential neighborhoods across the state while lining the pockets of developers with billions upon billions in profit. With so much money at stake, figure that some special interests will continue to push SB 827 or a similar bill the moment this little impediment of a statewide election in November is out of the way.

"Those who cannot remember the past are condemned to repeat it." -- George Santayana

In response to The Successful Businessman you said:

“It was less than 25 years ago. Nevertheless, "Those who cannot remember the past are condemned to repeat it." -- George Santayana”

Yes, less than 25 years ago, Costa Hawkins was sold as the solution to the affordable housing crisis.

It failed.

We are NOT GOING TO REPEAT THE SAME MISTAKE AGAIN.

I predict this would actually decrease rent control in most cities. The burden of having rent control in one city would be so great for that city that eventually any and all rent control laws would be repealed by the voters themselves locally.

Let’s regulate the price of anything that’s expensive...

How about all colleges and universities can only raise tuition according to the cost of living? Private or public no matter
How about open heart surgery as well? That’s expensive

While we’re at it, how about price controls for staples like a gallon of milk?

I bought my house decade ago and it’s my retirement savings and now someone who moved into town is telling me I can’t get the market rate to rent it to pay for my retirement? I’m sorry but if you proposed that 20 y are ago when I was buying it’s valid. Now it’s stupidity......

This, of course, will make the housing crisis worse, not better, since it will drive landlords away from the business of renting.

News Flash! Owning rental property is a business, not a charity. When it becomes unprofitable to do so, people will stop doing it. The state cannot continue charging landlords more and more fees in order to rent property, then limit the ability to recoup those losses by charging more rent. In the end, the cities will lose.

City governments should stop trying to balance their budgets on the backs of those who actually invest in their towns for the long-term (landlords, business owners and home owners) while allowing those who have no ties (renters) to avoid any responsibility for paying for the services they use. Yes, it's expensive to live here, but it's a privilege, not a right.

Until term "fair share" starts to apply to paying for the services you use, this state will continue it's trip into the cesspool. I guess the state government won't be happy until the entire state looks like the streets of San Francisco.

Seriously "a local guy" - those are your examples? So only the rich should be able to afford college and heart surgery, or allow the poor to go to certain colleges and get sub-standard care (for some odd reason those things are more expensive in the US). Top universities have started regulating themselves, so that they can diversify. How many extra billions does a top university need, not to mention medical companies? Many prices are regulated, this does not mean the end of the world, it just means your neighbors can get the basics of food, housing and education. I'm all for value pricing, I'm in marketing, but there is room for some regulation.

@par - maybe it's a good thing that people will stop renting out their property when it becomes unprofitable to do so. Then maybe more apartments will get converted to condos (the condo complex I live in was once an apartment complex), thereby encouraging more home ownership rather than apartment dwelling.

What concerns me is that repealing Costa Hawkins opens the floodgates to imposition of rent control on condo units. If I ever move out and decide to keep the condo and rent it out, I have no desire to be subject to rent control. So I, and probably many other condo owners, will probably migrate to the short-term rental market, further increasing the housing shortage.

Well, here is another bit of information ICYMBI:

This report found here (Web Link from Globest.com:

“If rent control is expanded in markets like Orange County, IT WON’T MEAN THE END OF MULTIFAMILY INVESTMENT. GIANNOLA SAYS THAT IT WILL MERELY MEAN AN ADJUSTMENT IN INVESTMENT STRATEGY—WHICH COULD MEAN A BRIEF PAUSE AS THE MARKET ADJUSTS. With strong fundamentals and healthy demand, however, ORANGE COUNTY WILL CONTINUE TO BE A POPULAR MULTIFAMILY INVESTMENT MARKET, WHETHER OR NOT COSTA HAWKINS IS REPEALED. “Orange County is a fantastic market and has been for many years,” says Giannola. “I think that it is possible once Costa Hawkins is repealed that things will change. IT IS GOING TO CHANGE THINGS FOR A CERTAIN PERIOD OF TIME, AND THERE WILL BE SOME SHOCK. Rent control is in major cities, and there are a lot of components that people are not educated on yet. It is going to be a very interesting ride in the next five to seven years in Orange County.”

This is what people like myself have been saying all along. “Rent-Control” is not going to do what the critics have said. The Apartment Industry will adjust and in fact still make money. The only problem is that those who currently take advantage of Costa Hawkins and no Rent Control are going to find themselves out-competed out of the market.

Isn’t that so “Successful” Businessman?

psr hits the nail on the head. As it currently exists, housing is a business, people seeking to maximize profit through minimal labor. Where psr misses the crucial step is that no one should be getting rich off housing people, and to do that housing should not be a business. We as a community should be providing enough housing for everyone, not relying on rich, out-of-town landlords to do it for us while lining their pockets.

So what happens if I want to rent my currently owner occupied MV town home out for 3-5 years while I live or rent someplace else. Then after 5 years I want to move back in. But if I'm now subject to rent control measure V, can I do that? I thought the "just cause" eviction part of rent control says I can't have a tenant leave just because I want to move in. So I'm not allowed back in my home?

In response to Predictions question you asked:

“So what happens if I want to rent my currently owner occupied MV town home out for 3-5 years while I live or rent someplace else. Then after 5 years I want to move back in. But if I'm now subject to rent control measure V, can I do that? I thought the "just cause" eviction part of rent control says I can't have a tenant leave just because I want to move in. So I'm not allowed back in my home?”

You are no prevented from moving back into your home in any way even if Costa Hawkins is removed. There is one issue though. If the tenant qualifies for tenant relocation assistance, you may need to provide it. But if you take that cost into account and set aside a portion of the rent money to be a “resource” for that future problem say 60 months and $200.00 a month you will have $12,000 set aside for that situation.

Well that's good to know because it's honestly the "just cause" evictions that worry me most about rent control, not the price fixing. However, I'm still concerned. I know good people in San Francisco that own a house and legitimately want to move into it but are not allowed to evict their current tenants because of SF rent control which seems completely unfair to me. I'm assuming MV rent control operates much the same as SF rent control.

Truth be told at this point I would never rent my home to someone who qualified for these extra protections. They are likely the riskier tenants anyway, more likely to default on rent or break something and not have money to fix it. It's not worth the added expense to relocate them on top of more risk. Sounds harsh but that's life. I'd rather leave it empty. Create the law, create the loophole.

@Predictions above is so wealthy they can afford to leave a house they own completely unoccupied, while workers in our city are forced to live in their vehicles. Further evidence that relying on profit-seeking entities to house our community is the wrong answer. Talk about a rigged economy.

The issue with rent control is that owners have practically no say on what they can do with their property. If they rent out to a couple and that couple move in 2 other people unbeknown to the owner, you can't just kick them out. At 3% increases per year a unit that rented for $300 back in the 80's is now at the market value of $2500-#3500 in many LA areas. In 30 years the property taxes have gone up, the maintenance has gone up, water has gone up but property owners have had their hands tied.
They now own a unit that is far below market rents and through the years have had multiple people living on the owner's property, many being rented by rooms to other people and the tenant keeping the money that should go to the owner.
The property owner can not make inspections on the property to see what's going on. The only inspections allowed are to fix something, so tenants know the owners will be on the premises, everyone disappears like cockroaches.
Rent control does not help, it only hurts the housing market. Unless the government is going to cut a check for the difference of what owners are getting and what market rents are... then they need to just step off and mind their own business.

Except that I'm not a profit seeking entity. This is our family home and I'm emotional attached to it. Its a small townhome that feed to the lowest ranked school in the district, so I'm certainly not wealthy.

Doesn't quite support your argument but you go ahead and stretch the truth all you want to support your sob story.

In response to Predictions you said:

“Truth be told at this point I would never rent my home to someone who qualified for these extra protections. They are likely the riskier tenants anyway, more likely to default on rent or break something and not have money to fix it. It's not worth the added expense to relocate them on top of more risk. Sounds harsh but that's life. I'd rather leave it empty. Create the law, create the loophole.”

You are asking for legal trouble if you do. Your actions would be considered discrimination based on age and disability and a number of other factors because the tenant relocation rules are (Web Link :

In February 2010, the City Council adopted a Tenant Relocation Assistance Ordinance requiring landlords to provide relocation assistance if eligible tenants in four or more rental units have been displaced because of renovations, redevelopment, and similar activities. The City’s ordinance is intended to help lower income households with moving costs, deposits, and securing replacement housing.

The Council amended the ordinance in June 2014 to increase the amount of assistance. Voters approved an amendment to the City Charter entitled the Community Stabilization and Fair Rent Act ("CSFRA") on November 8, 2016, which provided an increase in the average income eligibility of households to 120% Area Median Income (AMI). Households are eligible for relocation assistance if:

The household income is 120% or less of the Area Median Income (AMI);

The household has a valid lease or rental agreement with the landlord; and

The household is not delinquent on rental payments.

Relocation assistance is provided as a cash payment to eligible person(s) on the lease or rental agreement. The following assistance is paid per rental unit, (not per tenant):

Full refund of a tenant’s security deposit;

A 60-day subscription to a rental agency;

The cash equivalent of three months median market rate rent for a similar sized apartment; and

An additional $3,000 for special-circumstances tenants, which are households having at least one person that is either over 62 years of age, handicapped, disabled, or a legally dependent child under 18 years of age.

Copies of the Tenant Relocation Assistance Ordinance are available by clicking on the link below. If you have additional questions or prefer to have a copy of the ordinance mailed to you, contact the Neighborhoods Division at 650-903-6379 or neighborhoods@mountainview.gov

Just understand that you can simply be misinformed regarding your ability to discriminate against those that are person that is either over 62 years of age, handicapped, disabled, or a legally dependent child under 18 years of age.

Please be careful?

@Livin in LA, your property taxes have gone up no more than 2% annualized over those 30 years, even though the value of that asset has risen far more.

Your horror at treating tenants like people ("like cockroaches") shows how we can't rely on the market to provide housing for people. You probably decry government assistance for people, but want the government to cut you a check because you think you're entitled to profit off of housing people.

Just to be clear, I am not a landlord. I am merely a home owner asking about renting a house out in the future IF this were to be repealed. My understanding is that landlords are allowed to discriminate based on income only (allowed to select the tenant with the highest income). If (all theoretical at this point) I were to only get applications from people who qualified for this relocation protection, you're saying the law says I'm required to rent my house to them? That doesn't make sense. But anyway, it's all theoretical at this point. Just trying to understand how this repealed could affect me in the future. Thanks for the info.

Renters are human beings like Home owners. Some ppl prefer to be renters and some ppl can't afford to buy a home. And there is nothing wrong with that. For a long time, rents were not rising like the way it is skyrocketing now. It is putting both families and single ppl who are renters in precarious situation like living in a car or an RV or to the extremely bad option of living under a tent in a park or on roadside. I Have been a renter for more than 25+ years living in Mountain View because I chose to be one. Even though I am not seriously impacted by the rising rents, I do think people need some protection. What is a community if it can' take care of the people living in it? it is really painful to see few greedy ppl in this forum who are anti rent-control because it is so painful for them not to capitalize on the excessive greed that is so pervasive.

There's no state law that restricts cities from putting rent control on individual houses and condos. All the cities with rent control have chosen to exempt such units, usually up to 4 units per parcel, from their rent control rules. This was not mandated by Costa Hawkins.

The Mountain View rent control has no vacancy control features, so rents reset each time the unit is vacated. It also exempts any property with 4 or fewer habitable units. Costa Hawkins has nothing to do with this.

I'm not sure who gave you that information, but those are two things prohibited by Costa-Hawkins: Web Link

"First, it prohibits cities from establishing rent control over certain kinds of residential units, e.g., single family dwellings and condominiums, and newly constructed apartment units; these are deemed exempt. Second, it prohibits municipal "vacancy control", also called "strict" rent control."

@ Individual parcels

Thank you, it's good to know the MV rent control itself exempts single home units like townhomes. I'm not a landlord so I have not paid as much attention. However, the article above, second paragraph does mention C.H. in relation to single family homes and condos so that is where I got that idea. But I will do more research then on my own.

@whatever, you say you've been a renter for 25 years because you "chose to be one". Your statement implies that you could have purchased had your u wanted but you "chose" to rent.

I'm curious, why did you choose to be a renter"?

If we needed Prop 13 so that Grandma wouldn't be taxed out of her home, then we need rent control so rent increases won't push her out of her apartment.

@PSR I can tell you that the amount I owe Santa Clara County has gone up slightly more than 2% per annum over the past 5 years. The fees and special bonds that are levied on my property are not capped.

I’m not sure why you have disdain for the profit motive in housing, but that is pretty fundamental to a properly operating market including new development.

@YIMBY that is a false equivalence. Prop 13 protected people from excessive government taxing power. Rent control is basically stealing the economic incentive from landlords which long term has a harsh social cost.

I laid it out pretty clearly: no one should be getting rich just by owning property and renting it out. This libertarian nonsense you're spouting doesn't really convince anyone. Tell the people seeing the fruits of their labor siphoned off by a wealthy landowning class that their suffering is "fundamental to a properly operating market." For ideologues like you, the free market cannot fail, it can only be failed.

@PSR I am not a free market libertarian. I actually made enough to buy a house in Mountain View because I bought stocks when markets crashed. I have long believed markets are inefficient and all markets are self destructive. They always over reach and cannot stop themselves (John Mack the former CEO of Morgan Stanley said something similar though not as extreme).

I disdain rent control because it restrains economic incentive, but I don’t think it ends well for landlords if people build and build and build. Manhattan is facing some of that pain currently. If you want the “wealthy landowning” class to have to moderate their appetite, then rent control is the complete opposite of what you should want... in my view.

We shouldn't want them to "moderate their appetites," we should remove their appetites entirely. There should be no profit in being a landlord. Being a landlord provides no real value other than exploiting the power granted by the government to have exclusive use of the property.

In response to Bored M you said:

“@PSR I am not a free market libertarian. I actually made enough to buy a house in Mountain View because I bought stocks when markets crashed. I have long believed markets are inefficient and all markets are self destructive. They always over reach and cannot stop themselves (John Mack the former CEO of Morgan Stanley said something similar though not as extreme).”

In so many ways I have to agree with you. But remember that the 2007-2009 mortgage crisis was a demonstration that systemic inflation of a product or service. That was based on the markets methods of basing compensation is on the price and not the quality. So the sellers in effect “rigged” the market so they could walk away with commissions but not bear the cost of the problem they created. You said:

“I disdain rent control because it restrains economic incentive, but I don’t think it ends well for landlords if people build and build and build. Manhattan is facing some of that pain currently. If you want the “wealthy landowning” class to have to moderate their appetite, then rent control is the complete opposite of what you should want... in my view.”

The fact is that this “market” has been practicing the same pattern as was described above. The market has been “inefficient” in correcting for inflated values for more than 20 years due to the laws like “Costa Hawkins”. On top of that, the fact that this law in effect legalized an anti-competitive market has allowed for many “businesses” to survive where if the market was efficient, these ones would have failed.

The guidelines are that about a 2% ROI is considered a good investment based on this article (Web Link . Thus it would mean that the best possible outcome should be at best 5%. But that requires that the investment is managed efficiently, not just that any laws provide “protection” to the investor.

The fact is that in many cases the investors in California regarding apartments on the average expected a much higher ROI than 5%. That was only possible under the Costa Hawkins” law. Most areas nationwide simply cannot achieve that. That is why the 2% rule establishes a good return on investment as a model. If that is a fair return on investment, than expecting >5% is NOT a fair return, it is a GENEROUS return.

Given that for example in Mountain View the adjustment was set at 3.4% and 3.6% which is significantly higher than the 2% stated above, the City is being very GENEROUS regarding the adjustment. It simply must be that if a apartment cannot make it with that rate increase, there should be significant questions on whether the business simply doesn’t function. That is what the petition process works on. And so far the landlords have demonstrated significantly poor decision making I know of the Del Medio petition that resulted in only a $6.00 increase in rent that was required to be spread out on all units of that building.

What we have here is that investors are sold investments where the promised ROI was simply too high based in the inflated market situation we have in California. “Costa Hawkins” was the basis of this situation. The industry will move on after “Costa Hawkins” is repealed. But it will undergo a significant reform and market correction.

If Costa Hawkins is repealed and rent control expands to all housing in Mountain View, limiting all rental increases to the cost of inflation, even between changing tenants, you will see all residential construction come to a screeching halt!

Any residential units that are under construction will halt and probably never be finished. Developers will walk away from these developments because their losses will be greater if they finish them. They will never rent or sell for what was needed to turn a profit.

This is what Businessman really meant when he said, "The industry will move on after “Costa Hawkins” is repealed. But it will undergo a significant reform and market correction."

I think it is funny how the California Democratic Party is in such a disarray and stands for nothing anymore other than "GET TRUMP" that it has to base its platform on rent control in California. Why don't they go back to health care and a chicken in every pot?

Howard, this is exactly why I've been saying we can't rely on profit-seeking entities to house us. We should be doing this together as a community, and not just lining the pockets of the rich.

A chicken in every pot, health care, and a roof over everyone's head (not just the rich). Sounds like a winning message to me. Rather than the party of Trump that wants everything to trickle down...

In response to Howard you said:

“If Costa Hawkins is repealed and rent control expands to all housing in Mountain View, limiting all rental increases to the cost of inflation, even between changing tenants, you will see all residential construction come to a screeching halt!”

And like it hasn’t already? There is no sign that the “Free Market” will ever supply enough housing given that the deficit ranges from 1.5 to 4 million units in California. So your “threat” is simply already happened. “Costa Hawkins” was passed to encourage building, it simply did not happen. So this “threat” is simply worse than empty, because the industry has been abusing he market. You said:

“Any residential units that are under construction will halt and probably never be finished. Developers will walk away from these developments because their losses will be greater if they finish them. They will never rent or sell for what was needed to turn a profit.”

Simply you are wrong, they will earn a profit, just not the level the “investors” demand (i.e. >2% ROU). I already demonstrated that is considered in the market a “good” ROI. So why are the investors extorting the public to force higher ROI? You said:

“This is what Businessman really meant when he said, "The industry will move on after “Costa Hawkins” is repealed. But it will undergo a significant reform and market correction."”

I said what I said, you cannot extrapolate any more than the words I used. You cannot claim anything other than the words used in the statement. Please do not attempt to put words into my mouth. I simply do not agree with your interpretation of my statement. You said:

“I think it is funny how the California Democratic Party is in such a disarray and stands for nothing anymore other than "GET TRUMP" that it has to base its platform on rent control in California. Why don't they go back to health care and a chicken in every pot?”

Actually, the Cal Dem Party is standing for removing laws that unconstitutionally separate apartments, single family rentals, duplexes, triplexes and condominiums from equal enforcement of market regulations. All of these consumers should be treated equally, and removal of the “Costa Hawkins” law will restore that equal rights.

The real issue is that the law was designed to divide the voters to prevent all customers from getting fair treatment in the rental market in California. And people like yourself know that when this happens, the market will “reform” and still be making plenty of profit even if it is as low as a 2% ROI.

What a funny communist ideas.
"landlord provides no real value other than exploiting"
"lining the pockets of the rich"
"housing should not be a business"
I think you've mistaken California for a North Korea

Typical of people without an argument to just name-call. This comments section is full of people threatening to pull out of the rental market, predicting that no new housing will be built, all because their profits will be capped. Why should we accept housing in our city being held hostage by rich landowners?

In response to @@psr you said:

“What a funny communist ideas.”

What ones did I say? I just point out that there are 2 kinds of market regulations, those established by markets that are “voluntary” and those that are “not-voluntary”. The “free-market” in the U.S. is a combination of the both. “voluntary” regulations involve “competition-based” issues. But where “competition-based” issues are not addressed by “voluntary” regulations, the market will be issued “non-competition-based” issues. Like safety, quality, anti-competitive business practices. This is where we are today. You said:

"landlord provides no real value other than exploiting"

I did not say that specifically. But what I do say is that the research I brought up indicates that a 2% ROI is established as a good ROI. That just so happens to be in line with inflation. So one could make the argument that landlords are not that valuable to deserve a larger ROI. The fact is that it is one of the least skillful professions in the wide market. Compare it to Doctors, Engineers, Scientists, etc. They are clearly not in the “peers” of these groups are they? You said:

"lining the pockets of the rich"
It is simply the fact that the cost of entry in this market is very high. It would typically require one with significant financial resources to play the part of a landlord, investor, real estate, or developer to be a part of this market. So there can be an association where those with wealth take advantage of markets where they can inflate the values. It is like what is happening in the stock market. The prices of stocks are being stablilized by the corporations buying their own stock with the tax cuts recently passed. Just an observation, you said:

"housing should not be a business"

I never said that. I only observed that the investment industry clearly says that a 2% ROI is considered a GOOD ROI, a GOOD ROI is better than a “FAIR RATE OF RETURN”. So, if the market in Mountain View is allowed a 3.4 or 3.6% adjustment, it is greater than a GOOD ROI. That’s all. You said:

“I think you've mistaken California for a North Korea”

This simply is a hyperbolic statement, and is not comparable to what is happening in Mountain View or California

I am reading all these posts with confusion and amazement. One poster says providing housing should not be a business? What should it be? I cannot imagine anyone would rent out their home or apartment, planning to LOSE money. If housing should not be a business, what is the incentive for someone to put forth the funds for the necessary housing to be built? Are you willing, as a resident, to be taxed the amount it would take to build housing in this city? Do you have the slightest idea how much that would cost you? I hope you have a few hundred thousand sitting around for your share of the bill, so others can have a place to live.

If you have an explanation that makes sense, please tell me. Saying housing providers shouldn't make a profit is similar to Safeway should give food away ... I should be given a car because I want one... I really like nice shoes, so Nordstroms should give me some and not make money off of it. I need food and clothing, as well as housing - so how does your plan work??

I agree there is often tremendous greed in any business - but a great deal of the small business owners (owning and renting out condos, etc. to support their retirement, etc.) are usually more than fair. This is a much more complicated subject than simply saying housing should not be a business. What should it be? A charity? Who will fund this?

No need to be so defensive. Quotes are from @psr posts.

Housing should be a public service. This isn't particularly complicated; it can be funded through taxes, bonds, and cross-subsidies on rents above marginal cost per unit. There's no reason profit needs to enter into the picture at all.

PSR,

You just defined socialism. Is this what you want?

The California democratic party stands for Illegal immigration and rent control.
This is there platform for the 2020 election.

The Democrats Party is in a free fall into the abyss of political disaster because it stands for nothing the American voters want.

The Republican Party isn't much better because they are afraid to join Trump and the voter base this President has energized into the voting booth.

Get on board people, your train is leaving and if you want to be part of this movement, you better start acting like Americans and join Capitalism.

Middle America is on the train!! and they vote so forget your sanctuary cities, rent control, illegal immigration and socialist ideas.

Wow, dude!

Seriously -- stop watching Fox "News." Your brain (not to mention your sanity) will thank you for it later.

(Unless, of course, you're actually a Russian troll...)

He's just another landlord who made himself rich on the backs of the labor of real workers. We should all expect more of that type of reaction when the people reassert themselves against the wealthy. That all he can muster are scare tactics and name-calling shows just how frightened he is.

PSR,

I want you to join me in wealth.

California is the 6th wealthiest country in the world.

The bay area and especially silicon valley is the 20th wealthiest country in the world equal to Switzerland! Why don't you act like it.

You are living in vacuum believing you are poor and need socialism when all you need to do is stand up and take control of your lives and you can have much wealth

Do you believe someone else that has achieved this goal should support you?
Are you from Eastern Europe?.

You live in the region of absolute freedom to become the best you can be yet you resort to the taking of someone else's wealth. Grow up and take control of your own good fortune rather than sucking of the backs of others.

See, Howard has no argument. He has no vision or moral compass except for getting rich. All of this after demonstrating why we shouldn't allow profit-seeking entities to hold us hostage and then name-calling and fear-mongering. How desperat, scared, and weak he's showing himself to be.

So your issues are with wealth even when invited to join in?
Do you want all of us to be poor?

You are truly a socialist on display for this forum to embrace.
I invite you to explain what it is for America that you want.
So, PSR, what do you want for America?

Are you really this scared, Howard? Your lack of an actual argument is revealing. For housing, we should have a roof over everyone's head, and no one should get rich simply because they own land and rent it out.

The Business Man:
"Actually, the Cal Dem Party is standing for removing laws that unconstitutionally separate apartments, single family rentals, duplexes, triplexes and condominiums from equal enforcement of market regulations. All of these consumers should be treated equally, and removal of the “Costa Hawkins” law will restore that equal rights."

Why is differential treatment unconstitutional in your example? Is it based on gender, race, age or some other protected class?

The reality is that this proposition has NO chance of passing. I have no idea why the California Democratic Party would string this albatross around their neck unless they are trying to snatch defeat from the jaws of victory. They might as well attempt a repeal of Prop. 13, and see how quickly the state can turn red.

Targeting homeowners is a dangerous political game, and can shorten a political career quite quickly. These must be the same group that decided to endorse the losing De Leon over Feinstein. Unbelievable that Trump was right. The California Democratic Party is finally tired of winning.

