L.A. Times: Why is liberal California the poverty capital of America?

And these goals

The Effects of Rent Control
Economists are virtually unanimous in concluding that rent controls are destructive. In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing available.”1 Similarly, another study reported that more than 95 percent of the Canadian economists polled agreed with the statement.2 The agreement cuts across the usual political spectrum, ranging all the way from Nobel Prize winners milton friedman and friedrich hayek on the “right” to their fellow Nobel laureate gunnar myrdal, an important architect of the Swedish Labor Party’s welfare state, on the “left.” Myrdal stated, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.”3 His fellow Swedish economist (and socialist) Assar Lindbeck asserted, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”4 That cities like New York have clearly not been destroyed by rent control is due to the fact that rent control has been relaxed over the years.5 Rent stabilization, for example, which took the place of rent control for newer buildings, is less restrictive than the old rent control. Also, the decades-long boom in the New York City housing market is not in rent-controlled or rent-stabilized units, but in condominiums and cooperative housing. But these two forms of housing ownership grew important as a way of getting around rent control.

Economists have shown that rent control diverts new investment, which would otherwise have gone to rental housing, toward greener pastures—greener in terms of consumer need. They have demonstrated that it leads to housing deterioration, fewer repairs, and less maintenance. For example, Paul Niebanck found that 29 percent of rent-controlled housing in the United States was deteriorated, but only 8 percent of the uncontrolled units were in such a state of disrepair. Joel Brenner and Herbert Franklin cited similar statistics for England and France.

The economic reasons are straightforward. One effect of government oversight is to retard investment in residential rental units. Imagine that you have five million dollars to invest and can place the funds in any industry you wish. In most businesses, governments will place only limited controls and taxes on your enterprise. But if you entrust your money to rental housing, you must pass one additional hurdle: the rent-control authority, with its hearings, red tape, and rent ceilings. Under these conditions is it any wonder that you are less likely to build or purchase rental housing?

This line of reasoning holds not just for you, but for everyone else as well. As a result, the quantity of apartments for rent will be far smaller than otherwise. And not so amazingly, the preceding analysis holds true not only for the case where rent controls are in place, but even where they are only threatened. The mere anticipation of controls is enough to have a chilling effect on such investment. Instead, everything else under the sun in the real estate market has been built: condominiums, office towers, hotels, warehouses, commercial space. Why? Because such investments have never been subject to rent controls, and no one fears that they ever will be. It is no accident that these facilities boast healthy vacancy rates and relatively slowly increasing rental rates, while residential space suffers from a virtual zero vacancy rate in the controlled sector and skyrocketing prices in the uncontrolled sector.

Although many rent-control ordinances specifically exempt new rental units from coverage, investors are too cautious (perhaps too smart) to put their faith in rental housing. In numerous cases housing units supposedly exempt forever from controls were nevertheless brought under the provisions of this law due to some “emergency” or other. New York City’s government, for example, has three times broken its promise to exempt new or vacant units from control. So prevalent is this practice of rent-control authorities that a new term has been invented to describe it: “recapture.”

Rent control has destroyed entire sections of sound housing in New York’s South Bronx and has led to decay and abandonment throughout the entire five boroughs of the city. Although hard statistics on abandonments are not available, William Tucker estimates that about 30,000 New York apartments were abandoned annually from 1972 to 1982, a loss of almost a third of a million units in this eleven-year period. Thanks to rent control, and to potential investors’ all-too-rational fear that rent control will become even more stringent, no sensible investor will build rental housing unsubsidized by government.

Effects on Tenants
Existing rental units fare poorly under rent control. Even with the best will in the world, the landlord sometimes cannot afford to pay his escalating fuel, labor, and materials bills, to say nothing of refinancing his mortgage, out of the rent increase he can legally charge. And under rent controls he lacks the best will; the incentive he had under free-market conditions to supply tenant services is severely reduced.

The sitting tenant is “protected” by rent control but, in many cases, receives no real rental bargain because of improper maintenance, poor repairs and painting, and grudging provision of services. The enjoyment he can derive out of his dwelling space ultimately tends to be reduced to a level commensurate with his controlled rent. This may take decades, though, and meanwhile he benefits from rent control.

In fact, many tenants, usually rich or middle-class ones who are politically connected or who were lucky enough to be in the right place at the right time, can gain a lot from rent control. Tenants in some of the nicest neighborhoods in New York City pay a scandalously small fraction of the market price of their apartments. In the early 1980s, for example, former mayor Ed Koch paid $441.49 for an apartment then worth about $1,200.00 per month. Some people in this fortunate position use their apartments like hotel rooms, visiting only a few times per year.