In response to Howard you said:

“So your issues are with wealth even when invited to join in?”

NO, my issue is where wealth is used to manipulate markets, and in effect dictate all conditions regarding a market. Which “Costa Hawkins” was designed to do. You said:

“Do you want all of us to be poor?”

NO, I want the proper balance regarding customer and supplier to be restored. You can make plenty of profit if you can compete regarding a fair marketplace. But as of now, it simply is not designed that way, and you know it. You said:

“You are truly a socialist on display for this forum to embrace.”

NO, I am a true-market proponent. This market has been controlled to the detriment of the public for more than 20 years under the “promise” that the industry would provide affordable housing. You know it never intended to fulfill that promise. “Costa Hawkins was a very good deception put on Sacramento that the industry would “play nice”. But the industry does NOT “play nice”. Remember the kindergarten rules, if you can’t “play nice” you can’t play at all. You said:

“I invite you to explain what it is for America that you want.”

I already explained that the industry assesses that a 2% ROI in apartment investment is a good one. (Web Link Please state what your requirement is regarding a ROI percentage? That way the public can do research as to understand if it is reasonable or not. If you refuse to do so, the public can only assume you just want to take advantage of anyone to the maximum you can.

In response to Vlad you said:L

“Why is differential treatment unconstitutional in your example? Is it based on gender, race, age or some other protected class?”

In this case all of the above as long as they are living in apartments younger that 1995 and the exempted rental units under “Costa Hawkins” because they are not given the same protection as the others that live in the older units not exempted by Costa Hawkins. You know that. The only constitutional resolution is to protect all renters in the state of California equally. And since the laws providing rent control were voted in by intiatives, the State of California must assume that those laws are constitutional under stare decisis. And legislation is given lesser weight in a constitutional assessment. Again you know this. You said:

“The reality is that this proposition has NO chance of passing. I have no idea why the California Democratic Party would string this albatross around their neck unless they are trying to snatch defeat from the jaws of victory. They might as well attempt a repeal of Prop. 13, and see how quickly the state can turn red.”

Prop. 13 is not involved or in question. Why bring up something not related to the “Costa Hawkins” repeal proposition. Please provide some scientific study to prove your opinion. And do not bring up the Orange County Business Council (Web Link because it even states it is nowhere accurate. As I cut and paste the relavant part:

“The Orange County Business Council survey, through its non-profit Center for a New California, was conducted June 15-17, 2018 among 300 randomly selected voters in Orange County, CA. Respondents had to have participated in at least one of the four primary or general elections since June 2014 (96% of respondents) or have been registered to vote since November of 2016 (4% of respondents). The margin of error is +/- 5.7% at the .95 confidence level. All percentages are rounded to the nearest whole percent. “

The error can be as wide as 11.4% on results that are:

“Survey respondents were asked: “If there was a potential statewide proposition to expand local governments’ authority to enact rent control on single-family homes and apartments, then would you vote YES, in favor of, or NO, against such a measure?" 42% percent of the respondents indicated they would vote against such a measure, while 39% said they would vote to approve the measure.”

An error of as much as 11.4% on the 42% vote no is an error rate of (11.4/42) or 27% admitted inaccuscy, and 39% vote yes is an error rate of (11.4/39) or 29% admitted inaccuracy.

And that the other stories including:

Web Link

States 59% of Orange County Voters want more rent control And:

Web Link

Came to the conclusion that 60% of California voters are in favor of rent control.

The Orange County study was performed by an organization that states:

“Orange County Business Council is the leading voice of business in Orange County, California. OCBC represents and promotes the business community, working with government and academia, to enhance Orange County’s economic development and prosperity in order to preserve a high quality of life. OCBC serves member and investor businesses with nearly 250,000 employees and 2,000,000 worldwide. In providing a proactive forum for business and supporting organizations, OCBC helps assure the financial growth of America’s sixth largest county. For more information, visit www.ocbc.org. Center for a New California, 501(c)3, is dedicated to research, education and community impact of infrastructure, including housing.”

Thus it has a conflict of interest in the study that it does not declare. You finally said:

“Targeting homeowners is a dangerous political game, and can shorten a political career quite quickly. These must be the same group that decided to endorse the losing De Leon over Feinstein. Unbelievable that Trump was right. The California Democratic Party is finally tired of winning.”

NO, there is NO targeting Homeowners. Homeowners do not pay rent. They pay Mortgages. Unless you are describing that some Homeowners buy Houses to Rent out. That is not a residence if it is not occupied by the Homeowner, it is a business. I already pointed out that in that situation a 2% ROI on that investment has been declared a good one. So it seems that if a Homeowner in that situation runs a side business, it seems perfectly fine that that business should only net the same as an apartment. Nice try to conflate that a home being rented out to another occupant is not really a home. That is a rental unit under the law. Simply put. Don’t ever try to claim that a Homeowner is the same as a Home Rental Business. And No we do not want to touch Prop. 13 ever. Leave it alone.

"I already explained that the industry assesses that a 2% ROI in apartment investment is a good one". Web Link
Do you read your links or you are a writer, not a reader?
Here is the quote from your link: "for a rental property investment to be “good”, the monthly rent should be equal to or higher than 2% of the purchase price. For a $100,000 property, the monthly rent collected needs to be $2,000/month"
FYI with this rule and median home price above $1M the average rent should be $20000/month. Keep talking.

> You just defined socialism. Is this what you want?

YES!

Because socialism means that we do as Jesus asked: "care for the least of your brothers"

Socialism is Christian.
Socialism is Hinduism.
Socialism is Buddist.
Socialism is love for others.
Socialism is humanity at it's best

As I asked but no one bothers to answer:

What is the ROI you are expecting to earn based on rent itself?

Realize that that rule takes into account another significant factor. The appreciation of the property.

That article simply demonstrated that if you were to try to do it solely based on rental income it is impossible.

But you know that the property appreciation is a large income to the rental business. And that based on (Web Link web site indicated that since 2000 to 2018 the appreciation of the market annually was an average 4.52%. So, if you have an apartment that is worth $5,000,000 your appreciation annual income should come to $452,000. And say that you are right about the 2% rule than your 2% income requirement would be $5,000,000. At 2% or $200,000. This would mean that just in the appreciation alone you earn $252,000 more than the “rent” income.

Of course you and your landlords never mention that part of the equation. In reality, during that period of time if you had the building since 2000 at the purchase price of $5,000,000. Your investment is worth about $10,645,000.

Just understand that you can protest way too much when it comes to your opinion when it comes to the actual earnings of an apartment, it never is only the rent income. The rent income simply should be adequate to cover operating expenses alone. Because the building appreciation is where the BIG MONEY is.

@The Business Man, I am pretty certain how you're using ROI is incorrect. I will not debate the validity of the rule (though the author says she/he doesn't know where it originated), but the site articulates that the 2% rule means that you should generate 2% in monthly rent when measured against the purchase price. That is in no way a Return on Investment.

A proper return on investment calculation for real estate would be the revenues from rent minus the cost of maintenance, depreciation (for the roof or parking lot or other items), mortgage interest, insurance, property taxes and whatever else I'm missing. Adding to that would be whatever the increase in the property value over the purchase adjusted for the time value of money. That final figure over the amount principle paid + down payment is the ROI, but not net cash which is very important to most real estate investors. Additionally, as the amount of equity increases, the ROE actually declines over time as a percentage.

I'm not a real estate investor, though.

Businessman,

Since your deciding what a proper return should be..would you buy a house in Los Altos for 3 million and rent it to me for $2,000/month and lock me into a 3% annual increase where I decide when I will move..10 years, 20 years, 30 years or you can buy me out for $40,000. I'm ready.
Oh and the socialists are reading our posts by the way..be careful.

I think that is what's right.

To @howard, that angle will be no use on Howard. He doesn't believe in anything greater than getting rich.

As a deplorable Trump supporter(I think that's what Hillary called us?) I would like to say that the greater part of the country thinks much differently than the people on this forum. I just thought we should include that into the equation of insanity.

Socialists and liberals are running amuck, freely in our society. where are all the guys in white suits with big nets? .. Where is Senator Mccarthy when we really need him?

@Howard

I assume you are saying “the greater part of the country thinks much differently” as in the people that voted for Trump. If so, that is true on the electoral side. He overwhelmingly won states that are takers from the Federal coffers with Texas being a notable exception. Welfare states, they should be called.

Trump was soundly defeated in the popular vote, though. That would be a significant measure of “greater“.

In response to Howard you said:

“Since your deciding what a proper return should be..would you buy a house in Los Altos for 3 million and rent it to me for $2,000/month and lock me into a 3% annual increase where I decide when I will move..10 years, 20 years, 30 years or you can buy me out for $40,000. I'm ready.”

Again, the true market always allows for the consumer to dictate your earnings as a property owner (demand/supply equilibrium). You already know this. Either by “voluntary” or “Non-voluntary” market regulations.

Again, the CSFRA allows for you to take the units off the market, and even when ‘Costa Hawkins” goes bye bye, you are allowed to do so. But it may mean you will need to provide a “Tenant Relocation Assistance Package. No one forces you to be a renter of property. You choose to do so. You can always divest and go into another market if you wish.

Of course, it depends on whether you have the skills and abilities to enter into what can be even a more complicated industry. The business of being a landlord is such a complicated business, like information technology, accounting, rocket science, etc.

The public really appreciates how complicated your business is.

Business man,

You are correct that the market dictates the earnings. That's why I pulled out of Mountain View last year with no regrets and am actually very happy I did with this Costa Hawkins issue before the voters. I'm a true investor that expects a 8% - 20% return factoring in appreciation and depending on the overall market. If I can make 20% in San Ramon or Oakland and I have this last 5 years, then I invest there and move money out of places like Mountain View that caps my profits.

If that repeal passes and Mountain View enforces the full extent of rent control on the remaining landlords, you will see the market in action. No investor will remain to do business under those conditions. No developer could build for profit under those conditions and the market will correct in ways that won't favor the tenants.

If you have an apartment under rent control, you better stay put (that's assuming that your landlord continues to stay there) because there will be a diminishing inventory in Mountain View for youto rent.

The other cities that see what the voters did to Mountain View will learn a lesson when they see what happens to Mountain View and will never let rent control in their city.
So, your right. The market dictates the ROI. Congratulations!

Thank you, Howard, for clearly stating that. This is a thorough explanation of why we cannot rely on profit-seeking entities to house our community. Once they see greener pastures, they'll up-and-leave, leaving our community holding the bag. Unless we take responsibility for housing our community ourselves, this will always be the danger. Why should we accept housing in our city being held hostage by rich landowners?

PSR,
I agree with you if you don't like rental increases of 8-10%/year.
This why you need to come up with a down payment of about $200k and make payments of about $4500/month on a little condo.

In response to Howard you said:

“Business man,

You are correct that the market dictates the earnings. That's why I pulled out of Mountain View last year with no regrets and am actually very happy I did with this Costa Hawkins issue before the voters. I'm a true investor that expects a 8% - 20% return factoring in appreciation and depending on the overall market. If I can make 20% in San Ramon or Oakland and I have this last 5 years, then I invest there and move money out of places like Mountain View that caps my profits.”

But if you look at this information found here (Web Link you will find that that may simply be unreasonable because:

“Benchmark ROI

The higher the cap rate, the better the return on investment. Residential cap rates generally fall within 4 to 10 percent. In 2017, the average cap rate in San Francisco hovered near 5.1%. However, property values are local, so a cap rate that is considered desirable in one city or neighborhood may be unfavorable in another. The trick is to measure like against like. This means determining the median cap rate for comparable properties in the vicinity, and comparing the target property against the median. This is particularly important in cities like San Francisco, where rent control curbs potential rents.

And:

(Web Link the discussion stated:

“Hello,

Between my husband and myself we own multiple properties throughout the valley and manage quite a few as well. This is true for both residential and commercial.

Right now we are seeing returns on SFR properties within the 89123 postal code at about 4.5 % to 6% net. A blue chip area. Gross they are at about 7.5% to 8% gross. So you loose a few points after management fees, taxes, insurance, vacancy calculations repairs etc. “

Take that same house and put it in North Las Vegas and we see ROI at 6%to 8% net. Not so much a blue chip stock anymore. My experience is eviction rates are higher, vacancy rates increase, tenant life expectancy within the property half of that of southern Las Vegas. Gross return ranges from 8% to 11% gross.

With regards to multi family properties. The ROI is significantly higher. You are looking at an average of 9% to 11% net ROI with a gross of 9.5% to 14% gross. Obviously turn rates are higher, vacancy rates are higher etc. A higher risk investment brings a higher return.”

Now that is in Las Vegas, one of the hottest residential markets in the Country. So your expectation you described as 8-20% seems to be very unrealistic. The only way one could get say above 12% net under this situation would be cheating of some kind. Most likely manipulation of the supply so that it is chronically and systemically under resourced. Which occurred under “Costa Hawkins” even though it was passed under the argument that it would incentivize new building. That simply did not happen. As far as:

“If that repeal passes and Mountain View enforces the full extent of rent control on the remaining landlords, you will see the market in action. No investor will remain to do business under those conditions. No developer could build for profit under those conditions and the market will correct in ways that won't favor the tenants.”

Simply put, that is the reality we live in today, it doesn’t make any difference regarding the repeal of “costa Hawkins” and increased rent control. The fact is that the private sector made a promise to solve the problem upon passage of “Costa Hawkins” and then simply said “We want more, give it to us or we won’t build”

And the public could not meet those unrealistic expectations. So you simply refused to build anything “affordable” and instead bet on the “luxury” units only. What do you expect to happen under that situation? The fact is that it is realistic that one can see a profit of about 5-8%. And there will be businesses that will accept that, especially when the risk of vacancy is significantly low. Unless the private sector establishes a boycott of some kind, which would open up the possibility of investigation be the State of California.

The Business Man: "NO, there is NO targeting Homeowners."

Yes there is. By Repealing Costa Hawkins, people who currently reside in their own single family homes will be subject to rent control laws if they want to rent out their residence at a later point in time.

"Came to the conclusion that 60% of California voters are in favor of rent control."

The poll asked generally about rent control with no details about the mechanics of how it will be implemented. Homeowners may generally support rent control, but if the question is flipped around to whether the government should limit the rent you chould charge on your single family home, I think the responses will be different.

In response to Vlad you said:

“Yes there is. By Repealing Costa Hawkins, people who currently reside in their own single family homes will be subject to rent control laws if they want to rent out their residence at a later point in time.”

WHEN YOU RENT A SECOND HOME IT IS NOT A HOMEOWNER SITUATION. You know that. IT IS A SIDE BUSINESS. There should be market regulations that apply to ALL RENTAL UNITS in the state of California. RENTERS in SINGLE FAMILY HOMES are not PROPERTY OWNERS, and can be moved out at any time. THUS, THEY DESERVE SOME PROTECTION FROM THOSE WHO SEEK TO MAKE A QUICK BUCK.

A second home is the same as owning an apartment building in the business world. That is clearly obvious. Why are to trying to conflate them in such a manner? They simply do not belong in the same groups.

Maybe residential REITS should be abolished! These are huge publicly traded companies that own and operate apartments and commercial centers, as well as other investments. They exist for to produce income for the shareholders. They receive favorable tax treatment.
I do not pretend to know how it would occur, but if one invests in REITS, commercial and residential, the rate of return is much greater than DOW stocks now.
For examples of dividends, see KRC and DDR (local commercial REITs). They have recently paid more than bank interest and DOW stocks in dividends.

Guys! enough please. None of you has deemed to notice that our "greed-is-good" capitalism drift in our urban era, has become antithetical to our constitutional democracy. It seems so obvious that capitalism as now practiced in this country is a disaster for our hopes for democracy in the future. What we really need is an entirely new, unprecedented economic paradigm. Is that a scary thought? Yes. Does that make it irrelevant? Or impossible? NO!

We are approaching an either/or point in time. If we want to save our democracy, we have to wean ourselves of the corruption capitalism has become. So stop arguing about tidbits and band together to fix the real problem. My proposal is NOT a right or left issue... it's a democracy recapture/survival issue which we all must seek.

Petty self-promoting solutions from any point on the spectrum are too risky and costly. Let's find a way to move beyond them. PLEASE.

@Maher

Sorry if you're another one of those boomers living in a bubble, but the revolution is already well underway and its a VERY left issue.

The unreasonable concentration of Google growth on the Mountain View area causes some of the local conflicts. Greed Is Good sums up Google. As for the revolution already being underway, well, the question is which revolution? Under Trump, the Republicans changed the tax law to favor real estate speculation and REIT's. This means that more profit can be squeezed out of the end users of the property. This is a step backward, and it is on a scale that could be called revolutionary rather than evolutionary.

The whole effect of the tax changes has been a nightmare. It ramped up inflation to the point that the Federal Reserve had to end the economic stimulus of low interest rates. This is going to hurt new housing construction. At the same time, prices will rise even more because of the favorable tax treatment.

It's a bad revolution.

OMG, are you seriously trying to present the Trump tax changes as responsible for the housing issues here? SERIOUSLY?

This bubble has lost its collective mind. H.T.G.

I think there are a lot of constructive comments here that should be looked at.
You guys in the last 4 or 5 posts got it right!

Trumps tax deal favors investors by capping the interest right off on homeowners. I as an investor can buy a $10 million home and right off 100% of the interest and state or property taxes where you can't over $10,000 on property tax alone.
I can do anything and it is a right off where your restricted as a homeowner.

I thought about another business where you rent your neighbor's home and and he rents yours.
Now you can right off everything from the gardener to the plumber on your home and vica versa for your neighbor.
No Tax limits on property taxes.
Homeowners is an expense with 100% right off.
Everything you replace Kitchen, bath flooring roof is a right off.
AND THE BIGGE...DEPRECIATION!!
This is a multi million dollar idea!

Howard continues to deliver the clearest demonstrations. He never even had to learn the difference between "right off" and "write-off."

Maher,
Could you be more specific on your thoughts of saving democracy by doing away with "greed is good" capitalism.
I, for one, would be most interested in your ideas that haven't been tried before and failed miserably.

Hello Howard and mike rose:

At one point of time one said:

"Those who cannot remember the past are condemned to repeat it." -- George Santayana

Lets then look at that, what is an economic bubble?

It is defined as: (Web Link

An economic bubble or asset bubble (sometimes also referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania, or a balloon) is trade in an asset at a price or price range that strongly exceeds the asset's intrinsic value.[1][2][3] It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.[4] Asset bubbles date back as far as the 1600s and are now widely regarded as a recurrent feature of modern economic history.[5] Historically, the Dutch Golden Age's Tulipmania (in the mid-1630s) is often considered the first recorded economic bubble.”

How does this apply now? Because in the housing market in general you have an industry that takes advantage of the following process:

Greater fool theory

Greater fool theory states that bubbles are driven by the behavior of perennially optimistic market participants (the fools) who buy overvalued assets in anticipation of selling it to other speculators (the greater fools) at a much higher price. ACCORDING TO THIS EXPLANATION, THE BUBBLES CONTINUE AS LONG AS THE FOOLS CAN FIND GREATER FOOLS TO PAY UP FOR THE OVERVALUED ASSET. The bubbles will end only when the greater fool becomes the greatest fool who pays the top price for the overvalued asset and can no longer find another buyer to pay for it at a higher price. This theory is popular among laity but has not yet been fully confirmed by empirical research.[8][9]”

This description can apply to my current landlord. At this time he is seeking a “greater fool” because he purchased the property I live in at such a high price that it appears he cannot sustain it himself. The property was taxed at $1.15m, but he bought it for $4.95m. On what scientific or market value research was this price supported other than the appraisers employed by 2 real estate agents? And realize that appraisers are protected from liability of error based on the fact that under the law it is not scientific research, but simply an opinion of the appraiser.

At the same time you have:

“Moral hazard

Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. A person's belief that they are responsible for the consequences of their own actions is an essential aspect of rational behavior. AN INVESTOR MUST BALANCE THE POSSIBILITY OF MAKING A RETURN ON THEIR INVESTMENT WITH THE RISK OF MAKING A LOSS – THE RISK-RETURN RELATIONSHIP. A moral hazard can occur when this relationship is interfered with, often via government policy.

A recent example is the Troubled Asset Relief Program (TARP), signed into law by U.S. President George W. Bush on 3 October 2008 to provide a Government bailout for many financial and non-financial institutions who speculated in high-risk financial instruments during the housing boom condemned by a 2005 story in The Economist titled "The worldwide rise in house prices is the biggest bubble in history".[29] A historical example was intervention by the Dutch Parliament during the great Tulip Mania of 1637.

Other causes of perceived insulation from risk may derive from a given entity's predominance in a market relative to other players, AND NOT FROM STATE INTERVENTION OR MARKET REGULATION. A firm – or several large firms acting in concert (see cartel, oligopoly and collusion) – with very large holdings and capital reserves could instigate a market bubble by investing heavily in a given asset, creating a relative scarcity which drives up that asset's price. Because of the signaling power of the large firm or group of colluding firms, the firm's smaller competitors will follow suit, similarly investing in the asset due to its price gains.”

THAT IS EXACTLY WHAT COSTA HAWKINS WAS DESIGNED TO DO. Also:

“However, in relation to the party instigating the bubble, these smaller competitors are insufficiently leveraged to withstand a similarly rapid decline in the asset’s price. WHEN THE LARGE FIRM, CARTEL OR DE FACTO COLLUSIVE BODY PERCEIVES A MAXIMAL PEAK HAS BEEN REACHED IN THE TRADED ASSET'S PRICE, IT CAN THEN PROCEED TO RAPIDLY SELL OR "DUMP" ITS HOLDINGS OF THIS ASSET ON THE MARKET, PRECIPITATING A PRICE DECLINE THAT FORCES ITS COMPETITORS INTO INSOLVENCY, BANKRUPTCY OR FORECLOSURE.”

WHICH IS THE THREAT BEING MADE BY THOSE WHO ARGUE AGAINST COSTA HAWKIS REPEAL. The industry will collude to punish the customers and the state by using the bubble as extortion.. Also:

“The large firm or cartel – which has intentionally leveraged itself to withstand the price decline it engineered – can then acquire the capital of its failing or devalued competitors at a low price as well as capture a greater market share (e.g., via a merger or acquisition which expands the dominant firm's distribution chain). IF THE BUBBLE-INSTIGATING PARTY IS ITSELF A LENDING INSTITUTION, IT CAN COMBINE ITS KNOWLEDGE OF ITS BORROWERS’ LEVERAGING POSITIONS WITH PUBLICLY AVAILABLE INFORMATION ON THEIR STOCK HOLDINGS, AND STRATEGICALLY SHIELD OR EXPOSE THEM TO DEFAULT.”

Which appears to have happened in this case. A Vertical Market where at every level of the process, the lending institution, the real estate agent, the real estate appraiser, the investor are all working together as a unit to manipulate the cost of living in the state of California.

And you expect the public to pay the price for this process? NO. The public must engage in significant regulation because without it, you will simply support inflated values where the intrinsic value will eventually be discovered and the bubble will burst. The longer you inflate it, the worse it will hurt. Time to make the correction now before it REALLY will be devastating.

Tenants are forced out of their homes just so a landlord whose costs haven't risen can squeeze even more profit out of them. This serves only the landowners, not the community at large. If that's your measure of success, it's clear why you're on the losing side.

Please...ENOUGH from YOU!

You monopolize the blog! … On just about every article!

We get it! (And yes, check your stats please.)

You obviously don't work and are Socialist masquerading as The Business Man.

Yes, that checks out. TBM doesn't work, unlike, let me check my notes here, idle-rich landlords?

In response to @ The Business Man you said:

“Please...ENOUGH from YOU!”

I am not doing anything abusive. I am simply contributing to the conversation. You are also allowed to do the same. You said:

“You monopolize the blog! … On just about every article!”

I do not make any statements to in effect disallow anyone from contributing. To monopolize the conversation, I would have to block others from discussing their point of view. I do not do this, nor am I attempting to do so. You said:

“We get it! (And yes, check your stats please.)”

What “stats”, if your inquiring about the “likes” on the discussion, I have already pointed out how that situation is hackable so that one person can infinitely like any comments they want. You finally said:

“You obviously don't work and are Socialist masquerading as The Business Man.”

The research I provide is not a “socialist” manifesto, it is simply research discussing related information. My information is simply relevant business information. It seems that the content of my research has a serious significance to you. Maybe because you are starting to understand that the public may finally be aware of this “market manipulation”. Can it be that you have been benefiting from this situation? Or could it be that you have invested in such a way that when the “bubble” bursts, you find yourself in a significant risk?

Communism has failed many times over. Sometimes they get into power and look what happens, millions die, economy is in shatters, only thing that can save it is Capitalism. Capitalism is what made America great and strong, not communist ideas, it's the engine that stabilizes the economy and sometimes corrects itself, but it's an engine that has worked for 200+ yrs and if you don't like it, move to a communist country and you will be screaming to come back. The bay area is a peninsula people, not everyone can live here. The companies have moved there lower skilled laborers out of this area for a reason. Now only upper management and essentials live here and yes, their companies can afford the rent and the prices of new homes. Does that offend all the commies on here? Are you upset that there are people out there making 10x more money than you? Do you want to stop that too? Anyone that things that housing should be run by govt, just needs to look at the Chicago high rise slums that were built. People, you need to read up on your history about the failures of socialism/ communism. People need to stand up, Communism stands for only one thing and that is to take away peoples rights. Right now they are working to take away peoples rights to be a landlords, that is totally wrong, anti American. The hell with that, I hope America is strong enough to see through all these fails lies these people say.

@ The Business Man, the post above you has you nailed to who you are and you are NO business man, but the opposite, the anti business man. Do you even have a job? I know you have a govt. job that allows you to do nothing. Just think you could be an idle rich landlord one day. Make a lot of money and invest it, but your to busy trying to find ways you can stop that.

Well looking at my business network..were going to see the first shoe drop here on the increasing valuation of residential property in our state pretty quick.

Sales are slowing, resistance to pricing and increasing interest rates as reported in the business sector have stalled price increases on residential sales.

Fine with me. I'm in escrow on 7 homes in San ramon right now and I don't play by those rules Business man. I am a holding company and make my $$ over time and factor in profit from reinvestment through 1031's without taxation.

Also, everything is relevant and what it's worth is what it's worth to me.

I have always invested in good or bad times and made $$

Business man,

Look at all the wealth around you. California would be the 6th richest country in the world if it were a country.
The bay Area would be the 20th richest in the world next to Switzerland.
This is because were are Capitalists!

If you want to be an anti-capitalist and PSR wants to be a socialist and wanna dictate anti- Capitalist rhetoric to the community have at it but we are justagonna roll right over it. I want strength, power and to live at the best we can.

Simply put:

What I am discussing is not "Anti-Capitalism" The definition of “anti-captialism” is (Web Link :

“Anti-capitalism encompasses a wide variety of movements, ideas and attitudes that oppose capitalism. Anti-capitalists, IN THE STRICT SENSE OF THE WORD, ARE THOSE WHO WISH TO REPLACE CAPITALISM WITH A MONEYLESS SOCIETY, OR WITH ANOTHER TYPE OF ECONOMIC SYSTEM. Whether it's a political change and/or a tangible change/eradication of medium exchange.”

Have I promoted that we should have a “moneyless society? Did I promote a different economic system?

NO I HAVE NOT.

You can try to personally attack anyone you oppose. But you simply need to do a better job at providing an effective counter argument other than someone is trying to engage in socialism.

You know that the market in the U.S. works like this (Web Link

Is the United States a Market Economy or a Mixed Economy?

By Sean Ross

A: The United States has a mixed economy. It works according to an economic system that features characteristics of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to intervene in economic activities in order to achieve social aims and for the public good.

The government of the U.S. has always played some role in the economic affairs of the nation. Over the course of its history, many services began to come under the influence or direct control of the public sector. During some periods in U.S. history, however, it was closer to a true free market economy, in which the private sector, or individuals, is unfettered in its economic behavior, actions, and decisions.

A "true" or "absolute" free market economy requires that all property be owned by private individuals and all goods and services be privately provided. Prices are allowed to fluctuate based on supply and demand, and all transactions are voluntary, not compelled or restricted by the government. This system is also referred to as "pure capitalism" or "laissez-faire capitalism."

Also:

Elements of a Mixed Economy

The U.S. government controls or partially controls many goods or services, such as education, courts, roads, hospital care, and postal delivery. It also provides subsidies to agricultural producers, oil companies, financial companies, and utility firms. For example, private individuals cannot legally provide or purchase certain types of goods, such as cocaine, haggis, raw milk, and most types of flavored cigarettes. Other products face heavy taxation to discourage their use.

In the U.S., private businesses need to register with government agencies, and many types of professionals can only operate with government-approved licenses, including funeral attendants, auctioneers, private investigators, makeup artists, hair stylists, real estate agents, and financial advisers.”

Has anything I have said contradicted this information? I do not think so.

What is happening is I am discussing factors you do not want to be discussed.

@psr,
You said:" Tenants are forced out of their homes just so a landlord whose costs haven't risen can squeeze even more profit out of them. This serves only the landowners, not the community at large. If that's your measure of success, it's clear why you're on the losing side"

These are LANDLORD'S homes, not tenant's. Maybe this is a novel idea for you @psr but in your excitement to steal you even encompass TBM who admits that these homes belong to landlords, and tenants are nothing more but temporary occupants.

The fact that someone's costs have not increased (which BTW is untrue) is totally irrelevant.
In capitalist system which is the ONLY one that works, both work and RISK are rewarded by free market.
This is true for property owners ( including homeowners),
But also for stockholders and even for employees who oftentimes change jobs without putting more work for much higher salary.
In your utopian word this would be prohibited.
The good news for you is that you can still enjoy your dream system by moving to Venezuela, Cuba or North Korea.
Good Luck!!!

Someone's home is the place they live. Do you consider all tenants homeless? No one else does. That you're so blinded by greed as to not recognize that, and not recognize the immorality of forcing someone onto the street, speaks volumes. It's why we cannot rely on profit-seeking entities to house our community. You don't even understand that these are tenant's homes!

Please let me clarify a few things.

I have to agree with mike rose in stating that a tenant does not “own” the home they are renting. To attempt to say otherwise is not wise.

However, a tenant can be given specific rights to the property by being a renter. That is also true.

But a tenant simply cannot be the “homeowner” if they are renting the home.

They clearly though are not defined as “homeless”. It is defined as:

What is the official definition of homelessness?
There is more than one “official” definition of homelessness. Health centers funded by the U.S. Department of Health and Human Services (HHS) use the following:

A homeless individual is defined in section 330(h)(5)(A) as “an individual who lacks housing (without regard to whether the individual is a member of a family), including an individual whose primary residence during the night is a supervised public or private facility (e.g., shelters) that provides temporary living accommodations, and an individual who is a resident in transitional housing.” A homeless person is an individual without permanent housing who may live on the streets; stay in a shelter, mission, single room occupancy facilities, abandoned building or vehicle; or in any other unstable or non-permanent situation. [Section 330 of the Public Health Service Act (42 U.S.C., 254b)]”

However, that does not mean that “rent agreements” should not be entitled to the same consideration as an older apartment regarding rent control. This is where I disagree with mike rose.

But I cannot argue with mike rose regarding the "ownership" of the home.

I never said they own the house, I said they're being kicked out of their home. That's indisputable.

@psr and TBM,
You notoriously quote definition of words from Wikipedia.
Let me quote the word "renting" from the same source:

"Renting, also known as hiring or letting, is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership."

Please pay attention to the key word TEMPORARY.

This is how "normal" world understands renting. Except left wing radicals of course.

Are they homeless? If so, you don't think it's their home, but no one agrees with you. If not, they are getting thrown out of their home. It's really quite simple if you're not blinded by greed.

psr,

Don't you think homelessness is a social problem and should be addressed by our Government?

I don't get liberals and most of the wackies here on the left coast that think homelessness is a landlord problem.

Is Mcdonalds responsible for hunger?

Is walmart responsible for someone not having clothing?

Shelter, food and clothing are all needs.

Can someone explain why landlords are responsible when our Government has plenty of money to build 10's of thousands of condos for homeless people and wackos believe it is the landlords job..

The bottom line is really IQ. Many Californians who graduate from high school graduate with only an 8th grade equivalency (demographics). In the senior year economics is a required course with usually different texts for the college bound and the future proletariat. The top one third of the population remembers IQ. that rent control is a force of destruction in the production of housing or any other item for that matter (price controls). Mountain View is ground zero for the brutal end of rent control. It's all up on the internet: rent control the most studied subject in economics (if you can remember).
George Drysdale social studies teacher developing the lesson plan

Howard, that's exactly what I've been saying! We cannot rely on profit-seekers for our housing needs, and we must not allow ourselves to be held hostage by people only seeking to enrich themselves. As they've demonstrated here over and over again, landlords only care about themselves and their bottom line, not the good of our city.

In response to Howard you said:

“Don't you think homelessness is a social problem and should be addressed by our Government?”

YES, and the method will be market regulations. You said:

“I don't get liberals and most of the wackies here on the left coast that think homelessness is a landlord problem.”

When the landlords promised they would solve the affordable housing problem when lobbying for “Costa Hawkins”, they took that responsibility. Simply put. You said:

“Can someone explain why landlords are responsible when our Government has plenty of money to build 10's of thousands of condos for homeless people and wackos believe it is the landlords job.”

If the landlords had not made false promises in the first place, “Costa Hawkins” would not be being repealed. You have to understand that. Why is it when it comes to taking responsibility for the promises of the past, landlords say, “it wasn’t my responsibility that was someone else”. The fact was this was a paid for legislation by the private housing industry sold by conning the state government that it had the expertise and ability to sold the problem as long as infinite profits would be protected. How did that work out?

As the famous song goes “We won’t be fooled again”

OR the other saying:

“Fool my once shame on you, Fool me twice shame on me”

You are not going to get away with it anymore.

Well, I think your all gonna get your wishes as far as rent control because the state of California seems to be going from Blue to Red. That's not Republican Red it's Commie Red.

As a Businessman I have to learn how to adapt under socialism and will.

Let's see...in communist societies there is the government protected by its army and then there is the Black Market which half the government is in on receiving payoffs for looking the other way.
Then you have the people that see no reason to get ahead so they do as little for a loaf of bread, a pound of hamburger and 2 cups of rice everyday after waiting in line for 3 hours.

I think I'll move to gun toutin Nevada where there's no state taxes and I can eat like a King!

In response to Howard you said:

“Well, I think your all gonna get your wishes as far as rent control because the state of California seems to be going from Blue to Red. That's not Republican Red it's Commie Red.”

Why won’t you address your responsibility for the “Costa Hawkins” fiasco, instead you try to distract and enrage you said:

“As a Businessman I have to learn how to adapt under socialism and will.”

Again when will you address the responsibility of the “Costa Hawkins” fiasco? Your peers sold the state the idea that you are the only solution to the housing problem as long as “Costa Hawkins” was passed. Did you solve the problem? You said:

“Let's see...in communist societies there is the government protected by its army and then there is the Black Market which half the government is in on receiving payoffs for looking the other way. “

And like in capitalism there isn’t a black market? In reality those are larger in capitalist markets. But you still haven’t answered the question: “when will you address the responsibility of the “Costa Hawkins” fiasco?”

I won’t even mention the rest, you get the idea.

@psr,
You said: "Are they homeless? If so, you don't think it's their home, but no one agrees with you. If not, they are getting thrown out of their home. It's really quite simple if you're not blinded by greed."

Tenants are homeless and "displaced" to begin with,
before they start renting, before they even encounter the"greedy landlord".
This is why they seek shelter.
The reason they are homeless vary due to their particular circumstances (I.e. Graduating from college, moving away from family, starting new job in another city)
Then they enter into voluntary agreement with a property owner to provide TEMPORARY shelter.
It is NOT a duty of private property owner to provide a permanent housing indefinitely for a price dictated by a tenant.
So to blame the landlord for homelessness and displacement of a tenant is ridiculous at best.

TBM,
I don't consider CH fiasco. Fiasco would be the repeal of CH.
I would go further and state that it would be a disaster for California economy.
There is no question in my mind that the repeal would FREEZE new apartment construction as proven in Berkeley prior to CH existence.
It will also cause all Single family rentals to disappear from the rental market (these would be Ellis Acted and sold to owner occupants).
In short the repeal would dramatically reduce the number of available rental units.
The businesses all over the state would not be able to expand or retain work force due to the new housing freeze and disappearance of existing units which would in turn lead to the slowing or reversing of economic growth for the whole State.
The good news is your rent will be artificially cheap

In response to mike rose you said:

“Tenants are homeless and "displaced" to begin with, before they start renting, before they even encounter the"greedy landlord". This is why they seek shelter.”

That is technically true, but the way you describe it is you assume they are “undesirable” clients from the very beginning. That is not a good place to start. It almost appears you are trying to start an adversarial relationship from the beginning. You said:

“The reason they are homeless vary due to their particular circumstances (I.e. Graduating from college, moving away from family, starting new job in another city) Then they enter into voluntary agreement with a property owner to provide TEMPORARY shelter.”

That again is technically true. However you went on to say:

“It is NOT a duty of private property owner to provide a permanent housing indefinitely for a price dictated by a tenant.”

That is technically NOT correct. Unless you assume that you REQUIRE that a tenant will only stay for a limited period of time. But as you know, it is not realistic that those seeking a residence MUST buy a home. It simply is noty realistic at all. Given that the cost of home ownership entry is currently significantly high, and that the market of housing is significantly diverse. You went on to say:

“So to blame the landlord for homelessness and displacement of a tenant is ridiculous at best.”

Not necessarily, if you haven’t heard the term “constructive eviction” which is defined as (Web Link :

Constructive Eviction

Occurs when a landlord does not physically or legally evict a tenant, BUT TAKES ACTIONS THAT INTERFERE WITH THE TENANT'S USE AND ENJOYMENT OF THE PREMISES SIGNIFICANTLY. Constructive eviction can occur as a result of the landlord's breach of the implied covenant of quiet enjoyment if (1) the landlord substantially interferes with the tenant's use and enjoyment of the premises by his actions or failure to act to resolve a problem; (2) the tenant gives the landlord notice of the problem and the landlord fails to respond and resolve the problem; and (3) the tenant vacates the premises in a reasonable amount of time after the landlord fails to resolve the problem.”

So can a landlord be responsible for homelessness? Under this definition, YES. In fact there is a significant history in California regarding “constructive eviction” as a problem found here:

Web Link

And:

Web Link

So, if you’re going to argue that landlords cannot be held responsible for homelessness, you better do better homework. It would appear that if this was not a sufficient problem, the laws would not in effect recognize this as requiring a public policy to prevent abuse by landlords. And as you can see, many landlords wind up in serious trouble when they get caught.

mike rose, I remind you of the problem you simply want to keep getting worse::

Lets then look at that, what is an economic bubble?

It is defined as: (Web Link

An economic bubble or asset bubble (sometimes also referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania, or a balloon) is trade in an asset at a price or price range that strongly exceeds the asset's intrinsic value.[1][2][3] It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.[4] Asset bubbles date back as far as the 1600s and are now widely regarded as a recurrent feature of modern economic history.[5] Historically, the Dutch Golden Age's Tulipmania (in the mid-1630s) is often considered the first recorded economic bubble.”

How does this apply now? Because in the housing market in general you have an industry that takes advantage of the following process:

Greater fool theory

Greater fool theory states that bubbles are driven by the behavior of perennially optimistic market participants (the fools) who buy overvalued assets in anticipation of selling it to other speculators (the greater fools) at a much higher price. ACCORDING TO THIS EXPLANATION, THE BUBBLES CONTINUE AS LONG AS THE FOOLS CAN FIND GREATER FOOLS TO PAY UP FOR THE OVERVALUED ASSET. The bubbles will end only when the greater fool becomes the greatest fool who pays the top price for the overvalued asset and can no longer find another buyer to pay for it at a higher price. This theory is popular among laity but has not yet been fully confirmed by empirical research.[8][9]”

This description can apply to my current landlord. At this time he is seeking a “greater fool” because he purchased the property I live in at such a high price that it appears he cannot sustain it himself. The property was taxed at $1.15m, but he bought it for $4.95m. On what scientific or market value research was this price supported other than the appraisers employed by 2 real estate agents? And realize that appraisers are protected from liability of error based on the fact that under the law it is not scientific research, but simply an opinion of the appraiser.

At the same time you have:

“Moral hazard

Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. A person's belief that they are responsible for the consequences of their own actions is an essential aspect of rational behavior. AN INVESTOR MUST BALANCE THE POSSIBILITY OF MAKING A RETURN ON THEIR INVESTMENT WITH THE RISK OF MAKING A LOSS – THE RISK-RETURN RELATIONSHIP. A moral hazard can occur when this relationship is interfered with, often via government policy.

A recent example is the Troubled Asset Relief Program (TARP), signed into law by U.S. President George W. Bush on 3 October 2008 to provide a Government bailout for many financial and non-financial institutions who speculated in high-risk financial instruments during the housing boom condemned by a 2005 story in The Economist titled "The worldwide rise in house prices is the biggest bubble in history".[29] A historical example was intervention by the Dutch Parliament during the great Tulip Mania of 1637.

Other causes of perceived insulation from risk may derive from a given entity's predominance in a market relative to other players, AND NOT FROM STATE INTERVENTION OR MARKET REGULATION. A firm – or several large firms acting in concert (see cartel, oligopoly and collusion) – with very large holdings and capital reserves could instigate a market bubble by investing heavily in a given asset, creating a relative scarcity which drives up that asset's price. Because of the signaling power of the large firm or group of colluding firms, the firm's smaller competitors will follow suit, similarly investing in the asset due to its price gains.”

THAT IS EXACTLY WHAT COSTA HAWKINS WAS DESIGNED TO DO. Also:

“However, in relation to the party instigating the bubble, these smaller competitors are insufficiently leveraged to withstand a similarly rapid decline in the asset’s price. WHEN THE LARGE FIRM, CARTEL OR DE FACTO COLLUSIVE BODY PERCEIVES A MAXIMAL PEAK HAS BEEN REACHED IN THE TRADED ASSET'S PRICE, IT CAN THEN PROCEED TO RAPIDLY SELL OR "DUMP" ITS HOLDINGS OF THIS ASSET ON THE MARKET, PRECIPITATING A PRICE DECLINE THAT FORCES ITS COMPETITORS INTO INSOLVENCY, BANKRUPTCY OR FORECLOSURE.”

WHICH IS THE THREAT BEING MADE BY THOSE WHO ARGUE AGAINST COSTA HAWKIS REPEAL. The industry will collude to punish the customers and the state by using the bubble as extortion.. Also:

“The large firm or cartel – which has intentionally leveraged itself to withstand the price decline it engineered – can then acquire the capital of its failing or devalued competitors at a low price as well as capture a greater market share (e.g., via a merger or acquisition which expands the dominant firm's distribution chain). IF THE BUBBLE-INSTIGATING PARTY IS ITSELF A LENDING INSTITUTION, IT CAN COMBINE ITS KNOWLEDGE OF ITS BORROWERS’ LEVERAGING POSITIONS WITH PUBLICLY AVAILABLE INFORMATION ON THEIR STOCK HOLDINGS, AND STRATEGICALLY SHIELD OR EXPOSE THEM TO DEFAULT.”

Which appears to have happened in this case. A Vertical Market where at every level of the process, the lending institution, the real estate agent, the real estate appraiser, the investor are all working together as a unit to manipulate the cost of living in the state of California.

And you expect the public to pay the price for this process? NO. The public must engage in significant regulation because without it, you will simply support inflated values where the intrinsic value will eventually be discovered and the bubble will burst. The longer you inflate it, the worse it will hurt. Time to make the correction now before it REALLY will be devastating.”

Your solution is to simply guarantee profits in a market that cannot sustain them anymore. And worse, you want laws that force those not responsible for the potential losses due to poor judgement by investor to be paid by those not responsible for it. That is simply NOT real business. That is in effect corporate welfare.

Sorry we are not responsible for the problems the Apartment industry has created for itself.

PSR,

Rocky & Bullwinkle spent years trying to catch Boris & Natasha and you just want to let socialism in.

Were going to need more Vodka and Caviar.

Hey Sergei, has your shift at the troll factory started already? Oh wait -- it's morning in Saint Petersberg already, isn't it?

TBM,
Your words:
"Yes, less than 25 years ago, Costa Hawkins was sold as the solution to the affordable housing crisis.

It failed.

We are NOT GOING TO REPEAT THE SAME MISTAKE AGAIN."
I say:
Even further back in time the rent control was sold as the solution to the affordable housing crisis.
It failed miserably, highest rents on the planet, 30,000 units sit vacant in SF alone, not counting the ones converted to condos and TICs.
I suspect SF housing market is beyond repair due to the excessive rent control regulations and building restrictions.

But for some strange reason TBM thinks that more of the same will miraculously cure the problem.
Insane!!!!

In response to mike rose you said:

“Even further back in time the rent control was sold as the solution to the affordable housing crisis.

It failed miserably, highest rents on the planet, 30,000 units sit vacant in SF alone, not counting the ones converted to condos and TICs.

I suspect SF housing market is beyond repair due to the excessive rent control regulations and building restrictions.”

However your revisionist history is incorrect if you read this information(Web Link :

“The Costa–Hawkins Rental Housing Act ("Costa–Hawkins") is a California state law, enacted in 1995, which places limits on municipal rent control ordinances. Costa–Hawkins preempts the field in two major ways.[1] First, it prohibits cities from establishing rent control over certain kinds of residential units, e.g., single family dwellings and condominiums, and newly constructed[2] apartment units; these are deemed exempt. Second, it prohibits municipal "vacancy control", also called "strict" rent control.

If an apartment is under "vacancy control", the city's ordinance works to deny or limit an owner's ability to increase its rent to new tenant(s). It works this way even in cases where the prior tenant voluntarily vacated the apartment or was evicted for cause (such as failure to pay rent). In other words Costa–Hawkins, by now prohibiting "vacancy control" in the above circumstances, mandates that cities allow an apartment owner the right to rent it when vacant at any price (i.e., usually the market price).[3][4]

Rent control in California is largely the creation of its municipalities. This ability of city governments is limited by the federal and state constitutions, as well as federal and state laws.[5] Costa–Hawkins is a key state statute enacted to manage the power of California cities to regulate their rental markets.[6][7]”

In fact if you go on to read:

“The Act: sponsors, and opposition:

The Costa–Hawkins Rental Housing Act became law in 1995. The statute became codified as Civil Code, §§ 1954.50 to 1954.535.[29] The legislation's sponsors were Democratic Senator Jim Costa (Fresno) and Republican Assemblymember Phil Hawkins (Bellflower).[30][31]

Introduced first in the Senate, the text of the legislation later became Assembly Bill 1164. After enduring several negotiated changes, it had passed in both chambers. The Republican Governor Pete Wilson then signed AB 1164 into law.[32]

Although understood as limiting rent control, an agenda more favored by Republicans, some Democrats supported the Act. The pro-tenant Western Center on Law and Poverty (WCLP) had endorsed several features of the Bill that served tenant interests: the prohibition of rent increases "if serious health, safety, fire, or building code violations were discovered and not corrected for six months," and some claims by subtenants to lower rent under an existing tenancy.[33][34]

The WCLP especially sought to organize the opposition, to "piece together a coalition" of scattered local groups (tenants, senior citizens, religion affiliated), together with California cities with rent control. Accordingly Santa Monica, Berkeley, and West Hollywood contributed funds to hire a lobbyist. A concession obtained was the 3-year phase-in of vacancy decontrol. Yet the capitol consensus was that Costa–Hawkins was a "done deal" and the opposition a "last gasp". With defeat and what they viewed as a rollback of some tenant advantages, rent control advocates became uneasy at the challenge to their victories of the 1970s and 1980s.[35][36]”

The simple fact is that Costa Hawkins was a state dictated preemption of rent control. Not because it was rent control was causing housing shortages. It was because the Apartment Industry sought and succeeded in taking local control of market regulations away. You of course want to spin it as that Costa Hawkins was a solution to a housing shortage. But it was not.

Further reading shows this:

"Shortage of affordable housing, & HAA

The housing cycle that began with the crisis of the 1970s and 1980s has apparently come full circle. A housing shortage has recurred and apparently reached the crisis stage (See: California housing shortage). In a 2014 California treatise on real estate development, the authors opined:

"[C]ommunities across California continue to confront the challenge posed by a scarcity of housing, particularly of affordable housing. In the last several decades, housing production in the state has lagged behind population and job growth, resulting in a housing deficit. ... While all citizens feel the impact of this housing shortage at some level, those with incomes at the lowest end of the economic spectrum of often bear the brunt of the shortage."[216][217][218][219][220]

Regarding the shortage in California, the Housing Accountability Act (HAA) was recently strengthened by amendments. Its 2016 version states: "(a) The legislature finds and declares all of the following: ¶(1) The lack of housing, including emergency shelters, is a critical problem that threatens the economic, environmental, and social quality of life in California. The passage of the ¶(2) California housing has become the most expensive in the nation. ... ."[221][222]

Here the legislature aims to overcome the shortage by increasing the housing supply. The HAA imposes detailed limits on a city's power to restrict new housing construction.[223][224][225][226][227] The recent HAA amendments, signed by Gov. Brown, were sponsored by three Democrats: Nancy Skinner, Senate – East Bay, Raul Bocanegra, Assembly – Pacoima, and Tom Daly, Assembly – Santa Ana.[228] Yet it's said that the HAA and similar bills subsequently introduced will not be enough.[229]”

Prior to Costa Hawkins, there was no need for the follow up legislation called the Housing Accountability Act (HAA) of 2017. Apparently, the housing crisis you claim occurred in 1995 was not sufficient to pass the HAA. In fact I cannot find any mention of a housing crisis to the extent we have today mentioned during 1995. In fact if you read this page (Web Link it contains the following information:

“From 1940 to 1970, California's population grew far more quickly than the national average, while its median home value stayed very close to the national average, because new homes were being built quickly enough to house the new arrivals. But starting in 1970, three major forces caused housing prices to rise dramatically: more powerful environmentalism (which led to greater land-use restrictions), density restrictions (which limited many places to single-family homes or no more than two stories), and community involvement in the development process (which allowed current but not future residents a say in who could live there).[22][1]:3,5

By 2016, the median price of a home in California, at $409,300, was more than twice the median price of a home in the U.S. as a whole, more expensive than any state other than Hawaii.[23] The shortage is state-wide--from 2010 to 2017, the state added only one new housing unit for roughly every five new residents--but is especially acute in employment centers such as the Bay Area and Los Angeles.[14]”

So you cannot in fact claim that rent control was any cause of the housing shortages prior to Costa Hawkins. The landlords love to try to deceive the public into thinking it was rent control that caused the shortages of housing. Again, the Costa Hawkins Act was supposed to provide the profits necessary for new housing to be built when it passed in 1995. But since then the industry has simply not provided the promised expertise in the efficient methods of planning, design, achieving community support, or gaining approval for projects it claimed it could prior to Costa Hawkins.

In order for your claim to be considered valid, you are going to have to provide some kind of historical record prior to 1995 that demonstrates that rent control was a cause of a housing shortage equal to the one we have today. Please do so?

Those who embrace socialism need to experience it in North Korea, Venezuela, and Cuba.

Those who can only think in Fox News sound bites should go experience socialism in Scandinavia instead.

TBM,
Are you claiming, in your insanity, that 30,000 vacant units in SF are due to existence of Costa Hawkins, not the onerous rent control scheme?
Are you claiming that all these units will come back on the rental market once CH is repealed( the landlords would be stuck forever with subsidizing tenants, as vacancy control will kick in)?
Are you claiming developers of new rental housing would love the uncertainty of their projected incomes controlled by tenants?
Are you claiming that Ellis Acting of SF homes and comps will decrease after repeal?
It so you are out of touch totally incompetent troll.

@psr,
Did you by any chance have in mind the multi years waiting list for the rent controlled apartment in Sweden?

@psr
Half a million are on the waiting list for rent-controlled flats in Stockholm, meaning a two-tier system, bribes and a thriving parallel market

In response to mike rose you said:

“Are you claiming, in your insanity, that 30,000 vacant units in SF are due to existence of Costa Hawkins, not the onerous rent control scheme?”

Actually, YES. Because the landlords are purposefully withholding them from being in the market, thus manipulating the prices of apartments in the city. Once rent control is universal, there will be no benefit to the owners to continue to not receive any rental income on those units. You love to try to ridicule when someone sees the big picture don’t you? You said:

“Are you claiming that all these units will come back on the rental market once CH is repealed( the landlords would be stuck forever with subsidizing tenants, as vacancy control will kick in)?”

First, never mention that landlords subsidize tenants. A subsidy is performed by governments and not private individuals. That has been a notorious claim. Here is the definition of a “subsidy”:

What is a 'Subsidy'

A subsidy is a benefit given to an individual, business or institution, USUALLY BY THE GOVERNMENT. It is usually in the form of a cash payment or a tax reduction. The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public, given to promote a social good or an economic policy.

A subsidy takes the form of a payment, provided directly or indirectly, which provides a concession to the receiving individual or business entity. Subsidies are generally seen as a privileged type of financial aid, as they lessen an associated burden that was previously levied against the receiver, or promote a particular action by providing financial support.

A subsidy typically supports particular sectors of a nation’s economy. IT CAN ASSIST STRUGGLING INDUSTRIES BY LOWERING THE BURDENS PLACED ON THEM, OR ENCOURAGE NEW DEVELOPMENTS BY PROVIDING FINANCIAL SUPPORT FOR THE ENDEAVORS. Often, these areas are not being effectively supported through the actions of the general economy, or may be undercut by activities in rival economies.”( Web Link

IN conclusion, there is no such thing as rent control can be defined as a subsidy for a tenant. The landlords constantly state this erroneous claim in order to justify the argument it is somehow “stealing” from them.

I am saying that the loss of any revenue especially when Costa Hawkins is repealed will in fact encourage them to be reactivated. Simply put, when all apartments are treated under the same rules, these units will be simply utilized because they exist already. Again you do not seem to understand the “opportunity cost” it will be when the units are simply not utilized at all. You said:

“Are you claiming developers of new rental housing would love the uncertainty of their projected incomes controlled by tenants?”

That has always been a reality even in the current market. The tenants and landlords have an equal force on the prices of a product in REAL business. As long as market manipulation is not being used to swing the market forces in favor of the landlords. What has been happening in the “economic bubble” is that poor judgment in the apartment industry has been guaranteed by the customers via the “Costa Hawkins” act. Again, what reality are you selecting to perceive? Or worse what reality are you imposing on the public? You said:

“Are you claiming that Ellis Acting of SF homes and comps will decrease after repeal?”

I have not made that claim, but even if those currently owning units not on the market sell out, those units will still exist as long as they are not demolished. These units can and will likely be purchased at a bargain because of the market correction, thus providing the new owner the freedom to market them at more affordable rates. The reality is that ones that currently are in the market by being protected from being forced to be accountable for their poor judgement, will be either forced to become efficient, or leave. Either are good for the public more than the current situation given that the industry is responsible for their own failures. NOT THE TENANTS.

I will not even respond to the last statement. You seem to be resembling your own evaluation.

Are you sure you want the existence of a housing shortage to be an indictment of a system? It would be really inconvenient for your argument if there were any housing shortages under capitalism...

Are you instead upset as to how shortages are dealt with? That the wealthy can't simply buy their way to the front of the line, and the wealthy landowners can't simply siphon off money from the poor.

@psr
You nailed it this time finally.
I am not happy how the government deals with housing shortages.
Essentially what happens is that the way they deal with shortage is price fixing. This in turn causes more shortages, and the state is in perpetual downward spiral.
Couldn't be simpler than that.

I'm not sure what finally got through to you, as I've been saying the same thing the whole time. Capitalism prioritizes the wealthy, and the pursuit of wealth, over all other considerations. This is exactly why we cannot rely on profit-seekers for our housing, as you've shown they're more than willing to hold us hostage and don't have the best interests of our community in mind.

no, capitalism has created more opportunities for those who come from "nothing" to create "something". Rather than trying to take away someone else's "something" perhaps you could try to CREATE something.

In response to mvresident2003 you said:

“Rather than trying to take away someone else's "something" perhaps you could try to CREATE something.”

Rent Control is not TAKING any property away from anyone. You seem to be arguing from a false premise.

So far no court has ever claimed that “Rent Control” is TAKING the property away from the owner.

The ”Value” of the property however is a floating value. Anyone in the industry has full awareness of this reality. And since money is a currency, another “floating” value, there simply is no way the fact that the “value” of property changing due to “Rent Control” cannot be determined as a taking. Please read this (Web Link

There are hundreds of listings of people arguing that the use of “rent Control” negative impact on the “Value” of the investments are a “Taking” and is unconstitutional. However there is no Federal Case or California Case that establishes this legal determination.

In fact in 2012 the U.S. Supreme Court rejected this idea found here (Web Link :

Justices' refusal to hear the case, brought by a pair of New York City landlords, is a setback for property rights activists.

April 24, 2012|By David G. Savage, Washington Bureau

WASHINGTON — The Supreme Court rejected a constitutional challenge to New York City's famed rent-control ordinance, a post-World War II housing measure that limits the rents of more than a million apartments.

The court's refusal Monday to hear the case is a setback for property rights activists, who had hoped a more conservative court would protect landlords and a free market in rentals. For decades, critics have said rent-control laws deny property owners the right to fully profit from their investments.

But the high court has been reluctant to second-guess zoning or property regulations unless they deny the owner all use of his land.

The justices, four of whom grew up in New York City, turned away an appeal from James and Jeanne Harmon, who own a five-story brownstone building on West 76th Street in Manhattan. The couple said they had no choice but to rent three apartments on the upper floors for less than half of their market value. They also said that one of their longtime tenants could pay a $1,500-a-month mortgage on a Long Island house because he paid only $951 a month to rent a unit in the Harmons' building.”

The fact is as long as the investor is 100% denied all use of the land (or investment) then there is no “Taking”. Thus there is no transferences of ownership or taking away the property. You know this.

The critics of “Rent Control” also knows this. But they will say anything to enrage or deceive the public to prevent the public from taking their legitimate actions provided under the Republic of the U.S> and the Republic of California.

@psr ideas are purely communist ideas.
"Community before profits", hate of rich people etc. these are slogans often used by aspiring communists.
However history shows that these "noble" ideas never worked well.
But for some strange reason they never learn and try the same failed and dangerous ideas over and over again.

Madness!!!

It's pretty amazing that you recoil in horror at the idea of "community before profits." As is typical, both you and mvresident2003 resort to name-calling and personal attacks because everyone can see you have no actual argument t against the ideas, just fear-mongering and scare tactics.

In response to mike rose you said:

“@psr ideas are purely communist ideas. “

I am hearing the McCarthy hearings all over again, are you wanting to open up a new “HUAC” hearings again? Is only “Red-Baiting” the only answer you can think of? You said:

“"Community before profits", hate of rich people etc. these are slogans often used by aspiring communists.”

NO THERE IS NO HATRED HERE. This is simply business, there are sometimes when people make bets and lose their shirt. You said:

“However history shows that these "noble" ideas never worked well.”

What “noble” ideas? I am only in support for the legitimate process of the American market system we have today. Simply put, nothing “Communist” about it. Right? You said:

“But for some strange reason they never learn and try the same failed and dangerous ideas over and over again.”

One could say the same here, the idea that doing the same thing over and over again regarding Costa Hawkins will never solve the problem. That results in your claim:

“Madness!!!”

It is said that:

The definition of insanity...

I respectfully suggest that the quote "The definition of insanity is doing the same thing over and over and expecting it to come out different" applies. The CAA expects that it will eventually solve the problems of housing as long as profit is guaranteed. That simply does not work. That is MADNESS!!!

@ @psr, where is my name calling? I have no name calling or personal attacks. There is no fear mongering or scare tactics. I quite simply stated that rather than trying to TAKE things from others perhaps time is better spent CREATING.

And BM, I disagree. Rent control is TAKING money from one who invested, who took risk, who has WORKED to earn. I'd call that "taking property"

My mistake, you only went for personal attacks rather than both name-calling and personal attacks. Happy to clarify for you!

In response to mvresident2003 you said:

“And BM, I disagree. Rent control is TAKING money from one who invested, who took risk, who has WORKED to earn. I'd call that "taking property"”

You have the right to that opinion. And you are entitled to your First Amendment Right to express yourself as defined here:

“The First Amendment (Amendment I) to the United States Constitution prevents Congress from making any law respecting an establishment of religion, prohibiting the free exercise of religion, or abridging the freedom of speech, the freedom of the press, the right to peaceably assemble, or to petition for a governmental redress of grievances. It was adopted on December 15, 1791, as one of the ten amendments that constitute the Bill of Rights.”

I will never state you cannot express your opinion. But the courts decisions currently do not agree with your point of view.

@@psr
First of all, pick your own name instead of connecting mine to your crackpot notions. If all you have is your distain of those who have had enough intelligence and foresight to invest their money wisely and acquire a few rental properties so they can have enough income to finance their own retirement years, rather than depend on government largesse to feed and house them as they age, then I feel sorry for you.

There should be no profit to be made in housing people? What nonsense! People should be allowed to make money by providing things that other people desire to have and that includes housing. That is how our system grows and thrives. This country thrives when people are not shackled by those too jealous or incompetent to figure out how to make whatever gifts they have been given in this life allow them to earn enough to care for themselves. If everything is handed to you on a silver platter, then you have no reason to be productive. Did it ever occur to you that, if you continue to assume that "the government" can provide all you need, that, eventually, those who are working and having their profit stripped from them so that the government can turn around and hand that money to people who are sitting on their behinds and doing nothing for themselves, will stop being productive?

Another news flash. People who own property had to WORK to earn the money to buy that property and who are YOU to say they don't deserve to enjoy the fruits of their labor? At least they are providing something to society that it needs. Why is what they do less valuable than what you do? Instead of painting landlords as these evil people stealing from the downtrodden, you should realize that they have to maintain those building, pay taxes and numerous fees, be available for phone calls at all hours demanding repairs, accept months without income when tenants decide to stop paying what they agreed and hire lawyers to try to get those tenants to leave if they decide to squat. I imagine none of that turns up in your job and I also imagine you have a regular income. They don't due to all that.

Stop being such a hater and start dealing with the fact that nothing in this life worth having is free. If you aren't willing to work for it and whatever it is isn't worth enough to you to sacrifice for it, then you don't deserve to have it. That isn't the fault of anyone but you.

Great post psr, [Portion removed due to disrespectful comment or offensive language]

I just got bored and didn't feel like registering an account to respond, yet again, to someone who doesn't have an actual argument or response to any of my points, but instead just posts a bog-standard libertarian monologue. Maybe if psr actually addressed any of my points I'd have a real response, but that day is unlikely to ever come.

In response to PSR you said:

“There should be no profit to be made in housing people? What nonsense! People should be allowed to make money by providing things that other people desire to have and that includes housing. That is how our system grows and thrives.”

I never stated that there should be no profit. So please do not put words in my mouth. You said:

“This country thrives when people are not shackled by those too jealous or incompetent to figure out how to make whatever gifts they have been given in this life allow them to earn enough to care for themselves. If everything is handed to you on a silver platter, then you have no reason to be productive.”

You are saying that you assume tenants are NOT productive? That is not a realistic determination. You said:

“Did it ever occur to you that, if you continue to assume that "the government" can provide all you need, that, eventually, those who are working and having their profit stripped from them so that the government can turn around and hand that money to people who are sitting on their behinds and doing nothing for themselves, will stop being productive?”

Again another assumption that those that disagree with you are NOT productive. Please demonstrate with proof that your opposition in this topic are in fact NOT PRODUCTIVE? You said:

“Another news flash. People who own property had to WORK to earn the money to buy that property and who are YOU to say they don't deserve to enjoy the fruits of their labor?”

I never said that either. What I have said is that this market has been relying on tenants bailing out landlords for poor business practices. That is required for said profit to be achiewved in a market that does not GUARENTEE a profit. The profit is achieivable where good business decisions and effective property management succeeds in making a profit. You know that. You said:

“At least they are providing something to society that it needs. Why is what they do less valuable than what you do?”

If you ask that question, you must prove that all tenants must be in fact “LESS VALUABLE” than the landlords. The nature of the question is simply wrong. As I have pointed out, many tenants work in fields that are in fact much more valuable than a landlords profession. But you want to insult your customers instead. You said:

“Instead of painting landlords as these evil people stealing from the downtrodden, you should realize that they have to maintain those building, pay taxes and numerous fees, be available for phone calls at all hours demanding repairs, accept months without income when tenants decide to stop paying what they agreed and hire lawyers to try to get those tenants to leave if they decide to squat.”

Tenants withoild moiney based on failures to provide the services you contracted. Please read the following cases:

Web Link

Specifically:

“It's been a long battle — tenants have been complaining about conditions at the complex for over a year. In that time, management has replaced old wood-framed windows with modern vinyl and applied a fresh coat of paint to the building exteriors, but Bautista says significant habitability issues remain on the inside. He flips through a slide show of photos on his phone highlighting water damage and walls coated with black mold; he says all the photos were provided to him recently.”

Web Link

Where the landlord failed to maintain the property properly, it is completely legal and appropriate to withhold rent. You know that. You said:

“I imagine none of that turns up in your job and I also imagine you have a regular income. They don't due to all that.”

Actually, yes the do. Why should a tenants be subjected to living conditions that are not being maintained? Even “professionals” who are tenants will use what remdies thay have to correct for landlords mismanagement. You said:

“Stop being such a hater and start dealing with the fact that nothing in this life worth having is free. If you aren't willing to work for it and whatever it is isn't worth enough to you to sacrifice for it, then you don't deserve to have it. That isn't the fault of anyone but you.”

Again, you assume all tenants do not deserve respect, and you have no appreciation for the fact that they are your customers. You simply want to treat them as cattle. WOW.

mike rose:

You know I was just thinking before I wrote down my response.

TBM,
No one said tenants don't deserve respect.
You are making this up as you often do.
What tenants don't deserve is to live above their means.
No one does.
PSR never said tenants are not productive, you made up this "fake news" again.
He said people should work hard to earn ENOUGH to take care of themselves.
There is plenty affordable places in US where rents are affordable. No one should be guaranteed to live in the area they can't simply afford at expense of others.

In response to mike rose you said:

“No one said tenants don't deserve respect.”

Simply put, I can “Cut and paste” hundreds of comments that demonstrated no respect for tenants from the Mountain View Voice. Constant complaints that tenants are the problems of the apartment industry. You said:

“You are making this up as you often do.”

I am willing to take the work to show all of the evidence, in fact you have stated many of them. You said:

“What tenants don't deserve is to live above their means.”

They do deserve to live where they pay their rents, period. It is just that you do not like that the public can and will regulate a market that is in such an economic bubble, that it is about to burst causing catastrophic public loss. You said:

“PSR never said tenants are not productive, you made up this "fake news" again.”

PSR SAID:

“This country thrives when people are not shackled by those too jealous or incompetent to figure out how to make whatever gifts they have been given in this life allow them to earn enough to care for themselves. If everything is handed to you on a silver platter, then you have no reason to be productive.”

AND :

““Did it ever occur to you that, if you continue to assume that "the government" can provide all you need, that, eventually, those who are working and having their profit stripped from them so that the government can turn around and hand that money to people who are sitting on their behinds and doing nothing for themselves, will stop being productive?”

PLEASE TELL US HOW WHAT I SAID WAS INACCURATE? My comments were:

You are saying that you assume tenants are NOT productive? That is not a realistic determination. You said:

Again another assumption that those that disagree with you are NOT productive. Please demonstrate with proof that your opposition in this topic are in fact NOT PRODUCTIVE? You said:

“He said people should work hard to earn ENOUGH to take care of themselves.”

THAT IS NOT WHAT HE SAID, HE SAID:

“Another news flash. People who own property had to WORK to earn the money to buy that property and who are YOU to say they don't deserve to enjoy the fruits of their labor?”

“At least they are providing something to society that it needs. Why is what they do less valuable than what you do?”

“Instead of painting landlords as these evil people stealing from the downtrodden, you should realize that they have to maintain those building, pay taxes and numerous fees, be available for phone calls at all hours demanding repairs, accept months without income when tenants decide to stop paying what they agreed and hire lawyers to try to get those tenants to leave if they decide to squat.”

“Stop being such a hater and start dealing with the fact that nothing in this life worth having is free. If you aren't willing to work for it and whatever it is isn't worth enough to you to sacrifice for it, then you don't deserve to have it. That isn't the fault of anyone but you.”

NOW, WHO IS TALKING ABOUT “REVISING” HISTORY?

Another related story that proves my point:

(Web Link

Specifically:

“I'm not predicting the end of the world. For property prices to go down an inflation-adjusted 15-20 percent from peak to trough is a perfectly normal market cycle. It does sting, though, if you put 10 percent down on a two million-dollar home and have to turn around pay money at closing when selling 3 years later.”

And:

Web Link

Specifically:

“The housing bubble that precipitated it also qualifies. Bubbles are fuzzy only in that everyone knows what they are yet it isn't "proven" until they pop. In that gray area before the end rationalizations abound; this is the key ingredient that makes a bubble in the first place, the fuel to keep it going beyond all rationality.

It infects even these practitioners of Positive Economics. Ben Bernanke's tragic history of quotations doesn't begin with "subprime is contained." Throughout the middle 2000s, he and those like him were quick with "nothing to see here." It didn't matter how much economic history became bent by the asset class distortion, these "data dependent" Economists could twist any stochastic analysis to their nonsense.

and:

Web Link

Specifically:

“In the study, they analyzed 37 metro areas across the U.S. to find how much housing prices have gone up since their lowest point following the financial crisis and how affordable homes are based on the median income for that city. Below are the top 10 cities in danger of a housing bubble.

#1 San Francisco-Redwood City-South San Francisco, Calif.

#2 San Jose-Sunnyvale-Santa Clara, Calif.”

So, please bear in mind, the Apartment Industry knows that there is going to be a significant correction in this areas Apartment Market. Thus they have been raising their prices in order to cash out before they leave. The fact is that there will be a significant sell off once the bubble bursts.

Web Link

"The return to education, for example, has increased in the United States but it’s less well appreciated that in order to earn high wages college educated workers must increasingly live in expensive cities.

One consequence is that the net college wage premium is not as large as it appears and inequality has been over-estimated. Remarkably Enrico Moretti (2013) estimates that 25% of the increase in the college wage premium between 1980 and 2000 was absorbed by higher housing costs.

Moreover, since the big increases in housing costs have come after 2000, it’s very likely that an even larger share of the college wage premium today is being eaten by housing.

High housing costs don’t simply redistribute wealth from workers to landowners. High housing costs reduce the return to education reducing the incentive to invest in education.

Thus higher housing costs have reduced human capital and the number of skilled workers with potentially significant effects on growth.

Housing is eating the world."

Thank you, "Fact check," for backing what I've been saying this entire time. When housing is seen as a way to get rich and earn a profit, it will increasingly consume all the money generated by people who work for a living. Landlords, as they've shown over and over in this article, are concerned primarily about their bottom line, and don't care one bit about the effects on our community.

Fact check,
You and the research you cite are 100% right.
There is no question that high housing costs eat into people's income.
The question is how to solve this problem.
Some, like TBM and @psr think that we need to stop building by discouraging investment in housing (CH repeal will guarantee that). They are self centered and all they really care about is their current rent to be as low as possible.
Is this going to reduce housing costs? Who is going to provide new housing for ever growing California workforce?
TBM or @psr or LOL?
They are not even capable of providing housing for themselves. All they do is repeat empty and tired slogans about caring for community etc.
These are not real solutions, and we need real solutions not price fixing that never works.

This is where you're clearly wrong, mike, and putting words in my mouth. I've never advocated discouraging investment in housing. We as a community need to be investing in housing. What we shouldn't be doing is allowing out-of-town landlords to siphon off our hard-earned dollars. The way you rely on personal attacks readily shows just how little of an argument you have.

@mike rose ::

CH has been in effect for 20+ years. In Mountain View, *before* 2016 - over 90% of the rental housing stock was pre-1995.

During the past 20 years we have gone through multiple booms including the granddaddy of the all the dot-com boom. In that time the free market/apartment developers have not built a significant amount of housing.

This proves that CH had *no* impact on apartment developers building more units. If the dot-com boom couldn't get apartment developers to build - nothing will.

FAR (Web Link ), parking minimums and zoning limits on height have a far greater impact on an apartment building's long term return than any control on short-term percentage increase.

Fact Check,
Your statement that CH had no impact on building more units does not make any sense.
More vs. what?
More vs no CH in rent controlled jurisdictions?
Not to many cities had rent control before 1995. Berkeley i.e was one that had. There were no new units built in Berkeley before CH since the rent control was imposed. Many hundreds of Single family homes were taken off the rental market.
CH is not a miracle wand that makes housing built as you suggest. It won't help if the cities make the building process impossibly difficult.
But without it the housing freeze is absolutely guaranteed.

@psr
Unfortunately again hateful class warfare slogans.

In response to mike rose you said:

“There is no question that high housing costs eat into people's income.

The question is how to solve this problem.

mike rose, what are you suggesting regarding the problem? Because doing the same thing over and over again expecting those like yourself to change the results will get everyone nowhere. You said:

“Some, like TBM and @psr think that we need to stop building by discouraging investment in housing (CH repeal will guarantee that). They are self centered and all they really care about is their current rent to be as low as possible.”

Since the Apartment Industry has simply expected their incomes to grow without increasing building, why should you gain from the public loss? The landlords expect the right to change the price on services that do not change. Since when should rents increase when the products sold do not change at all? Of course you do not mention that the landlords have done little or nothing to improve a current tenants living. You claim that rents should increase simply based on poor business management, that’s all. You said:

“Is this going to reduce housing costs? Who is going to provide new housing for ever growing California workforce?

TBM or @psr or LOL?”

The market will improve with CH being repealed. It is just that people in your peer group will not benefit. There will be opportunities for anyone who wants to be part of the solution. But those who are part of the problem are going to either quit, or see a significant change in their business outlook. You said:

“They are not even capable of providing housing for themselves. All they do is repeat empty and tired slogans about caring for community etc.”

Really, all I do is inform the public that the business of apartments are in a significant point of change. That is all. And that the “claims” made by the current lobbying groups simply will not improve the situation that they made themselves. You said:

“These are not real solutions, and we need real solutions not price fixing that never works.”

And the fact is the private sector has been price fixing for more than 20 years it is called “price-flooring” the market like crazy. Price-flooring is (Web Link

“Price floor

A price floor is a government- OR GROUP-IMPOSED PRICE CONTROL or limit on how low a price can be charged for a product.[1] A PRICE FLOOR MUST BE HIGHER THAN THE EQUILIBRIUM PRICE IN ORDER TO BE EFFECTIVE.

The argument made for price flooring can be summed up here:

“Effect on the market

A price floor set above the market equilibrium price has several side-effects. Consumers find they must now pay a higher price for the same product. As a result, they reduce their purchases or drop out of the market entirely. Meanwhile, suppliers find they are guaranteed a new, higher price than they were charging before. As a result, they increase production.”

However, “Production” has in fact been lagging because the “Suppliers” want and do dictate to the market. So the positive economic benefit has been destroyed. It also states:

“Taken together, these effects mean there is now an excess supply (known as a "surplus") of the product in the market to maintain the price floor over the long term. The equilibrium price is determined when the quantity demanded is equal to the quantity supplied.”

But since there is no “surplus” because the industry does not build, this benefit to the market did not happen: It finally points out:

“Further, the effect of mandating a higher price transfers some of the consumer surplus to producer surplus, while creating a deadweight loss as the price moves upward from the equilibrium price.”

Which is occurring now. And when the “market” forces of “market” regulations achieve a “market” correction. The “Deadweight” will be dropped. The businesses that are not healthy and are not efficient will be the first to fall. NOW is the time to get your business in order to survive or better profit in the future.

TBM,
What am I suggesting about solving the housing problem?
The same thing that virtually every economist is suggesting, get rid of the excessive government regulations in CA,and yes that includes rent control.
Did you ever ask yourself why is it so that developers build like crazy all over the world but not in California?
Why 30000 empty units sit in SF?
After all the rents here are the HIGHEST in the world!!!
And they all prefer go forgo all these profits.
Why?
Does it make sense in a normal free market?
Of course not.
The government, through excessive and onerous regulations discourages the builders to the extent that they deem building way to risky here. And your convoluted logic that CH repeal will somehow improve the situation is sick at best.

In response to mike rose you said:

“The same thing that virtually every economist is suggesting, get rid of the excessive government regulations in CA,and yes that includes rent control.”

That was Costa Hawkins. You succeeded in getting rid of Rent Control in 1995. But you also failed to get anything solved after 20 years. You said:

“Did you ever ask yourself why is it so that developers build like crazy all over the world but not in California?”

It is because you succeeded in making such a shortage, that profits are made by in effect NOT building are greater than building. You obviously do not understand the real world. You said:

“Why 30000 empty units sit in SF?”

It is collusion by the apartment industry to increase the shortage of housing and take advantage of Costa Hawkins. By withholding those units, you extorted more building of new apartments post 1995, making Costa Hawkins apply to those units. Thus subverted the rent control, and inflated the values of those older and new units. Why do you ask questions that result in the answers that do not support your opinion? You said:

“After all the rents here are the HIGHEST in the world!!!”

Please provide proof, from what I understand Tokyo has the highest. You said:

“And they all prefer go forgo all these profits.”

What does this mean? You said:

“Why?”

What does this mean? You said:

“Does it make sense in a normal free market?”

WE have a normal free market. The majority of First World economies have a “mixed markets”. They seem to be working out fine. You said:

“The government, through excessive and onerous regulations discourages the builders to the extent that they deem building way to risky here. And your convoluted logic that CH repeal will somehow improve the situation is sick at best.”

It is better than expecting anything to change given the continuation of the status quo. Again, you are just not wanting to have to explain to your investors how inefficient your management is. And when CH is repealed, it will eliminate your tool to cover up for the losses you achieve without dictating price increases on products that do not improve, the products do not change, and thus do not deserve a price increase. Your cost controls are so poor that you depended on your price increases.

TBM,
You said:
"And when CH is repealed, it will eliminate your tool to cover up for the losses you achieve without dictating price increases on products that do not improve, the products do not change, and thus do not deserve a price increase"

I will try to explain to you like to a first grader:

I do NOT dictate price increases. If I did I would ask $20,000/month rent.
Supply and demand finds equilibrium price in free market.
You are pathologically obsessed with a conspiracy of property owners to "fix the price".
Where was this conspiracy few years ago when landlords were forced to reduce rents or the rents were stagnant for the extended period?
Is this "conspiracy " a relatively new thing?

Another point, housing is an asset, not simply a product.
It is held for a long time and through the centuries has been and always will be a subject of FREE MARKET price fluctuations due to changing demand and supply.
Sometimes price goes down (asset holder loses), other times goes up (gains). This asset does not necessarily need to be improved or not to be subject to these fluctuations.
This is normal and healthy market behavior.
What is not healthy is the artificial price capping. It distorts the market and leads ultimately to shortages, which we are suffering now.

In response to mike rose you said:

“I do NOT dictate price increases. If I did I would ask $20,000/month rent.”

In fact the industry does, it says, you pay our price or you live somewhere else. You know that. You said:

“Supply and demand finds equilibrium price in free market.

You are pathologically obsessed with a conspiracy of property owners to "fix the price".”

Please provide proof that my obsession is not correct? Please demonstrate how it is pathological? You said:

“Where was this conspiracy few years ago when landlords were forced to reduce rents or the rents were stagnant for the extended period?”

Please demonstrate that there is a “conspiracy”? Political action that creates market regulations do not qualify because the VOTERS make the decision. Not a select group, in a secret chamber, making up the rules. Which the current Apartment Market does participate in, covert meetings, deal making, and collaboration of non-competition in the market. Your perspective is that it is a conspiracy only when it does not benefit yourself or your peers. But if it was to your benefit, it is simply the “free-market”. You said:

“Another point, housing is an asset, not simply a product.”

However it does qualify as a product as defined as: “a (1) : something produced; especially : commodity 1 (2) : something (such as a service) that is marketed or sold as a commodity (Web Link So, why can’t housing be both? And thus why NOT treat the “product” as a static item as long as it is not changed. The danger of treating “housing” as an asset is that it can be manipulated regarding prices even though it has not in fact “changed”. So let’s say you’re right it is an asset. The fact that it still is not changed or improved in effect removes the justification of a price increase. Only where it is designed to be more scarce, like stock buyback practices in the stock market, does the industry use to increase the prices. Does that in effect truly improve the value of the asset or product when it has not been improved? You know the answer is NO. You said:

“What is not healthy is the artificial price capping. It distorts the market and leads ultimately to shortages, which we are suffering now.”

Again, Costa Hawkins bans rent control. We have the worst shortage in California History. You cannot realistically claim that rent control caused the shortages today after 20 years of rent control being illegal in the state of California. NO it was the industry taking economic advantage of designed scarcity that caused this problem and you know it.

@@psr

Too lazy to register your name, but we should all listen to your tired "hate the landlords because they are rich" rhetoric? I don't really think you are helping your point.

I did refute your points and logic but, since you are mired in the aforementioned rhetoric, you won't see the sense in my argument. Your loss, not mine.

In your world, people who work hard should just willingly hand over their hard-earned money to care for those who refuse to do for themselves. Before you make the usual argument that there are people who are unable to care for themselves, I would like to point out that the number of people who are legitimately disabled and can't at least contribute to their own care is vanishingly small. Caring for them wouldn't cost half what we spend on public programs.

I suggest that, before you post your next set of lofty platitudes, that you open your home to some low-income individual, preferably a homeless person, and charge them a nominal rent. Allow them to use your house as they choose and place no restrictions on their behavior. Should they trash your house, please pay for damage without complaint. If they want to cook meth in your kitchen, you should let them, because a landlord shouldn't impede the tenants free use of their home. If they fail to pay the trivial rent you ask of them, let them stay anyway, because, after all, that's what you expect others to do.

Part of the reason people should have to pay market-price for rent is so that they will treat the property with respect, just as anyone who is a guest in the home of another should do. And, FYI, many renters disrespect the property they inhabit. If you want to actually understand those you feel so free to attack, you should spend some of your time working to care for an apartment or building. I imagine it would remove those blinders of yours rather quickly.

I worked my way through college cleaning apartments after the tenants vacated and it is seldom that property is returned in the condition that it was received. I have hauled out broken furniture, weeks worth of garbage and other unwanted items. I have scrubbed kitchens and bathrooms that would make the sensitive wretch for hours. I have seen things done to apartments that supposedly civilized people would never do. And do you know which apartments are most likely to be left in this state? They are the ones with the lowest rent. They have small deposits that never cover cleaning up the mess left behind and the landlord is left to pay for it or attempt to track down the people and sue, with low odds of recovering their expense. So you'll have to excuse me if I have little sympathy for those who demonize landlords, because I know exactly the things they have to tolerate and that includes being attacked by people like you, who have no knowledge but lots of spare time and platitudes.

Repeal of CH will remove many small landlords from the market, leaving the rental market to large property owners with deep pockets and lots of experience with gaming the system. If you think that's better, then enjoy the chaos to come. I figure if the California government wants it, it won't work and, since it won't affect me either way, I plan to sit back and wait for the complaints to start. It should be entertaining, though not pretty.

You haven't refuted anything because you've failed to actually address my argument. If you spent more time reading my words rather than posting personal insults, you'd understand that.

Let's jump back to your post that kicked this off: "Owning rental property is a business, not a charity. When it becomes unprofitable to do so, people will stop doing it." I agree with you 100% on this. The crucial next step you miss is asking the question: should it be this way? Should we, as a community, have to worry that owning rental property will become unprofitable and we will be left holding the bag? I say no, we should not be held hostage by such threats, and therefore we need to take responsibility for housing as a community.

ICYMBI:

This story came up today (Web Link Mind you, the State of Washington does not have any rent control, but they are in the same crisis as California. Specifically the story stated:

“That’s one insight from a new survey released from the University of Washington and the Seattle Office of City Auditor. The online survey asked 4,236 property owners and managers about their practices, Seattle’s landlord/tenant laws, and their feelings about the city council. In a surprise to no one, they are pissed. And, despite landlord lobbyists' insistence that landlords are “really nice people” who are “just like us,” the landlords who participated in the survey showed little appetite for city council efforts to help renters.

The survey gave respondents a list of potential goals and asked them which of those goals the city council should have as it establishes housing policies. The goals included things that would favor tenants, LIKE INCREASING THE SUPPLY OF RENTAL UNITS AND PROVIDING AFFORDABLE HOUSING, and things that would favor landlords, like making it easier for them to terminate leases and “reducing risks to landlords associated with providing affordable housing units.”

THE VAST MAJORITY OF LANDLORD RESPONDENTS (89 PERCENT) CHOSE NONE OF THE GOALS. Not one of the goals had support from more than 1 percent of respondents.”

Why are studies not being performed in California? Is it because the landlords would admit that they do not want increasing the supply of rental units and providing affordable housing?

Again, since 20+ years after Costa Hawkins was enacted, the industry has not built practically any new units in the whole state, it would be pretty apparent that this will not change.

I have a proposition.

First, for 5 years establish a rent rollback on all units in the state of California to 2015 because it is the 20th year since passage of Costa Hawkins.

Second, after 5 years if the Rental Housing industry not gotten 20% improvement on the lack of housing plans cleared to build or ground broken, it will be extended for another 5 years.

Third, when the 20% improvement is achieved, the industry will be provided, 20% potential recovery of the rent rollback. Meaning the rents will increase 20% toward the current market rate plus CPI. That would result in most likely a 25% average increase in all rents.

Fourth, after 5 years from that milestone the same process will occur.

This will continue until there is 100% satisfaction of the housing needs in the state of California.

Thus there is an interest to correct for the problem of lack of housing in California. And that the problem will be solved.

Fifth, for every year the housing returns to shortage, a reduction of 10% accumulating will be levied. Meaning if the housing returns to shortages for 5 years rent rates would be reduced 50%. Until the shortages have been equalized.

So there is a way for the industry to reverse this prospect. If the industry is in fact going to succeed in solving the problem.

But you know that what the industry groups like the CAA love to claim they can solve the problem. But let’s make it so they HAVE to solve the problem by giving them the INCENTIVE to solve it.

NO MORE DELAYS. NO MORE EXCUSES. NO MORE PROMISES. JUST RESULTS.

The Voice is a media outlet that removes all comments that don't fit their socialist agenda.
Beware when you silence the very persons that challenge your mode of thought because that will isolate you from the truth and reality.

The truth is what will guide the history of your city and this Country and shame the Voice from allowing those who have different views.
You are no better than racists when you silence opposing views and today I proclaim you be worse than that.

The people of Mountain View deserve to hear all sides of the debate and for you to control the dialog, you are shamed as a media outlet.

Howard:

Do you have something constructive to talk about?

I am listening.

In order to erect a building two basic conditions need to be met:
1. There has to be a willing and able builder
AND (not OR)
2. The local jurisdiction has to allow the profitable construction.
The pool of willing builders is at this time assured by CH existence. And actually many new apartments were built since CH inception thruout the state. There your claim is untrue that nothing was built.
Even proponents of rent control cite studies claiming that landlords LIKE to build in rent controlled jurisdictions.
This is ONLY due to CH existence.
But the condition #2 has to be met too.
And unfortunately permitting process and required costs are so burdensome that often the construction does not pencil out (given the rent amounts which could be charged)
But TBM thinks that #1 condition has to be removed, so there would be no willing builder and that would somehow solve the problem.
By the same logic I could argue that if local jurisdictions were not approving building permits in sufficient manner, they are to be blamed for housing shortage and therefore the solution is to STOP issuing permits at all.
Crazy?
Not according to TBM line of thinking.

In response to mike rose you said:

“The pool of willing builders is at this time ASSURED BY CH EXISTENCE. And actually many new apartments were built since CH inception thruout the state. There your claim is untrue that nothing was built.”

I thought we were promoting a “free market”? Since when should the laws assure that builders be “subsidized” by the public laws? You simply just proved the point that the CH was not designed to do anything but put more burdens on the customers instead of providing housing. You said:

“Even proponents of rent control cite studies claiming that landlords LIKE to build in rent controlled jurisdictions.

This is ONLY due to CH existence.”

However, you still haven’t explained why even with CH banning rent control that California is in the worst housing crisis it has ever seen. You haven’t explained conclusively why the pathetic building that has occurred since CH passed. You trying to distract the public from the real problem that the private sector was given freedom to solve. But it failed miserably. You said:

“But the condition #2 has to be met too.”

And unfortunately permitting process and required costs are so burdensome that often the construction does not pencil out (given the rent amounts which could be charged)”

You would think that if the Apartment industry was provided for more than 20 years the unfettered ability to make profit, it would provide them with the skills and resources to efficiently get projects designed and approved. You love to complain regarding the government, but you provide no proof that the proposals made were realistic or viable in the first place.

You use an old mantra that if the government will get out of the way, the private sector will succeed. You haven’t even demonstrated at least ONE specific proposed housing project was prevented by government under NO RATIONAL basis. Without any examples, this to me is just a hearsay argument regarding the public. But 20+ years has proven that wrong. You have to prove that first before making offhand criticism of local governments. You said:

“But TBM thinks that #1 condition has to be removed, so there would be no willing builder and that would somehow solve the problem.”

In the market, as long as there is demand, there will be supply. You keep on making empty threats. You know that the only way that your idea would be successful would be a violation of the Cartwright act if you read this(Web Link :

Prohibited Antitrust Activities under the CA Cartwright Act

The Cartwright Act prohibits combinations of two or more persons’ capital, skill, or acts to restrict trade or commerce. Where the Sherman Act prohibits only “restraints of trade,” the Cartwright Act is more detailed in its list of prohibited actions. These include:

Price Fixing: agreement between competitors to buy or sell products, services, or commodities at a fixed price or rate

Group Boycotting: competitors agreeing to boycott a certain entity

Market Division Scheme: agreement between competitors to divide markets, products, customers or territories amongst themselves

Exclusive Dealings: requiring a buyer or seller to do buy or sell all or most of a certain product from a single supplier

Price Discrimination: similar goods to buyers at different prices

Tying: selling a product or service on the condition that the buyer agrees to also buy a different product or service”

To me, the idea that you actually publically threaten that the industry will “Group Boycotting: competitors agreeing to boycott a certain entity“. In this case the State of California because is not a good argument. In fact, I am surprised you would argue this point at all. You said:

“By the same logic I could argue that if local jurisdictions were not approving building permits in sufficient manner, they are to be blamed for housing shortage and therefore the solution is to STOP issuing there permits at all.”

Again, please provide dome real evidence that local governments are to blame? You repeat a claim with no evidence to back it up. This has been a script used by the industry to try to distract the public from the fact that the industry is the failure. If the industry was in “good faith” it would propose realistic and affordable housing projects. But it CHOOSES if not DEMANDS that they get projects done that are unrealistic and unaffordable. You wonder why there is problems regarding said projects? You said:

”Crazy?”

Crazy is perpetuating a failing situation expecting it will EVENTUALLY solve the problem. Your solution is to not work on making or trying any solution. You have not provided any evidence that CH will solve the problem. You haven’t even provided any evidence that CH is working to limit rent price growth? To me doing the same thing over and over again and EXPECTING somehow you get a different result is the definition of insanity. Isn’t that what you are promoting?

It is mind boggling that the MVV reports eagerly on any bits of news in support of prop 10 passage, bud decides to ignore independent research results like these:

"California’s non-partisan Legislative Analyst’s Office has said that Proposition 10 — the ballot measure that would repeal the Costa-Hawkins Rental Housing Act — could cost local governments up to “tens of millions of dollars per year” in new costs and that the state could lose up to “hundreds of millions of dollars per year” in revenues. The Legislative Analyst’s Office shared those findings in an analysis of Proposition 10 included in an Official Voter Information Guide published this week by the California Secretary of State’s Office."

In response to mike rose you said:

“It is mind boggling that the MVV reports eagerly on any bits of news in support of prop 10 passage, bud decides to ignore independent research results like these:

"California’s non-partisan Legislative Analyst’s Office has said that Proposition 10 — the ballot measure that would repeal the Costa-Hawkins Rental Housing Act — could cost local governments up to “tens of millions of dollars per year” in new costs and that the state could lose up to “hundreds of millions of dollars per year” in revenues. The Legislative Analyst’s Office shared those findings in an analysis of Proposition 10 included in an Official Voter Information Guide published this week by the California Secretary of State’s Office."

I am fully aware of this report. And I ws expecting you to report it. However it does not actually indicate any “economic studies” to back it up. It is simply a 4 page double spaced and narrow margined set of unsubstantiated claims found here (Web Link

It in fact shows no evidence to support anything it wrote. No studies, no data, and no methodology.

This “group” simply is just another interest group that does not disclose what conflicts of interest it may have in its practices. This is required under the American Economist Association Conflict of Interest Disclosure requirements found here (Web Link

It states:

“Submissions to the AEA journals should conform to the AEA disclosure principles which state:

1. Every submitted article should state the sources of financial support for the particular research it describes. If none, that fact should be stated.

2. Each author of a submitted article should identify each interested party from whom he or she has received significant financial support, summing to at least $10,000 in the past three years, in the form of consultant fees, retainers, grants and the like. The disclosure requirement also includes in-kind support, such as providing access to data. If the support in question comes with a non-disclosure obligation, that fact should be stated, along with as much information as the obligation permits. If there are no such sources of funds, that fact should be stated explicitly. An “interested” party is any individual, group, or organization that has a financial, ideological, or political stake related to the article.

3. Each author should disclose any paid or unpaid positions as officer, director, or board member of relevant non-profit organizations or profit-making entities. A “relevant” organization is one whose policy positions, goals, or financial interests relate to the article.

4. The disclosures required above apply to any close relative or partner of any author.

5. Each author must disclose if another party had the right to review the paper prior to its circulation.”

None of which occurred here, in fact this report was funded and distributed by the following groups:

“Paid for by No on Prop 10; Californians for Responsible Housing, a coalition of veterans, seniors, housing providers, social justice groups, taxpayer associations, and labor. “

A political opposition group founded by the California Apartment Association found here (Web Link as well as:

“Committee Major Funding from Essex Property Trust, Inc., and Affiliated Entities, Equity Residential, Prometheus Real Estate Group, Inc. .

Funding details at: http://www.fppc.ca.gov”

Since this was not disclosed by the LAO, it simply does not warrant public validation. The public should be informed when it is being deceived intentionally by those who have a conflict of interest in the matter.

The LAO is historically will be against any initiatives that bypass the legislatures of any governmental group. Because even though it is “bipartisan” regarding “Democrats and Republicans”, the financial interests are simply equally influencing both parties in the legislature.

That’s all

All these hundreds of millions of revenue lost just so TBM can get his free ride.

MY RESPONSE TO THE LAO REPORT PART BY PART

In response to mike rose you said:

“All these hundreds of millions of revenue lost just so TBM can get his free ride.”

First, I like everyone else pay my rent, no free ride. But lets look at your LAO report closely:

Summary of Legislative Analyst’s Estimate of Net State and Local Government Fiscal Impact

POTENTIAL NET REDUCTION in state and local revenues of tens of millions of dollars per year in the long term. Depending on actions by local communities, REVENUE LOSSES COULD BE LESS OR CONSIDERABLY MORE.”

Thus there is NO guarantee that there will be a reduction in revenues. The language clearly estabilishes that the LAO cannot conclussivley prove that. It states:

“Fiscal Impact: POTENTIAL NET REDUCTION IN STATE AND LOCAL REVENUES of tens of millions of dollars per year in the long term. Depending on actions by local communities, revenue losses could be less or considerably more.”

Again, a public disclosure that the LAO cannot conclusively prove this point at all. It states:

“Rental Housing Is Expensive in California. Renters in California typically pay 50 percent more for housing than renters in other states. In some parts of the state, rent costs are more than double the national average. Rent is high in California because the state does not have enough housing for everyone who wants to live here. People who want to live here must compete for housing, which increases rents.”

After 20+ years of Costa Hawkins, which the LAO supports, there is no solution being offered by the LAO. Costa Hawkins is NOT the light at the end of the tunnel, IT IS THE LIGHT OF AN ONCOMING TRAIN. When is the LAO going to provide any solution to the Cost Hawkins mess. It says:

“Several Cities Have Rent Control Laws. Several California cities—including Los Angeles, San Francisco, and San Jose—have laws that limit how much landlords can increase rents for housing from one year to the next. These laws often are called rent control. About one-fifth of Californians live in cities with rent control. Local rent boards administer rent control. These boards are funded through fees on landlords.”

Correct, go on:

“Court Rulings Limit Local Rent Control. Courts have ruled that rent control laws must allow landlords to receive a “fair rate of return.” This means that landlords must be allowed to increase rents enough to receive some profit each year.”

Correct, go on:

“State Law Limits Local Rent Control. A state law, known as the Costa-Hawkins Rental Housing Act (Costa-Hawkins), limits local rent control laws. Costa-Hawkins creates three main limitations. First, rent control cannot apply to any single-family homes. Second, rent control can never apply to any newly built housing completed on or after February 1, 1995. Third, rent control laws cannot tell landlords what they can charge a new renter when first moving in.”

Correct, go on:

“State and Local Government Tax Revenues. Three taxes are the largest sources of tax revenue for the state and local governments in California. The state collects a personal income tax on income—including rent received by landlords—earned within the state. Local governments levy property taxes on property owners based on the value of their property. The state and local governments collect sales taxes on the retail sale of goods.”

Here is where the LAO skips relevant information. These “businesses” have lobbied and got tax credits and rebates built into the tax code to minimize their tax burden. In fact most studies prove that property taxes are the worst form of revenue located here (Web Link

Specifically:

“In the U.S., property tax revenue fell in the U.S. in the 1970s and has been pretty flat since. But its share of GDP is still high compared with the rest of the OECD, possibly because property taxes here are used mainly to fund local governments and schools. Homeowners can thus see a direct link between what their property taxes pay for and the value of their homes. These vigilant "homevoters," as Dartmouth College economist William Fischel has dubbed them, demand high-quality services and are willing to pay for them. But they're never going to favor tax policy aimed at pushing homeowners in expensive places to downsize or replace their houses with apartment buildings. In fact, one of the top priorities of modern homevoters seems to be keeping developers from putting up apartment buildings.”

This is occurring whether Costa Hawkins is repealed or not. Proposition 10 has no impact on this trend. It goes on to say:

“Economic Effects. If communities respond to this measure by expanding their rent control laws it could lead to several economic effects. The most likely effects are:

To avoid rent regulation, some landlords would sell their rental housing to new owners who would live there.”

What proof does the LAO have to make this argument. It is simply an opinion with no scientific basis. It goes on to say:

“The value of rental housing would decline because potential landlords would not want to pay as much for these properties.”

That is called a market correction, and it is way overdue. This will occur even if Costa Hawkins is NOT repealed. It goes on to say:

“Some renters would spend less on rent and some landlords would receive less rental income.”

Yes, that is correct, no doubt. It goes on to say:

“Some renters would move less often.”

What is the scientific proof that this is not a good thing? Again, the opposition wants either a stable customer (which will live in an apartment greater than 10 years) or do they want unstable customers? This argument says they don’t want either. It goes on to say:

“These effects would depend on how many communities pass new laws, how many properties are covered, and how much rents are limited. Voters in some communities have proposed expanding rent control if this measure passes. If many localities enacted strong rent regulation, other economic effects (such as impacts on housing construction) could occur.”

No proof can be provided to substantiate this claim. Most unbiased economists cannot make an argument that will either confirm or reject this theory. So why does the LAO make this claim? It goes on to say:

“Changes in State and Local Revenues. The measure’s economic effects would affect property tax, sales tax, and income tax revenues. The largest and most likely impacts are:

Less Property Taxes Paid by Landlords. A decline in the value of rental properties would, over several years, lead to a decrease in property tax payments made by owners of those properties.”

That is unavoidable once the market bubble is burst and he properties return to the intrinsic real values, and not the inflated ones. So Costa Hawkins has no impact on this issue. It goes on to say:

“More Sales Taxes Paid by Renters. Renters who pay less in rent would use some of their savings to buy taxable goods.”

Well, that appears to state that the LAO would promote giving more money to the private sector owners rather than minimize the economic dependence on the inflated values of the Apartment Industry. Is there anything scientifically wrong with the sales taxes getting more revenues to provide more services? That argument simply doesn’t make any sense. It goes on to say:

“Change in Income Taxes Paid by Landlords. Landlords’ income tax payments would change in several ways. Some landlords would receive less rental income. This would reduce their income tax payments. On the other hand, over time landlords would pay less to buy rental properties. This would reduce expenses they can claim to lower their income tax payments (such as mortgage interest, property taxes, and depreciation). This would increase their income tax payments. The measure’s net effect on income taxes paid by landlords in the long term is not clear.”

Again, when the market correction, which is already starting, goes into full effect, Costa Hawkins will not be even close to the impact this will have. And again, these landlords have all kinds of “tax loopholes” they use to pay vastly lower “real” taxes in comparison to the income taxes paid by the renters. Renters get no tax benefits at all. This was a poor approach to use for the LAO. It goes on to say:

“Overall, the measure likely would reduce state and local revenues in the long term, with the largest effect on property taxes. The amount of revenue loss would depend on many factors, most importantly how communities respond to this measure. If several communities expand moderate rent control to cover most of their rental housing, revenue losses could be in the tens of millions of dollars per year. If few communities make changes, revenue losses would be minor. If many communities pass strong rent control, revenue losses could be in the hundreds of millions of dollars per year.”

Yes, rental rates will go down, and rents paid will decline. But that is the responsibility of the private sector to solve. The fact is that Costa Hawkins has only served 2 purposes. One to split the renter voters up to minimize “collective” market bargaining via “market” regulations. And the other is to perpetuate the inflated unrealistic values promised to investors that are so inflated, that the market correction has been simply delayed. The LAO knows this, but will not discuss it publically. It goes on to say:

“Increased Local Government Costs. If cities or counties create new rent control laws or expand existing ones, local rent boards would face increased administrative and regulatory costs. Depending on local government choices, these costs could range from very little to tens of millions of dollars per year. These costs likely would be paid by fees on owners of rental housing.”

Why should the public have to pay for the failures of the private apartment industry? This criticism may be correct, but the cause of the problem is the private apartment industries strategic approach to inflate property values is costing the state too much.

Please provide a counter explanation based on some scientific basis?

You want "economic studies" now?
Didn't you hear that over 90% of economists ( liberal included) concluded after studying the effects of rent control that it is a disasterous policy with results and destruction equal to " wartime bombing of the cities".

In response to mike rose you said:

“You want "economic studies" now?

Didn't you hear that over 90% of economists ( liberal included) concluded after studying the effects of rent control that it is a disasterous policy with results and destruction equal to " wartime bombing of the cities".”

Please provide studies performed up to the current requirements of the American Economist Association prohibition of conflict of interest?

I will be happy to read them. But from what I can tell, the fact is most of those “90% of economists” have active conflicts of interest, thus they report what is most beneficial to themselves or their close allies. You know this. Why do you continue to bring this false premise up?

Again nothing but distractions to avoid addressing the real problems.

I am providing facts and statistics well known publicly.
You provide BS every time you respond.

In response to mike rose you said:

“I am providing facts and statistics well known publicly.”

Please cite them so that the public can consider it? You surely have noticed that I do the same. Even though it contradicts you, You said:

“You provide BS every time you respond.”

Just please provide proof of inaccuracy or deception? To me you aspire to personally attack rather than discuss independent and validated information. I appreciate that this situation will have a direct financial impact on you. But your reaction seems to indicate significant hostility towards your opposition. Especially give the language you use.

The simple truth is that since 2012 he American Economist Association was forced to reform the practice of the social science of economics. Especially after the file “inside Job” demonstrated the problems with the “conflicts of interest” in the economics profession. On significant portion can be found here (Web Link

So there are many questions that required reform. And so far practically no one has in fact complied with the new rules. Why should we the public trust these studies?

FYI:

A landlord once said to me at an RHC meeting, just enjoy it when your rent is risen $1000. due to the petition filed by my landlord.

I just got good knews, the entire petition was rejected. My rent is not going to go up.

in·suf·fer·a·ble
inˈsəf(ə)rəb(ə)l/Submit
adjective
too extreme to bear; intolerable.
"the heat would be insufferable by July"
synonyms: intolerable, unbearable, unendurable, insupportable, unacceptable, oppressive, overwhelming, overpowering; informaltoo much
"the heat was insufferable"
having or showing unbearable arrogance or conceit.
"an insufferable bully"
synonyms: conceited, arrogant, boastful, cocky, cocksure, full of oneself, self-important, swaggering; More

I think you are lying again TBM,
The simple truth is that you are likely making this story up, like you are making up laws that don't exist.

In response to mike rose you said:

“I think you are lying again TBM,

The simple truth is that you are likely making this story up, like you are making up laws that don't exist.”

Simply put, request a copy of the decision regarding the CSFRA Petition 17180006 - 184 Centre St. Final Decision.

You should stop trying to claim that information that does not support your opinion is “fake news”.

The decision states:

“3. Landlord is Not Entitled to a Vega Adjustment:

A Vega adjustment is unwarranted where [T]he physical condition of the property or any individual [unit], the market conditions that related to the property or any individual [unit], and/or any other relevant evidence" demonstrates "that a recalculation of the Base Year Gross Income ... is unnecessary for the landlord to receive a fair return on investment for the property, fails to ensure fairness, or is otherwise contrary to the purposes of the Act."”

See, the Act, at Regulation 6(G)(3)(d).

a. The Property is old, the Tenants' Units are not newly remodeled, and the level of service and maintenance has decreased since Landlord purchased the Prope1ty.

According to the majority of the evidence, and declarations of the tenants, the Property is over 60 years old, and Tenants' units lack amenities such as air conditioning, central heating, dishwashers. See, Exhibit E, Tenants' Declarations.

Subject Tenants -- according to their testimony, and photographs provided by Landlord -­reside in units that have not been remodeled since they moved in, and which contain worn carpets, aging wall-unit heaters which do not heat most of the apartment and no air conditioning. Tenants testify that since the heaters do not provide effective heating in most of the Affected Units, they are forced to supplement with space heaters in the cold months. The Tenants also testify that the Units on the upper floor are sweltering in the hot months.

Each of the Tenants testifies that the prior owner took pride in the landscaping and grounds and that the building and gardens were very well cared for. The prior owner would deliver new heater filters to tenants every year and she herself often tended to the gardens herself. Tenants further testify that Landlord has hired a "mow and blow" gardener, who does not tend to the planting with expertise and that the gardens are overgrown and unkempt - to the point of blocking ingress and egress on the side of the building. Furthermore, Tenants asse1t that Landlord removed decorative stones at the front of the property and replaced them with bushes which they feel was less attractive and an unnecessary expense. The photographs submitted by Landlord support the Tenants' assertions. See, Exhibit D.

A preponderance of the evidence supports a rebuttal to any presumption of a Vega Adjustment to the Net Operating Income for the Base Year. The market conditions of the property show that the rents as charged adequately reflect the condition of the property and that such an increase is "unnecessary for the landlord to receive a fair return on investment for the property." See, The Act at Regulation 6(G)(3)(d).) As a result of all of these factors, Landlord's request for a Vega adjustment for these units is hereby DENIED.

VIII Conclusions of Law Supporting This Decision

In addition to those sections of the Act cited above, the following also applies to this Petition and Decision:

The CSFRA regulates rent increases as set forth in section 1706:

No Landlord shall increase Rent for a Covered Rental Unit except as authorized by this Article. Rent increases shall be limited to those imposed pursuant to Section 1707 (Annual General Adjustment) and Section 1710( a) (Petition for Upward Adjustment-Fair Rate of Return). A Landlord may set the initial Rent for a new tenancy pursuant to Section 1708 (Initial Rents for New Tenancies).

See, CSFRA § 1706 .

As set forth above, based on the Annual General Adjustment of 3.4 percent and Fair Rate of Return, Landlord's proposed rate increase IS NOT REASONABLE.

l. Fair Rate of Return:

CSFRA Chapter 6 B of the Regulations states:

A Landlord's fair rate of return on investment for a property containing a Covered Rental Unit for the Petition Year is the "Adjusted Net Operating Income." For purposes of this Section (B), the Adjusted Net Operating Income shall equal the Net Operating Income for the Base Year, adjusted by the percentage increase or decrease in the Consumer Price Index between the Base Year and the Petition Year. If the Landlord's actual Net Operating Income for a property in the Petition Year is less than the Adjusted Net Operating Income, then the Landlord shall be entitled to an Upward Adjustment of Rents for that property sufficient to provide a Net Operating Income equal to the Adjusted Net Operating Income.

See, the Act at Art. XVII, Sec. 1700. That same law permitted Landlords to increase rents for existing residents by 3.4% in 2017. This increase accounts for inflation to ensure that landlords earn a fair and reasonable rate of return on their investment by maintaining their net operating income. See, the Act at Regulation 6(A)(3) and 6(B); see also, Palos Verdes Shores Mobile Estates, Ltd. v. City of Los Angeles (1983) 142 Cal.App.3d 362,371.

The California Supreme Court has consistently held that any increase in rents sought by the landlord must be balanced against the tenants' interests in keeping their homes affordable:

“[T]he rate regulator is balancing the interests of investors, i.e. landlords, with the interests of consumers, i.e. [tenants], in order to achieve a rent level that will on the one hand maintain the affordability of the [property J and on the other hand allow the landlord to continue to operate successfully.”

See, Galland v. Clovis (200 I) 24 Cal.4th I 003, I 026. The Supreme Court has further held that if investment returns for landlords are merely "DISAPPOINTING" without being CONFISCATORY,

“[T]he solution is not constitutional litigation but, as with nonregulated investments, the liquidation of the investments and the transfer of capital to more lucrative enterprises.”

Ibid. Thus, as long as rent levels permit a growth in net operating income, the constitutional minimum for a "fair rate of return" has been met. See, Fisher v. City of Berkeley (1984) 37 Cal.3d 645, 680-683.

Decision

Based on the above findings of fact and conclusions of law, it is hereby decided that, The Petition filed by Landlord is hereby denied as follows:

1. Landlord's request for a Vega adjustment for these units is hereby DENIED.

2. The Petition is DENIED in that Landlord is hereby denied an upward adjustment of rent for any unit;

3. The Petition is DENIED as to the request to apportion and charge any awarded upward adjustment of rent to only the Affected Units; and

4. No decision is hereby rendered regarding the constitutionality of the Act, and no decision is hereby rendered as to the Tenants' assertion that several po1tions of the regulations exceed the statutory authority granted by the CSFRA. These assertions were disallowed as not within the jurisdiction of the Hearing Officer, the Petition, or this Hearing.

Please understand that if you attempt to be deceptive regarding your comments, it can be responded by those with evidence that can disprove your opinion.

This is what the Vega vs City of West Hollywood court decision (on which Vega adjustment is based) reads:

....."We recognize that courts have specifically upheld the use of a fair return standard such as maintenance of a net operating income formula similar to [223 Cal. App. 3d 1352] the one used in the City's Ordinance and have also rejected attacks on the propriety of an essentially investment-based standard. (See Fisher v. City of Berkeley (1984) 37 Cal. 3d 644, 680- 683 [209 Cal. Rptr. 682, 693 P.2d 261]; Baker v. City of Santa Monica (1986) 181 Cal. App. 3d 972, 988 [226 Cal. Rptr. 755]; Cotati Alliance for Better Housing v. City of Cotati (1983) 148 Cal. App. 3d 280, 286-290 [195 Cal. Rptr. 825].) The City's Ordinance properly seeks to maintain "the same rate of return, with adjustments for inflation, that [property owners] experienced prior to the enactment of rent control." (Palos Verdes Shores Mobile Estates, Ltd. v. City of Los Angeles (1983) 142 Cal. App. 3d 362, 371 [190 Cal. Rptr. 866].) Nonetheless, a property owner MUST be permitted, pursuant to the principles discussed in Birkenfeld v. City of Berkeley, supra, 17 Cal. 3d 129, to START RENT CALCULATIONS WITH A BASE DATE RENT SIMILAR TO OTHER COMPARABLE PROPERTIES".....

I do not see in this denial decision any reference to other comparable properties.
Only to the condition of the property (as described by tenants) and subjective decision of the hearing officer based on the perceived condition of the property that the current rent is sufficient.
Where is the analysis of comparable base year rents? This is what Vega adjustment is about.
I think this decision should be appealed to the rent board, otherwise no one wil ever be eligible for Vega adjustment, because tenants are always going to complain about something (like in this case they did not like rocks being replaced by bushes).

In response to mike rose you said:

“This is what the Vega vs City of West Hollywood court decision (on which Vega adjustment is based) reads:

....."We recognize that courts have specifically upheld the use of a fair return standard such as maintenance of a net operating income formula similar to [223 Cal. App. 3d 1352] the one used in the City's Ordinance and have also rejected attacks on the propriety of an essentially investment-based standard. (See Fisher v. City of Berkeley (1984) 37 Cal. 3d 644, 680- 683 [209 Cal. Rptr. 682, 693 P.2d 261]; Baker v. City of Santa Monica (1986) 181 Cal. App. 3d 972, 988 [226 Cal. Rptr. 755]; Cotati Alliance for Better Housing v. City of Cotati (1983) 148 Cal. App. 3d 280, 286-290 [195 Cal. Rptr. 825].) The City's Ordinance properly seeks to maintain "the same rate of return, with adjustments for inflation, that [property owners] experienced prior to the enactment of rent control." (Palos Verdes Shores Mobile Estates, Ltd. v. City of Los Angeles (1983) 142 Cal. App. 3d 362, 371 [190 Cal. Rptr. 866].) Nonetheless, a property owner MUST be permitted, pursuant to the principles discussed in Birkenfeld v. City of Berkeley, supra, 17 Cal. 3d 129, to START RENT CALCULATIONS WITH A BASE DATE RENT SIMILAR TO OTHER COMPARABLE PROPERTIES".....”

In response to that here is further information:

“A preponderance of the evidence supports a rebuttal to any presumption of a Vega Adjustment to the Net Operating Income for the Base Year. THE MARKET CONDITIONS OF THE PROPERTY SHOW THAT THE RENTS AS CHARGED ADEQUATELY REFLECT THE CONDITION OF THE PROPERTY AND THAT SUCH AN INCREASE IS "UNNECESSARY FOR THE LANDLORD TO RECEIVE A FAIR RETURN ON INVESTMENT FOR THE PROPERTY." See, The Act at Regulation 6(G)(3)(d).) As a result of all of these factors, Landlord's request for a Vega adjustment for these units is hereby denied.”

If I had cut and pasted the ENTIRE decision you would have complained. Thus your statement:

“I do not see in this denial decision any reference to other comparable properties.”

It went on to say:

“Landlord Is Not Entitled To An Individual Upward Rent Adjustment In Rent.

Landlord has owned this property since February 2016. Evidence shows that the units subject to this Petition are, FOR THE MOST PART, OLD AND NOT REMODELED (see above). Inspections are current. Based on proper evidence and calculations under the Act, LANDLORD HAS FAILED TO PROVE THAT IT IS ENTITLED TO A RENT INCREASE; IN FACT, EVIDENCE SHOWS THE PETITION YEAR NOI IS POSITIVE $ 35,140.50.

a.Adjusted Gross Income in the Base and Petition Years:

The Evidence and testimony shows proper Adjusted Gross Income of $190,311 (rental income plus laundry income) in the Base Year and$ 253,164.00 in the Petition Year. THE ACT REQUIRES GROSS INCOME TO BE CALCULATED USING RENTS THAT ARE "LAWFULLY COLLECTIBLE," NOT SIMPLY RENTS THAT WERE ACTUALLY COLLECTED. SEE, THE ACT AT REGULATION 6(D)(L). SEE, EXHIBIT BAT WORKSHEET 2.”

You went on to say:

“Only to the condition of the property (as described by tenants) and subjective decision of the hearing officer based on the perceived condition of the property that the current rent is sufficient.”

Please refer to the following:

“Since the EVIDENCE SHOWS THAT LANDLORD PERFORMS LESS MANAGEMENT THAN ITS PREDECESSORS, Management Expenses are hereby capped at 6% of Gross Income or$ 11,419.00 in the Base Year and $ 15,190.00 in the Petition Year. This 6% has been recalculated based upon the actual 2015 income for the Base Year of $190,311, and based upon the lawfully collectible rent in 2017 for the Petition Year. See,§ 5(a) above.”

Your question you asked:

“Where is the analysis of comparable base year rents? This is what Vega adjustment is about.”

The answer is that EVIDENCE was required to be presented by the landlord. Because it was the landlord making the petition in this case. The landlord did NOT provide any analysis to substantiate the VEGA adjustment. IT IS NOT REQUIRED THAT THE TENANTS PROVIDE ANY REBUTTAL REGARDING THE LACK OF PRESENTED EVIDENCE. You simply have to understand that the landlord could not make such an argument, because it could not provide said analysis that would support the VEGA adjustment. Please understand you are making assumptions regarding the case, and not reading the case decision. A poor approach. You said:

“I think this decision should be appealed to the rent board, otherwise no one will ever be eligible for Vega adjustment, because tenants are always going to complain about something (like in this case they did not like rocks being replaced by bushes).”

Again, if you do not even read the case decision, you simply are assuming a great deal with no evidence to back it up. I simply have not copied the entire decision because it was 10 pages long.

It would be wise to not make accusations without doing homework first to determine whether your claims may in fact be misdirected or worse.

The Vega court decision DOES NOT refer to Net Operating Income for a base year adjustments.
It refers to RENTS only.
It clearly says the owner MUST BE PERMITTED to start rent calculations with the base rent similar to other comparable properties, period.
The court decision does not require the property to be remodeled, no air conditioning, dishwashers, rocks instead of bushes or other luxuries have to be provided.
Assumption is the property has to be only safe and habitable.
So tying the Vega increase to the amenities is not in my opinion proper and the hearing officer decision should be appealed immediately.

In response to mike rose you said:

“The Vega court decision DOES NOT refer to Net Operating Income for a base year adjustments.”

The Vega court decision stated:

“OPINION

BOREN, J.

The issue in this case is how, under a particular municipal rent control ordinance and peculiar circumstances, rental rates must be determined. The property owner here, for unusual reasons, had suppressed her rental rates significantly below the market for comparable units during the 1983 base year of the Rent Stabilization Ordinance (Ordinance) of the City of West Hollywood (City). THE CITY CONTENDS THAT PURSUANT TO THE ORDINANCE, OTHER RENTS CHARGED FOR COMPARABLE UNITS DURING THE BASE YEAR MUST BE CONSIDERED ONLY AFTER THE PROPERTY OWNER SHOWS HER NET OPERATING EXPENSES DO NOT PROVIDE A FAIR AND REASONABLE RETURN. On the other hand, the property owner urges that AFTER SHE REBUTS THE PRESUMPTION OF A FAIR BASE YEAR NET OPERATING INCOME BY ESTABLISHING PECULIAR CIRCUMSTANCES DURING THE BASE YEAR, THE BASE YEAR RENT MAY BE ADJUSTED CONSISTENT WITH PREVAILING RENTS FOR COMPARABLE UNITS DURING THE BASE YEAR. We agree with the latter position and affirm with directions to the Rent Stabilization Commission.”

The case went on to say:

“WE RECOGNIZE THAT COURTS HAVE SPECIFICALLY UPHELD THE USE OF A FAIR RETURN STANDARD SUCH AS MAINTENANCE OF A NET OPERATING INCOME FORMULA SIMILAR TO [223 CAL. APP. 3D 1352] THE ONE USED IN THE CITY'S ORDINANCE AND HAVE ALSO REJECTED ATTACKS ON THE PROPRIETY OF AN ESSENTIALLY INVESTMENT-BASED STANDARD. (See Fisher v. City of Berkeley (1984) 37 Cal. 3d 644, 680- 683 [209 Cal. Rptr. 682, 693 P.2d 261]; Baker v. City of Santa Monica (1986) 181 Cal. App. 3d 972, 988 [226 Cal. Rptr. 755]; Cotati Alliance for Better Housing v. City of Cotati (1983) 148 Cal. App. 3d 280, 286-290 [195 Cal. Rptr. 825].) THE CITY'S ORDINANCE PROPERLY SEEKS TO MAINTAIN "THE SAME RATE OF RETURN, WITH ADJUSTMENTS FOR INFLATION, THAT [PROPERTY OWNERS] EXPERIENCED PRIOR TO THE ENACTMENT OF RENT CONTROL." (Palos Verdes Shores Mobile Estates, Ltd. v. City of Los Angeles (1983) 142 Cal. App. 3d 362, 371 [190 Cal. Rptr. 866].) Nonetheless, a property owner must be permitted, pursuant to the principles discussed in Birkenfeld v. City of Berkeley, supra, 17 Cal. 3d 129, to start rent calculations with a base date rent similar to other comparable properties.

[2] As to the rent calculations to be determined in the present case, a court "may compel [an] agency to act, BUT IT MAY NOT SUBSTITUTE ITS DISCRETION FOR THE DISCRETION PROPERLY VESTED IN THE ADMINISTRATIVE AGENCY ... 'COURTS SHOULD LET ADMINISTRATIVE BOARDS AND OFFICERS WORK OUT THEIR PROBLEMS WITH AS LITTLE JUDICIAL INTERFERENCE AS POSSIBLE ....' " (Lindell Co. v. Board of Permit Appeals (1943) 23 Cal. 2d 303, 315 [144 P.2d 4]; see Faulkner v. Cal. Toll Bridge Authority (1953) 40 Cal. 2d 317, 326 [253 P.2d 659]; Carlton Santee Corp. v. Padre Dam Mun. Water Dist. (1981) 120 Cal. App. 3d 14, 28 [174 Cal. Rptr. 413].) [1b] HERE, HOWEVER, THE COMMISSION HAS ALREADY EXERCISED ITS DISCRETION AS TO THE DETERMINATION WE DEEM DISPOSITIVE.

The Commission determined, in pertinent part, that the evidence presented by the landlord's appraiser reflected "comparable rents" which "were presumed to be fair and reasonable." The appraiser's documentation was unimpeached and, indeed, deemed impressive by several members of the Commission. The landlord also supplied the Commission with all the information required by the Ordinance to adjust rents under the rent adjustment formula. ACCORDINGLY, THE COMMISSION'S DISCRETION WOULD NOT BE INAPPROPRIATELY LIMITED BY OUR DIRECTIVE THAT IT SET THE LANDLORD'S BASE DATE RENTS CONSISTENT WITH THE APPRAISER'S EVIDENCE OF RENTS FOR COMPARABLE UNITS AND THEN APPLY THE ORDINANCE'S MAINTENANCE OF NET OPERATING INCOME FORMULA TO ESTABLISH THE CURRENT MAXIMUM ALLOWABLE RENTS.fn. 8”

So as to your statement:

“It refers to RENTS only.”

That clearly is not correct according to the above. Why is it that when presented with contrary information, people resort to making unsubstantiated claims? The landlord did not have any affidavit to support that the rents basis he argued was comparable with rents of similar properties in Mountain View. Probably because it would have proven that his expectations were not “REASONABLE”. You went on to say

“It clearly says the owner MUST BE PERMITTED to start rent calculations with the base rent similar to other comparable properties, period.”

That is correct, but there is no evidence to prove that the Hearing Officer in this case did not do so. In fact she did if you read this:

“The operative Petition in this matter is the Amended Petition. All references to the "Petition" from this point forward shall be to the Amended Petition.

2. Base Year for Income:

Base Year Income shall be that from 2015, since Landlord testified that the only income was from rent (See, Original Petition), and provided actual income numbers therein. Further, Landlord testified at the hearing that it had actual rent numbers, as they had been available from the Seller of the Property. The Act defines the Base Year as 2015. See, the Act at Regulation 6(C)(l). No extenuating circumstances exist to use another time period for income.

Operative Base Year for Expenses:

The operative Base Year for Expenses shall be 2016 as ordered prior to the hearing in this matter.”

You obviously like to ignore the text you wrote to say “base rent similar to other comparable properties, period.” But that would discount the “average” rent in Mountain View given that most units in Mountain View have far better accommodations than this property. Why do you like to make arguments that do not support your claims? You went on to say:

“The court decision does not require the property to be remodeled, no air conditioning, dishwashers, rocks instead of bushes or other luxuries have to be provided.”

However, the lack thereof would have to be taken into account regarding the VEGA case because:

Discussion

II. Interpretation and Application of Section 6411 of the Ordinance

Most significantly, the critical questions are not whether the base date rents establish a "fair and reasonable" return and whether the base date rents, even if low, are within "a range of rents which can be charged." (San Marcos Mobilehome Park Owners' Assn. v. City of San Marcos (1987) 192 Cal. App. 3d 1492, 1502 [238 Cal. Rptr. 290].) RATHER, THE QUESTION IS WHETHER THE BASE DATE RENTS CAN "REASONABLY BE DEEMED TO REFLECT GENERAL MARKET CONDITIONS." (Birkenfeld v. City of Berkeley, supra, 17 Cal.3d at p. 169.) After base date rents are established which reflect general market conditions, then the Commission should apply and maintain the net operating income formula of the Ordinance. The rents which are then established must provide the landlord with the requisite "just and reasonable return." (See Ord., §§ 6411(C)(1)(f) and 6415, as amended.)”

“To the extent that the county's rent control system in effect on the base rent date regulated the rents in Simonson's neighborhood, it could reasonably be deemed to reflect market conditions. HOWEVER, THE BASE DATE RENTS SHOULD BE SIMILAR FOR COMPARABLE PROPERTIES, WHETHER THE CALCULATION IS DONE BY THE LANDLORD'S AGENT USING THE COUNTY'S RENT CONTROL LAW OR BY THE CITY USING THE SUBSEQUENTLY ENACTED ORDINANCE. “

In this matter, the City of Mountain View must take into account “COMPARABLE PROPERTIES”. Thus, just assuming the “AVERAGE” rent of Mountain View would be the basis of a lawful rent would not apply. You should have read this informationand understood it before making the arguments you are making here. It would appear that you selectively omit the record when it does not suit you. It also said:

“Figures which were objectively fair and reasonable for comparable units did exist. The landlord's real estate appraisal firm presented extensive data establishing the rents for other units in the area and the comparable nature of those units to the landlord's units. IN FACT, SEVERAL COMMISSION MEMBERS COMMENTED ON THE APPRAISER'S "VERY FINE PIECE OF DOCUMENTATION AND RESEARCH." As the Commission concluded, "cOMPARABLE RENTS WERE INTRODUCED, AND THOSE RENTS WERE PRESUMED TO BE FAIR AND REASONABLE."

Thus the hearing officer can “discount” the “average market rents” based on the fact that the property does not have the same accommodations that the average units in Mountain View have. The higher average rents that the landlord petitioned for were for units with substantially better amenities and resources. The VEGA case takes that into account whether or not you want to admit it. The opposition of CSFRA is notorious for omitting information that does not support its arguments. You went on to say:

“Assumption is the property has to be only safe and habitable.”

Not after what I just pointed out, and you know it. You said:

“So tying the Vega increase to the amenities is not in my opinion proper and the hearing officer decision should be appealed immediately.”

Given that the VEGA case stated: “RATHER, THE QUESTION IS WHETHER THE BASE DATE RENTS CAN "REASONABLY BE DEEMED TO REFLECT GENERAL MARKET CONDITIONS.” And that those factors are critical regarding the actual “MARKET” base for the rent, you seem to be under a false impression. It would appear on its face that you’re trying to make a false assumption. Why do you continuously make claims that can be easily disproven?

You are confusing NOI adjustment with Vega adjustments.
These are distinctly separate.
The essence of tis separation is that Vega adjustment is NOT subject to NOI formula, but hearing officer clearly used it here. He cited NOI in the base year and arbitrarly declared it to be sufficient.
The NOI in the base year is IRRELEVANT for the purpose of Vega adjustment.
Only RENT amount is, as you acknowledged.
Otherwise the Vega adjustment would be without purpose.
I was under impression that HUD rent amounts in SC county for 2015 were the determining factor for comparable rents, but I may be wrong on this.
I assume there must be some uniform regulation to determine comparable rents for base year.

Even if the owner is required to provide comps by getting appraisal, the regulation should state so.
I am sure you can enlighten us how does the board determine comparable base year rents.

In response to mike rose you said:

“You are confusing NOI adjustment with Vega adjustments.”

On what legal basis do you substantiate this, please provide specific case law decisions? Otherwise, we are simply plying in your “sandbox”. The fact is you are not a judge, nor an attorney. I am not either. But at least I “cut and paste” the cases accurately without omission. You said:

“These are distinctly separate.”

Again, find a case that specifically states this and I will admit yo’re correct. But so far you make a lot of conflated arguments. You said:

“The essence of tis separation is that Vega adjustment is NOT subject to NOI formula, but hearing officer clearly used it here. He cited NOI in the base year and arbitrarly declared it to be sufficient.”

Please prove it was “arbitrary”? I know you do not agree with it. But again either of us are judges or attorneys. So you better find a case that is on this point to justify your claim. All I ask is for proof? You said:

“The NOI in the base year is IRRELEVANT for the purpose of Vega adjustment.”

Please prove it is irrelevant for the purpose of the VEGA adjustment? Because the VEGA case does not state that in the case decision. You said:

“Only RENT amount is, as you acknowledged.”

I acknowledged that “rents based on comparable properties or apartments are valid”. You are triying to put words into my mouth. You said:

“Otherwise the Vega adjustment would be without purpose.”


The VEGA adjustment has purpose, but simply is not as “BROADBAND” as those who want to use it works. The CAA and its advocates made a lot of claims regarding so many issues including this one that go way outside the scope of the case. You said:

“I was under impression that HUD rent amounts in SC county for 2015 were the determining factor for comparable rents, but I may be wrong on this.”

You have some good information there, but incomplete.

With regards to say the VEGA adjustment, the entire building investment is reviewed by the Hearing Officer to determine whether the rents warrant a VEGA adjustment. That is correct.

But if the landlord seeks individual rent adjustments based on rents being too low, the HUD FMR is used as a benchmark. But it is not absolute because that is an calculated figure. From what I understand, they only measure 2 bedroom apartments, and calculate the average and multiply that by .8 resulting in a 40 percentile average. This measure does not take into account “comparable properties”. The petition process allows for the tenants to require “comparable units” analysis in order to prevent the “skewed” premium or luxury apartments from distorting the real values of their own units. You said:

“I assume there must be some uniform regulation to determine comparable rents for base year.”

That has been defined by the state courts in order to prevent unequal practices regarding the various cities of California. That happened because property owners contested decisions and the courts were called in to make the decisions. That was a potential mistake on the part of the property owners. You said:

“Even if the owner is required to provide comps by getting appraisal, the regulation should state so.”

NO, that was preempted by the VEGA decision, even if the “regulations” fail to discuss it, the courts have already determined the conditions we are talking about. The City cannot deviate from the courts case laws. So it really doesn’t matter if the “regulations” failed to describe this set of criteria. You said:

“I am sure you can enlighten us how does the board determine comparable base year rents.”

That is the determination of the RHC and the Hearing Officer. I can only observe that there was significant consideration performed by the Hearing Officer given that more than 200 pages of evidence was associated with the petition. You have not proven that there was any abuse of discretion or arbitrary or capricious actions yet. The appeals process will have to establish that has occurred prior to any overruling of the Hearing Officer.

If there were no comparable rents for the base year considered by the hearing officer, then it wasn't Vega adjustment.
You did not provide any proof that the comparable rents were considered.
Stop misleading people here.

If only net operating income and condition of property were considered this was simply Net Operating Income based fair return adjustment hearing.
Please, provide proof that comparable rents for base year were even considered, as required by Vega court decision (which said that landlords MUST be allowed to start rent calculations with a base rent similar to other comparable properties).
I can't emphasize the word MUST enough, because it does not give the rent board any discretion in that matter.

If these rents were considered by the hearing officer and determined to be lower than your landlord's then its ok.
But if they werent considered at all, the hearing officer's denial is a capricious one and should be immediately appealed to the board with excellent chances of reversal.

In response to mike rose you said:

“If there were no comparable rents for the base year considered by the hearing officer, then it wasn't Vega adjustment.”

There were, you just don’t have the documentation. You cannot make that claim without proof there wasn’t. Please provide proof yourself? You said:

“You did not provide any proof that the comparable rents were considered.”

The Hearing Officer had the submissions filed by our representatives. That information contained the “Comparable Units”. Enough said. You said:

“Stop misleading people here.”

That is your only argument you ever produce in your opposition. When are you going to understand that claiming someone is “misleading” is not evidence or proof in the contrary. You must do better than that. You said:

“If only net operating income and condition of property were considered this was simply Net Operating Income based fair return adjustment hearing.”

You have no proof of that, if you read the final decision completely you would know that. But you simply assume that anything contrary to your opinion must be unfair or arbitrary. You said:

“Please, provide proof that comparable rents for base year were even considered, as required by Vega court decision (which said that landlords MUST be allowed to start rent calculations with a base rent similar to other comparable properties).”

My legal team provided that evidence. The Hearing Officer made her decision based on their legal affidavit and evidence. I need not subject myself to this requirement given what you claim is not even substantiated by any legal precedence or evidence itself. Sorry. You said:

“I can't emphasize the word MUST enough, because it does not give the rent board any discretion in that matter.”

Please provide some proof other than your opinion to that effect. And mind you, if you try to present incomplete information or misleading information, I will disclose it. You just want to distract the public. You said:

“If these rents were considered by the hearing officer and determined to be lower than your landlord's then its ok.”

That is exactly what the Hearing Officer considered. The Hearing Officer made the decision. You said:

“But if they werent considered at all, the hearing officer's denial is a capricious one and should be immediately appealed to the board with excellent chances of reversal.”

Again you go off making assumptions and claims without any substantiating information. Your approach is to grab anything you can throw at the wall and hope something sticks. Doing so blindly just demonstrates what can be observed as desperation. The Due Process of Law was followed, and you have no evidence to support your allegations in this matter. But you are entitled to your opinion.

Prove what you have said.
You are the one who claims to have evidence.
But you won't, because you don't have it.
Otherwise it is just empty BS talk on your part.

In response to mike rose you said:

“Prove what you have said.”

I have provided the public ample documentation. Let’s point out the process here. The Landlords have the burden of the preponderance of evidence. The facts are I have given the public far more evidence than you have ever produced. So at this time you need to put it up. You said:

“You are the one who claims to have evidence.”

The evidence is in the City Hall. I do not need to produce anything. You go ahead and get the research done. You have the burden of proof here. You said:

“But you won't, because you don't have it.”

MY Attorney’s proved my case. You just can’t stand it. You said:

“Otherwise it is just empty BS talk on your part.”

All you can do is criticize the opposition, but you cannot constructively contribute to the public conversation. All you can do is use profanity and lash out. I will only correct your misleading statements from now on. You have no intention to be constructive at all.

Will Costa Hawkins even matter?

It appears that the CAA and the CAR are going to claim Costa Hawkins repeal is the cause of the next bubble burst. But that simply does not make sense if you read (Web Link

There's trouble ahead in the global housing market

Adam Taggart, Peak Prosperity Jul. 17, 2018, 6:00 PM REUTERS/Mark Blinch

Our good friend John Rubino over at DollarCollapse.com just released an analysis titled US Housing Bubble Enters Stage Two: Suddenly Motivated Sellers .

He reminds us that housing bubbles follow a predictable progression:

Stage One: Mania -- Prices rise at an accelerating rate as factors like excess central bank liquidity/LOOSE CREDIT/HOT FOREIGN MONEY DRIVE A VIRTUOUS BIDDING CYCLE WELL ABOVE SUSTAINABLY AFFORDABLE LEVELS.”

That his happened especially here in Mountain View, the story shows an illustration that the California market outpaced the real market as high as 260 Percentage Points in the 40 year period of the global market. Economists are clearly indicating that there was no market basis for this manic market in this research. It goes on to say:

“Stage Two: Peak -- Increasingly jittery owners ATTEMPT TO SELL OUT BEFORE THE PARTY ENDS. Supply jumps as prices stagnate.

Specifically:

“Stage Two’s deluge of supply sets the table for US housing bubble Stage Three by soaking up the remaining demand and changing the tenor of the market. DEALS GET DONE AT THE ASKING PRICE INSTEAD OF WAY ABOVE, THEN AT A LITTLE BELOW, THEN A LOT BELOW. INSTEAD OF BEING SNAPPED UP THE DAY THEY’RE LISTED, HOUSES BEGIN TO LANGUISH ON THE MARKET FOR WEEKS, THEN MONTHS. Would-be sellers, who have already mentally cashed their monster peak-bubble-price checks, start to panic. They cut their asking prices preemptively, trying to get ahead of the decline, which causes “comps” to plunge, forcing subsequent sellers to cut even further.

SALES VOLUMES CONTRACT, MORTGAGE BANKERS AND REALTORS GET LAID OFF. Then the last year’s (in retrospect) really crappy mortgages start defaulting, the mortgage-backed bonds that contain their paper plunge in price, et voila, we’re back in 2008.”

That is the threat that many are using to fight the Costa Hawkins Repeal. But it is going to happen anyway. Yes, there is going to be a severe loss of wealth because of poor decisions in the various areas of the market. The market is already reached this point and many of the “landlords” are already selling out now. So why should it matter whether Costa Hawkins is repealed. It also says:

“Stage Three: Bust -- As inventory builds, sellers start having to lower prices. This begins a vicious cycle: BUYERS GO ON STRIKE NOT WANTING TO CATCH A FALLING KNIFE, CAUSING SELLERS TO DROP PRICES FURTHER.”

Rubino cites recent statistics that may indicate the US national housing market is finally entering Stage Two after a rip-roaring decade of recovery since the bursting of the 2007 housing bubble: 1)the supply of homes for sale during the "all important" spring market rose at 3x last year's rate, 2) 30 of America's 100 largest cities now have more inventory than they did a year ago, and, 3) mortage applications for new homes dropped 9% YoY

Taken together, these suggest that residential housing supply is increasing as sales slow, exactly what you'd expect to see in the transition from Stage One to Stage Two.

If that's indeed what's happening, Rubino warns the following comes next.

The Global Housing Bubble

Housing, as they accurately say, is local. Conditions differ from region to region, making generalizations of the overall market difficult.

That said, the tsunami of $trillions printed by the world's central banking cartel since 2008 clearly found its way into the housing market.

THE WORLD REAL ESTATE MARKET IS HUGE, OVER $200 TRILLION. THAT DWARFS THE GLOBAL DEBT AND EQUITY MARKETS. SO IT'S NO SURPRISE THE CENTRAL AUTHORITIES DID ALL THEY COULD TO REVERSE THE LOSSES THE GFC CREATED FOR PROPERTY OWNERS.

As a result, many of the most popular locations to live are now clearly in bubble territory when it comes to home prices:”

The free fall regarding the market bubble burst and correction will occur. There is good evidence that Costa Hawkins has no relationship to this. The CAA and CAR simply deny that this is the real threat to the market NOT COSTA HAWKINS REPEAL. The story also states:

“The chart above displays the most bubblicious major cities around the world in red. But it's important to note that the merely 'overvalued' markets denoted in yellow, and even some of the green 'fair-valued' ones, are still wildly-unaffordable for the average resident.

For example, in "yellow" San Francisco, where the median home now costs $1.6 million, PRICES ARE WELL-ABOVE THE EXCESSES SEEN DURING THE PREVIOUS HOUSING BUBBLE:”

That his happened especially here in Mountain View, the story shows an illustration that the California market outpaced the real market as high as 260 Percentage Points in the 40 year period of the global market. Economists are clearly indicating that there was no market basis for this manic market in this research. It goes on to say:

Proof that we never learned from the 2007-8 financial warning that became the Great Recession. It goes on to say:

“Signs Galore Of Topping Markets

At the end of a speculative bubble, IT'S THE ASSETS THAT ARE MOST OVERVALUED THAT CORRECT FIRST AND CORRECT HARDEST.

So we would expect that as the highest-priced real estate markets fare from here, the general real estate market will follow.

When we take a closer look at what's currently going on with the red-hot real estate markets noted in the chart above, we indeed see evidence supportive of Rubino's claim that the decade-long Stage One mania may now be ending.

Here's a spate of recent headlines about these cities:

San Francisco : After hitting a record price high in January, the city has seen a rare spring decline in prices, while rents across the SF Bay Area are starting to "cool off"

Sure looks like Rubino's predicted Stage Two symptoms of rising supply and stagnating prices.

As mentioned, I live in northern California, quite close to Santa Rosa.

Things here aren't as nuts as they are in San Franscico; but it's still a moderately-affluent region with lots of second homes. It's one of the semi-frothy areas I'd expect to see cooling off in first should there be a downwards turn in macroeconomic conditions.

Located less than an hour north of San Francisco, residential housing prices here have roughly increased 2x over the past six years as the Bay Area has boomed. Supply has been in chronic shortage, exacerbated by the loss of thousands of structures burned during last October's destructive Tubbs fire.

But recently, for the first time in many years, realtors here are beginning to talk of a softening they're seeing in the local housing market.

MEDIAN SALE PRICES DROPPED FROM MAY TO JUNE, WHICH IS COUNTER TO PREVIOUS YEARS. AND SEVERAL TOWNS ARE SEEING YEAR-OVER-YEAR DECLINES IN MEDIAN PRICE -- SOMETHING UNHEARD OF OVER THE PAST 7 YEARS.

Meanwhile, the days-on-market ratio for properties is beginning to creep up.

OF THE GREATEST CONCERN TO THE REALTORS IN MY AREA: BIDDING WARS ARE NO LONGER HAPPENING. HOUSES ARE SELLING EITHER AT OR BELOW ASKING PRICES NOW. THAT'S A *BIG* DEVELOPMENT IN A MARKET WHERE HOUSES HAVE ROUTINELY SOLD FOR $50-100K+ ABOVE THE LISTING PRICE.

In a similar vein, I'm hearing evidence of the softening rents down in San Franscico and the East Bay (Oakland/Berkeley). Wolf Richter has done a good job chronicalling the substantial volume of newly-constructed units that have recently hit the market threatening to depress rents, AND I'VE HEARD FROM A MULTI-FAMILY UNIT OWNER DOWN THERE HOW LANDLORDS IN THE AREA ARE NOW FINDING THEIR RENTS ~$500 TOO HIGH FOR THE MARKET TO BEAR.

This is all early and anecdotal data. It's too little at this point to claim definitively that my local housing market has entered Stage Two.

But I'm curious to hear from other PeakProsperity.com readers. What are you observing in your local markets? Are you seeing similar signs of concern?”

So please do not attempt to claim that Costa Hawkins did the Apartment Industry any favors, it just worked so well that the market inflated itself into a self inflicted gunshot to the foot.

For 30 years people have been saying the California market is going to bust. And it hasn’t. Too many people want to live here, it will just keep going up and up.

But keep on believing your theories if you want. That’s all your rhetoric is, just theory. Keep on drinking that kookaid BM!

In response to mvresident2003 you said:

“For 30 years people have been saying the California market is going to bust. And it hasn’t. Too many people want to live here, it will just keep going up and up. “

My issue wasn’t specifically the bubble, it was the fact that the CAA and CAR are trying to claim that when the values fall, it will be because the voters voted to repeal Costa Hawkins. You didn’t understand the real issue. The fact is that if the market does crash after the election, Costa Hawkins is not the cause of it. That’s all. You said:

“But keep on believing your theories if you want. That’s all your rhetoric is, just theory. Keep on drinking that kookaid BM!”

Again, let’s not get personal. The facts are you haven’t provided any evidence to the contrary, YET. I gave you my source, it is not MY theory it comes from (Web Link

I strive to never bring up anything I cannot substantiate. I strive to use sound research. I am not perfect. So if you have any argument with my information, please address the information and address how it must be discredited? But not myself. My information is not my work.

TBM,
Stop requiring others to provide evidence for obvious.
When I asked you to provide evidence for your particular case above, you refused.
BTW, I also think the RE values will collapse if CH is repealed. I have heard many landlors of SFD and condos are waiting for the results of election and keeping their units vacant. Once the CH is repealed they plan to put them for sale.
This will cause a flood of new property on the market and force chain reaction thruout the state resulting in significant price drop for real estate.
So homeowners should be aware on these unintended consequences and vote accordingly.
Additionally with the RE dropping in value, state will lose hundreds of millions in lost taxes, and cities tens of millions ( see posts above RE bipartisan legislative office research).
This in turn force cuts in police, educations and other important programs and taxes would have to be increased.
This is not my opinion it is the State Legislature opinion.
Even Newsom knows these dire consequences and is opposing the repeal.
But the bright sid is that TBM who is not capable of providing for his own housing will get a free ride on the backs of everybody else.

In response to mike rose you said:

“Stop requiring others to provide evidence for obvious.”

One cannot be a hypocrite, especially when you stated:

“When I asked you to provide evidence for your particular case above, you refused.”

My answer was, MY EVIDENCE IS AT CITY HALL. In fact that’s all that counts given my landlord did not provide a preponderance of evidence to support his petition. You can stop playing the same record. You said:

“BTW, I also think the RE values will collapse if CH is repealed. I have heard many landlors of SFD and condos are waiting for the results of election and keeping their units vacant. Once the CH is repealed they plan to put them for sale.”

That’s their choice under Ellis, but you have not provided evidence that CH prevents this. I simply point out,, it will happen nevertheless. You said:

“This will cause a flood of new property on the market and force chain reaction thruout the state resulting in significant price drop for real estate. “

That is going to happen, it looks inevitable, Costa Hawkins will do nothing to prevent it. You said:

“So homeowners should be aware on these unintended consequences and vote accordingly.”

Their market was inflated not by Costa Hawkins. So they have a completely independent problem. Don’t conflate the two. You said:

“Additionally with the RE dropping in value, state will lose hundreds of millions in lost taxes, and cities tens of millions ( see posts above RE bipartisan legislative office research).”

I already provided a point by point comment regarding the “CONFLICT OF INTEREST” group called the LAO. THERE WAS NO SCIENTIFIC CONCLUSION MADE ONLY A CLAIM OF “POTENTIAL”. You said:

“This in turn force cuts in police, educations and other important programs and taxes would have to be increased.”

There are many other factors that impact that conclusion. You must provide proof to establish that ONLY Costa Hawkins Real will cause that problem scientifically. You are assuming “Facts not in Evidence” You said:

“This is not my opinion it is the State Legislature opinion.”

The LAO report was nothing but “Assumiong facts not in evidence”, and you know it. You said:

“Even Newsom knows these dire consequences and is opposing the repeal.”

Newsom cannot run for the Governor’s office without getting the money necessary to pay for the campaign. He simply cannot argue against the sources of money he needs to compete. So it is clearly observed that it would be impossible for him to adopt Proposition 10. The “control” over the State Legislature and the Governors office by groups like the CAA and CAR are pretty apparent. This is not supporting evidence. Only the impact of private interest monies used to control politicians. You said:

“But the bright sid is that TBM who is not capable of providing for his own housing will get a free ride on the backs of everybody else.”

Again, let’s not get personal. The facts are you haven’t provided any evidence to the contrary, YET. I gave you my source, it is not MY theory it comes from (Web Link

I strive to never bring up anything I cannot substantiate. I strive to use sound research. I am not perfect. So if you have any argument with my information, please address the information and address how it must be discredited? But not myself. My information is not my work.

BM, you always ask for proof. You state "I simply point out it will happen nevertheless"

Prove it.

In response to mvresident2003 you said:

“BM, you always ask for proof. You state "I simply point out it will happen nevertheless"

Prove it.”

Here is another piece of evidence to prove my observation:

Web Link

Another piece:

Web Link

Another piece:

Web Link

And:

Web Link

And:

Web Link

How much more do you need?

So let me be clear, you are saying that Newsom, if run on the platform supporting CH repeal but without CAA and CAR campaign contributions would lose against republican candidate who is far far behind.
This is crazy. If gubernatorial candidate loses running on the platform of repeal than what are the chances of the repeal itself?
I think the fact is that Newsom feels very confident of winning, does not need to compete with ultra left radical democrat and can afford to speak the truth (does not have to be politically correct)
The other democrats who run against other democrats will say anything to increase their chances of winning, including the support of CH repeal ( Buffy Wicks for one)

In response to mike rose you said:

“So let me be clear, you are saying that Newsom, if run on the platform supporting CH repeal but without CAA and CAR campaign contributions would lose against republican candidate who is far far behind.”

I am not a “Democrat or a Republican” I am an independent voter. If you ever read the books:

(Web Link “America: What Went Wrong?” and ((Web Link “America: Who Stole The Dream”, written by Pulitzer Prize Donald Bartlett and James Steele, newspaper journalists with the “Philadelphia Inquirer” you could see that “BOTH” parties are equally corruptible. . In fact the poltical system is so corrupt that it now makes it a for profit business after the recent “Citizens United” case. You said:

“This is crazy. If gubernatorial candidate loses running on the platform of repeal than what are the chances of the repeal itself?”

The two “campaigns” are independent. So you cannot make that kind of assumption. You said:

“I think the fact is that Newsom feels very confident of winning, does not need to compete with ultra left radical democrat and can afford to speak the truth (does not have to be politically correct)”

In the Art of War, which Politics is War, you do not cut yourself off from any funds you can use to run a political campaign. You know that. You said:

“The other democrats who run against other democrats will say anything to increase their chances of winning, including the support of CH repeal ( Buffy Wicks for one)”

The reality is that the “democrats” are split on this topic. The democrats cannot afford to “split” their voters. So they are not making it a public conflict. But if you want proof, here your are (Web Link notably:

“"It's certainly a challenge for more moderate leaning Democrats to make the argument against Prop. 10," said Democratic consultant Brian Brokaw. "But the trick is separating the general support for rent control from the concept of Proposition 10."

That's the challenge facing Buffy Wicks, a former advisor to President Barack Obama, who is running for State Assembly in the 15th District, which includes Berkeley, Richmond, and parts of Oakland.

Her opponent, Richmond city councilwoman and fellow Democrat Jovanka Beckles, is hoping to make rent control a central issue in the campaign.

Beckles said she hopes to follow a similar strategy to past campaigns in Richmond, where progressive candidates ran on opposing a local casino, enacting rent control, or boosting the minimum wage.”

Please consider this information?

"May be headed"
"Warning signs"
"Could we be in a bubble"
"Crash or boom in 2019?"
"May have reached". "Were probably at top peak"

This is your PROOF? Typical. Rhetoric and theory but most certainly not proof.

TBM,
Your response to my comment:
“So let me be clear, you are saying that Newsom, if run on the platform supporting CH repeal but without CAA and CAR campaign contributions would lose against republican candidate who is far far behind”
is:
"I am not a “Democrat or a Republican” I am an independent voter."
Another example of your response having nothing to do with topic you are commenting on.
You just throw anything on the wall with a hope that will stick, on subject or not, and think that people are going to buy your response as intelligent one.

In response to mvresident2003 you said:

“"May be headed", "Warning signs", "Could we be in a bubble", "Crash or boom in 2019?", "May have reached", "Were probably at top peak"

This is your PROOF? Typical. Rhetoric and theory but most certainly not proof.”

I will not argue that I do not have the “scientific” analysis. But sometimes the absence of counter arguments, and the sources I used being of “significant” objective and unbiased resources, you have to give some credit to their judgment. Please provide some stories that indicate that the property values currently are accurate as far as the appraisals are performed using a “scientific” method and not performed by those who are making their living in the real estate market? Otherwise you are just replaying the pattern that got us into the 2007-8 housing crash again.

Just to remind you the history was (Web Link . Everyone was in on the “Bubble” game because they all earned quick cash for every “deal” they could close. This includes most investment banks, analysts, and real estate appraisers. What did not happen in effect is a long term “correction”. In most cases, the Federal Reserve bailed out everyone and that in a lot of cases properties were not left on the market to artificially decrease supply. It was because the “Great Recession” would have become the Second Great Depression. But the systemic problems that caused the Great Recession were not fixed, so a Second Wave is significantly likely.

In response to Posted by mike rose you said:

“your response to my comment:

“So let me be clear, you are saying that Newsom, if run on the platform supporting CH repeal but without CAA and CAR campaign contributions would lose against republican candidate who is far far behind”

is:

"I am not a “Democrat or a Republican” I am an independent voter."

Another example of your response having nothing to do with topic you are commenting on.”

Why is it you only want to address the information you think you can criticize and ignore the rest. You remind me of Rudy Guilliani and his continual attempts to discredit anyone that questions the conduct of the current president. To you, anyone that questions you deserves to be personally attacked in whatever way you wish. You said:

“You just throw anything on the wall with a hope that will stick, on subject or not, and think that people are going to buy your response as intelligent one.”

That is your opinion. And I can understand if many others also do have your opinion. You all have a right to your opinion. I will not get involved in an “opinion” contest. I will simply present information that does not agree with you. It is OUR FIRST AMENDMENT RIGHT TO DO SO.

But, personal attacks are simply a poor justification. If you want to present a good argument, please provide something more? As always, you make offhand arguments with no evidence. Do you think it works in the long run? What happens if Costa Hawkins Repeal is approved? Are you prepared for that contingency?

HTG you are cracking me up. In order to satisfy you, proof has to be irrefutable however in order to support your claims it can be "credit to judgement"

You, my friend, have zero credibility. And I agree, you absolutely have the right to your opinion...biased and slanted as you are proving it to be.

In response to mvresident2003 you said:

“HTG you are cracking me up. In order to satisfy you, proof has to be irrefutable however in order to support your claims it can be "credit to judgement"”

I never said “irrefutable”, I said I requested resources that are “independent” of any influence due to financial interests. You know I admitted to not have myself “irrefutable” proof. You are not entirely being frank in how you’re expressing yourself. My resources are clearly not biased. You went on to say:

“You, my friend, have zero credibility. And I agree, you absolutely have the right to your opinion...biased and slanted as you are proving it to be.”

As I already pointed out, my resources I use come to their conclusions. Granted I do agree with them. But again, they are resources that are not “biased” or “slanted”. In fact many are significantly “business-oriented” resources that are inclined to give the “markets” the benefit of the doubt. So, how can my research be “biased” or “slanted” when it is performed by those with “expressed” objectivity.

Is the website “Business Insider” a “biased” or “slanted” resource? Is the website “CNBC” a “biased” or “slanted” resource? Is the website “MangnifyMoney.com” a “biased” or “slanted” resource? Is the website “GordCollins.com” a “biased” or “slanted” resource? Is the website “SeekingAlpha.com” a “biased” or “slanted” resource? Is the website “MarketWatch.com” a “biased” or “slanted” resource?

Those websites are the ones that were the links in my past post. Are you trying to say that those are all “biased” or “slanted” against business or real estate or apartments? That would not seem to make sense. They are clearly good resources, and they would not post their information without a sound basis to do so. All I ask is please provide us something in the same light to support your claims? Is that unreasonable?

No BM, I am not saying that THEY are biased, I am saying YOU are. You take their words "may", "could" etc and then assert that it's a done deal. You twist and conflagration so much information it's just laughable at this point. But again, you have your views and are free to express them.

And the rest of us are free to disagree.

In response to mvresident2003 you said:

“No BM, I am not saying that THEY are biased, I am saying YOU are. You take their words "may", "could" etc and then assert that it's a done deal. You twist and conflagration so much information it's just laughable at this point. But again, you have your views and are free to express them. “

Again, please provide some kind of research to prove that I am biased? Please provide some proof that the market is NOT inflated? The only response you have is to personally attack anyone that demonstrates some kind of criticism regarding the current situation. Again, you remind me of the famous quote (Web Link :

The 3 Stages of Truth

The process of acknowledging a truth is broken down into three stages:

The first stage is ridicule. When a new idea or concept is brought up, it’s so strange that it’s completely absurd. People cannot fathom this idea and how it fits into their lives, so they simply laugh at how impossible it seems.”

The statement you made here “You twist and conflagration so much information it's just laughable at this point” seems to apply here. What do I do in response? I do this:

“How to Deal With Ridicule

A new idea can seem so ridiculous that people simply laugh. Pasteur’s theory disproved a previous one that had existed for thousands of years, so it’s no surprise that people were shaken.

However, Pasteur had evidence that his theory made sense. He tested his theory on different subjects in various environments, which proved that his hypothesis was correct.

If you want to be taken seriously, THEN YOU NEED TO HAVE EVIDENCE TO BACK IT UP. Sometimes ideas are rightly ridiculed, while others are unjustly so. I suggest using the “do it, then say it” strategy to ensure your work has better chance of being accepted by others.”

I did provide significant evidence at this time. On so many issues and topics I provide unbiased and objective resources to provide a basis of my observations. So far you have not. It goes on to say:

“The second stage is opposition. After a new concept hasn’t made it past the first stage, people begin to worry that it’s here to stay. A few might support the concept, but most will resist because they see it as a threat to everything they’re familiar with.”

That is what many that have posted comments here have done in the past and continue to do so. Especially because what is discussed here is a direct “threat to everything they’re familiar with” regarding the current economic tide and the business practices that have occurred in California for 20+ years. The approach with dealing with “opposition” is:

“How to Deal With Opposition

Have you ever considered pursuing an endeavor, only to think to yourself:

“I don’t have any connections.”

“I don’t have the formal training necessary.”

“I don’t have money.”

Think about what you can do or say when one of these lines comes up. How can you react when others disagree with you?”

My response has been not to express personal attacks, denigrate, or disrespect others. I simply address the questions asked. Granted, my answers do not agree with your point of view. When those who oppose do not take equal actions in response, but simply personally attack, or nit-pick what they can as their only response, it should be a good indication that one is approaching an “inconvenient truth”. Finally the last stage is:

“The third stage is self-evident. There is increasing evidence that supports the idea, which goes from having a few early supporters to entering the mainstream. A majority of people support the fact and come to accept it as a given.”

The fact is my research is a “growing tide” of proof that the markets are about to undergo a significant shift. You are free to your point of view, but also you may become a significant minority, and if you do not take steps today to deal with this issue, you may find yourself with great losses. Just understand that it goes on to say:

“What to Do When Your Work is Self-evident

When you succeed at proving an idea or achieving a goal, does it mean it’s time to stop? Of course not….

The point is that reaching a truth doesn’t mean it’s time to stop. Keep going. There’s always more to discover and explore.

Reaching a goal is simply one stop on the journey.

Getting to the Self-Evident Stage in Life

In our personal lives, we can be met with ridicule and opposition whenever we make a choice that goes against mainstream beliefs, such as:

When we choose to study a subject that isn’t trendy.

When we pursue a business idea that isn’t proven yet.

When we choose to live differently from the people around us.

All of these things can lead to negative feedback and criticism. Instead of listening to everyone’s opinions though, sometimes the best thing is to ignore the noise and due what works for us.

It’s useful to see how some ideas that are popular today were once unorthodox. The idea of germs spreading diseases was once laughable. The personal computer was once considered unnecessary.

A viewpoint or concept that you have might not be popular today, but doesn’t mean it’s wrong. It could simply be that others haven’t accepted it yet.”

No doubt, my point of view is NOT popular, it is a direct THREAT to the status quo. But in business, the status quo tends to eventually become a problem BECAUSE UNDESIRABLE ISSUES TEND TO BE IGNORED and they tend to become a serious problem.

Yes, the rest of you are free to disagree. But your group can be observed to be a shrinking one.

I don't disagree.
Yes, I'll have another cerveza and 2 more fish tacos, Juanita...

Howard:

I know we have our differences, but we also have understanding, I just read this story published by CNBC (Web Link

“Morgan Stanley: The biggest sell-off since February is coming and it's going to hit the average investor hard”

It states:

“The "average portfolio" will suffer more because the selling will be concentrated in tech, consumer and small cap shares, the firm says.”

“And the average investor could suffer even more this time, Wilson said.”

He also said:

"We think a coming correction will be biggest since February, although it could very well have more of a negative impact on the average portfolio if it is centered on Tech, Discretionary, and small caps," the note said.”

He also said:

“Wilson noted the relative valuation between growth and value stocks was only higher during the dot-com bubble. He also pointed out that the 10-year return disparity between the Russell 1000 Growth index over the Russell 1000 Value index is at its 96th percentile since 1980.

"Large Cap Growth stocks have outperformed US Large Cap Value stocks by an almost unprecedented amount over both the recent past and prior decade," he said. "Fighting momentum is a difficult game but when you time it right, it can very profitable. WE THINK ONE OF THOSE TIMES IS NOW FOR GROWTH SHIFTING TO VALUE."

In the housing market, I propose the same logic should apply. Growth for growth sake alone leads to higher risks, especially when the markets are not going to grow proportionately regarding the customer resources. Basically, if customer’s earnings are not growing in the same pace as costs, this elasticity will eventually break. He also said:

“Wilson reaffirmed his overweight ratings for utilities, energy, industrials and FINANCIALS SECTORS, which should outperform in a more difficult market environment, he said.”

THE FINANCIAL SECTOR HISTORICALLY BETS ON REAL ESTATE. Why? Because it has always been considered a STABLE investment. Properties are assumed to always increase in value. It looks like we seem to be playing that song again. But you know we learned that if the real estate market does not efficiently track with the “Value” of the investment, but depends on “Growth”, things can go wrong very badly. The chain went like this:

Home or Housing Owners Wanted High Profits When Selling Their Buildings. Real Estate Agents Wanted The Largest Sales Commission They Could Get. The Real Estate Agents Depend on Property Appraisers To MAXIMIZE The Marketed Value. However, Real Estate Appraisers DO NOT DO MARKET ANALYSIS, They Use Limited TOOLS To Express Their Opinion. Financials Depend on the Real Estate Agents and Property Appraisers Regarding Underwriting a Mortgage. Financials Took Bigger Risk Because It Did not do Market Research. The Customer Earnings Did Not Increase Equal to Property Appraiser Values, The Financials Provided Underwriting On Properties That were Inflated. The Financials Underwrote Mortgages With Those Who Were Not Sound.

That was the basis of the recent housing bubble that hit us in 2007. The story goes on to say:

“Earlier this month the strategist turned defensive on the market, downgrading small-cap stocks to equal weight and lowering his rating for technology stocks to underweight. In 2017, Wilson was one of the most bullish strategists on Wall Street.”

TBM,
From your numerous and lenghty posts I get an impresion that you are the type of the person that fears and it is not capable to undertake any investment risk.
Your life is reduced to rooting for other brave souls, who do put in sweat, work and money and take risks, to lose it all.
I sense this would make you exteremally happy, as it would prove (in your mind) that this idle existance of yours is the best way to go through life.
Keep rooting, most people will be ahead, some will lose, but you are always going to be trailing behind, waiting for government handouts.
I personally applaud people who show initiative, take risk and win.

In response to mike rose you said:

“From your numerous and lenghty posts I get an impresion that you are the type of the person that fears and it is not capable to undertake any investment risk.”

Why the persistent personal attacks? Do you have anything constructive to discuss?

“Your life is reduced to rooting for other brave souls, who do put in sweat, work and money and take risks, to lose it all.”

Again, why the persistent personal attacks? Do you have anything constructive to discuss?

“I sense this would make you exteremally happy, as it would prove (in your mind) that this idle existance of yours is the best way to go through life.”

Again, why the persistent personal attacks? Do you have anything constructive to discuss?

“Keep rooting, most people will be ahead, some will lose, but you are always going to be trailing behind, waiting for government handouts.”

Again, why the persistent personal attacks? Do you have anything constructive to discuss?

“I personally applaud people who show initiative, take risk and win.”

Again, why the persistent personal attacks? Do you have anything constructive to discuss?

Please provide SOME kind of real information, instead of waging a campaign of CHARACTER ASSASSINATION where you perceive a threat? If you notice, I typically answer your “ACCUSATIONS” with some kind of real information. Character assassination is the LAST RESORT of those whose point of view contradicts another, but refuses to do any work to prove their point. Until you can provide us with equal effort, contribute some verifiable information to support your opinion, you simply are LASHING out to anyone that does not agree with you.

It is personal, because you personally spreading lies, misinformation and promote theft.
That's all.

In response to mike rose you said:

“It is personal, because you personally spreading lies, misinformation and promote theft.”

Can you please provide material proof of a lie? But before you do, make sure you do not “interpret” my words. And also do not try to take them out of context. That has been your modis operandi. You so far only make the “fake” claim without evidence to back it up.

Same goes for the “misinformation”

And finally, if I was guilty of promoting or enabling theft, wouldn’t I be investigated and prosecuted? You always claim that “rent-control” is theft, but that so far is simply not what the courts have said. Your constant repetition of your claim does not change reality. And if values crash, that is NOT THEFT. Investors live by “caveate emptor” and expect the possibility of such loss. You said:

“That's all.”

You simply have not demonstrated that the issues discussed by myself and others that contradict your opinion are “personal” attacks or attempts to “character assassinate” you or your peers. However your apparent reluctance to voluntarily do so can be grounds for a complaint of the “terms and conditions” of this forum. I choose not to make many attempts to have your posts censored ever. I think I can recall maybe 3 times on only 3 particular posts, in the past 3+ years. Sometimes leaving your comments up is far more enlightening to the public.

I am not going to provide you proof here of your lies. Like you did I am going to refer you to my previous posts exposing your lies , making up laws that don't exist etc.
You do the search.

In response to mike rose you said:

“I am not going to provide you proof here of your lies. Like you did I am going to refer you to my previous posts exposing your lies , making up laws that don't exist etc.”

OK, then we BOTH have to ADMIT WE MAKE UNSUBSTANTIATED ALLEGATIONS. I am willing to consent to that situation. The question is, are YOU willing to make the same ADMISSION? I am almost certain you will not do so. Your only response will consist of “THERE IT IS HE ADMITS HE IS A LIAR” You also said:

“You do the search.”

You love to use the adage when it suits you “Innocence is presumed, the burden is on the accuser”. Thus you want “my opinion to be substantiated”, but at the same time you want your “allegations” to be taken as fact. You can’t have it both ways my friend. This George Orwellian reasoning is getting you nowhere.

Just another FYI:

Please consider the following information from Investment News (Web Link It specifically states:

“The history of nontraded real estate investment trusts is littered with stories of companies that appear to have value and promise one day only to reveal a hideous portrait the next.

Several REITs that raised money in the years before the 2008 credit crisis and stock market crash repeatedly proved this rule. Sold by a broker for $10 per share in 2005 or so and listed on a client's account statement for the same amount for years, those REITs' value plummeted in 2009, 2010 and 2011.

Known as zombie REITs, THESE REAL ESTATE COMPANIES DUG THEIR OWN GRAVES BY OVERPAYING FOR REAL ESTATE AT THE TOP OF THE MARKET, taking on bad debt and paying high fees to their management.

Some of the REIT managers who saw their companies take savage hits in value included Behringer Harvard, Cornerstone, Inland and KBS.

As regular readers of InvestmentNews know, we covered the collapse of these companies closely. Financial advisers in the mid-2000s promised many of their clients that investing in nontraded REITs was reasonable and stable. Real estate never lost value, was the pitch, COMBINED WITH PROMISED RETURNS ANNUALLY OF 6% TO 7%.”

NOTE: one investor said in a post his expected ROI are between 8-20%. Given this history, that looks like a high expectation. It goes on to say:

“For their trust, investors lost millions.

New industry rules have addressed the issues dogging REITs, most specifically making what investors actually pay for the product much more transparent. Fat commissions have been cut, and brokers have run away from the product. Sales have dropped accordingly.

But the REIT marketplace got a reminder earlier this month of how disastrous certain nontraded REITs can be for investors when a company associated with Nicholas Schorsch, the former nontraded REIT czar, listed on the Nasdaq.

So far, the listing of American Finance Trust Inc., which was sold in 2013 during Mr. Schorsch's money-raising heyday, has "eroded approximately $1 billion of" the company's equity value, according to a report last Thursday by Robert A. Stanger & Co. Inc., an investment bank. The listing of AFIN has turned into an ugly "belly flop," according to Stanger.

The performance of the company since it started trading on July 19 is particularly galling given that the company published an "estimated per share" net asset value of $23.56 just last month. Earlier today, shares of American Finance Trust, with the ticker symbol AFIN, were trading at $14.80 with a market capitalization of about $1.6 billion.

To recap the promise that turned into an ugly portrait: Brokers sold AFIN five years ago at $25 per share. The company recently published an estimated value of $23.56. The market is telling us, today, that AFIN is really worth $14.80 per share.

That's 40.8% less than what a broker sold it for, and 37.2% less than the company's independent board last month said it was worth.”

This seems to indicate that the “PRIVATE” investment market also knows there are real problems occurring independent of any “Rent Control” problems. It went on to say:

“Despite the pain felt by investors, AFIN's management inexplicably sounded pleased with the REIT's results. AFIN shares closed at $15 after its first day of trading, or $10 less than what brokers sold it for.

"This event also demonstrates the commitment we share with our independent directors to creating a liquidity event designed to deliver optimal results for shareholders," said AFIN's CEO Michael Weil, in a statement on July 19.

How on earth is the listing of AFIN an "optimal result" for its shareholders? To call it anything less than a disaster is a joke.”

To me, it looks like the “Housing Market” knows a lot more than what it publishes regarding the health of the current and future markets. Costa Hawkins simply is a law to socialize the losses of investors that have the knowledge that their practices are leading to a disaster.

There is this information also from the Motely Fool website found here (Web Link :

“6 Things That Could Cause a Stock Market Crash

The stock market has crashed several times throughout history, including the infamous Crash of 1929, Black Monday in 1987, and the financial crisis of 2008. While the exact cause of each of these crashes can get a bit complicated, stock market crashes are generally caused by some combination of speculation, leverage, and several other key factors.

Here's a rundown of six different stock market crash catalysts that could contribute to the next plunge in the market.

1. Speculation

Many market crashes can be blamed on rampant speculation. The Crash of 1929 was a speculative bubble in stocks in general. The crash in tech stocks in the early 2000s followed a period of irrational speculation in dot-com companies. AND THE CRASH OF 2008 CAN BE ATTRIBUTED TO INVESTOR SPECULATION IN REAL ESTATE (AND BANKS ENABLING THE PRACTICE).

The point is that when irrational euphoria about a certain asset class or industry exists, it's not uncommon for it to end very badly.

2. Excessive leverage

When things are going well, leverage (a.k.a. "borrowed money") can seem like an excellent tool. For example, if I buy $5,000 worth of stock and it rises by 20%, I made $1,000. If I borrow an additional $5,000 and bought $10,000 worth of the same stock, I'd make $2,000, doubling my profits.

ON THE OTHER HAND, WHEN THINGS MOVE AGAINST YOU, LEVERAGE CAN BE DOWNRIGHT DANGEROUS. LET'S SAY THAT MY SAME $5,000 STOCK INVESTMENT DROPPED BY 50%. IT WOULD STING, BUT I'D STILL HAVE $2,500. IF I HAD BORROWED AN ADDITIONAL $5,000, A 50% DROP WOULD WIPE ME OUT COMPLETELY.

Excessive leverage can create a downward spiral in stocks when things turn sour. AS PRICES DROP, FIRMS AND INVESTORS WITH LOTS OF LEVERAGE ARE FORCED TO SELL, which in turn drives prices down even further. The most notable occasion was the Crash of 1929, in which excessive purchasing of stocks on margin played a major role.

3. Interest rates and inflation

Generally speaking, rising interest rates are a negative catalyst for stocks and the economy in general.

THIS IS ESPECIALLY TRUE FOR INCOME-FOCUSED STOCKS, SUCH AS REAL ESTATE INVESTMENT TRUSTS (REITS). Investors buy these stocks specifically for their dividend yields, and rising market interest rates put downward pressure on these stocks. As a simplified illustration, if a 10-year Treasury note yields 3% and a certain REIT yields 5%, it may seem worth the extra risk to income-seeking investors to choose the REIT.

ON THE OTHER HAND, IF THE 10-YEAR TREASURY'S YIELD SPIKES TO 4%, THE REIT'S DIVIDEND WILL (ROUGHLY) NEED TO RISE PROPORTIONALLY TO ATTRACT INVESTORS. AND LOWER STOCK PRICES TRANSLATE TO HIGHER DIVIDEND YIELDS, ON A PERCENTAGE BASIS.

From an economic standpoint, higher interest rates mean higher borrowing costs, which tends to slow down purchasing activity, which can in turn cause stocks to dive. So, if the 30-year mortgage rate were to spike to, say, 6%, it could dramatically slow down the housing market and cause homebuilder stocks to take a hit.

6. Panic

It's important to point out that crashes aren't generally caused by one or more of these factors all by themselves. It's typically a combination of a negative catalyst and investor panic that causes a sharp dive in the stock market.

For example, the steepest market drop during the financial crisis occurred during September and October 2008. YES, IT WAS REAL ESTATE SPECULATION AND EXCESSIVE LEVERAGE THAT LED TO THE TROUBLE, BUT FEARS THAT THE U.S. BANKING SYSTEM COULD POTENTIALLY COLLAPSE SENT INVESTORS INTO A PANIC, WHICH LED TO THE ACTUAL CRASH.”

So are we going to see another bank bailout after 2007? I simply don’t know. The politics would say NO because it was given a break just 10 years ago. But YES given that the damage to the “Market” itself is so large, we cannot “afford” the “market” to fail. I would gamble that it will be a YES.

What does it have to do with anything?
Again you cut and paste lots of irrelevant stuff.
What is your point?
Can you state your point in one sentence so everyone can read it and understand it?

In response to mike rose you said:

“What does it have to do with anything?

Again you cut and paste lots of irrelevant stuff.

What is your point?”

Costa Hawkins supporters claim that repeal will be the cause of all economic problems that are about to occur, or at least argue that Costa Hawkins prevents these problems. I am just pointing out that that was a false theory. You said:

“Can you state your point in one sentence so everyone can read it and understand it?”

When people make claims like the LAO does, and they are “multiple sentences” in length, you expect those with an opposing point of view only “one sentence”? All I see here is another attempt to try to “kill the messenger” again. The public has the right to read free information. Why are you opposed to it?