Then there is the “old lady effect.” Consider the case of a two-parent, four-child family that has occupied a ten-room rental dwelling. One by one the children grow up, marry, and move elsewhere. The husband dies. Now the lady is left with a gigantic apartment. She uses only two or three of the rooms and, to save on heating and cleaning, closes off the remainder. Without rent control she would move to a smaller accommodation. But rent control makes that option unattractive. Needless to say, these practices further exacerbate the housing crisis. Repeal of rent control would free up thousands of such rooms very quickly, dampening the impetus toward vastly higher rents.

What determines whether or not a tenant benefits from rent control? If the building in which he lives is in a good neighborhood where rents would rise appreciably if rent control were repealed, then the landlord has an incentive to maintain the building against the prospect of that happy day. This incentive is enhanced if there are many decontrolled units in the building (due to “vacancy decontrol” when tenants move out) or privately owned condominiums for which the landlord must provide adequate services. Then the tenant who pays the scandalously low rent may “free ride” on his neighbors. But in the more typical case the quality of housing services tends to reflect rental payments. This, at least, is the situation that will prevail at equilibrium.

If government really had the best interests of tenants at heart and was for some reason determined to employ controls, it would do the very opposite of imposing rent restrictions: it would instead control the price of every other good and service available, apart from residential suites, in an attempt to divert resources out of all those other opportunities and into this one field. But that, of course, would bring about full-scale socialism, the very system under which the Eastern Europeans suffered so grimly. If the government wanted to help the poor and was for some reason constrained to keep rent controls, it would do better to tightly control rents on luxury unit rentals and to eliminate rent controls on more modest dwellings—the very opposite of the present practice. Then, builders’ incentives would be turned around. Instead of erecting luxury dwellings, which are now exempt, they would be led, “as if by an invisible hand,” to create housing for the poor and middle classes.
http://www.econlib.org/library/Enc/RentControl.html

 

http://laborcenter.berkeley.edu/california-is-working/

So I suppose the phrase I’m looking for is, “thread fail?”

 

Welcome to California
1. America’s largest state economy is California, which produced $2.44 trillion of economic output in 2015, just slightly above the GDP of France during the same period of $2.42 trillion.

Consider this: California has a workforce of about 19 million compared to an employment level in France of slightly more than 25 million workers. Amazingly, it required 56 percent (and 9 million) more workers in France to produce the same economic output last year as California! That’s a testament to the superior, world-class productivity of the American worker.

Further, California as a separate country would have been the sixth largest economy in the world last year, ahead of France ($2.42 trillion) and India ($2.09 trillion) and not too far behind No. 5 U.K. at $2.85 trillion.

Now if California could just stop sending money to welfare-loving deadbeats who comprised the porn belt states in the South.

 

And still nobody knows what you mean. Why are you even on a forum if you're so afraid to say what you mean?

 

This makes California's poor folk feel so much better, hearing about California's 1%. Make a billion, spend 3 billion. Be sure to point out that you made a billion. people will think you're wealthy.

The first number after the state is the state's debt.

more
Alaska $5.0 $3.9 $8.9 $51.0 0.2% 0.7 more
Arizona $14.5 $34.3 $48.8 $329.6 2.6% 7.1 more
Arkansas $6.1 $12.2 $18.3 $128.6 2.1% 3.0 more
California $146.4 $282.8 $429.1 $2,845.4 2.9% 39.8 more
Colorado $18.3 $42.2 $60.5 $350.0 2.5% 5.7 more
Connecticut $41.0 $12.7 $53.7 $283.4 2.1% 3.6 more
Delaware $4.8 $3.0 $7.8 $75.3 1.9% 1.0 more
District of Columbia $0.0 $16.2 $16.2 $139.0 2.7% 0.7 more
Florida $29.3 $113.3 $142.6 $1,017.2 2.9% 21.3 more
Georgia $13.4 $43.7 $57.2 $576.0 2.9% 10.5 more
Hawaii $9.8 $6.7 $16.5 $91.4 2.6% 1.4 more
Idaho $4.0 $2.8 $6.7 $72.4 2.5% 1.8 more
Illinois $62.3 $86.6 $148.9 $849.7 2.1% 12.8 more
Indiana $26.0 $29.8 $55.8 $367.2 2.3% 6.7 more
Iowa $5.8 $12.4 $18.2 $190.4 2.1% 3.2 more
Kansas $9.3 $24.2 $33.5 $162.2 1.9% 2.9 more
Kentucky $12.1 $25.3 $37.4 $211.8 2.2% 4.5 more
Louisiana $15.2 $22.4 $37.6 $244.1 1.6% 4.7 more
Maine $4.4 $2.8 $7.2 $64.1 2.3% 1.3 more
Maryland $27.9 $27.3 $55.2 $409.0 2.3% 6.1 more
Massachusetts $80.1 $20.1 $100.2 $553.2 2.5% 6.9 more
Michigan $38.1 $40.5 $78.6 $528.0 2.5% 10.0 more
Minnesota $19.5 $38.0 $57.5 $359.9 2.3% 5.6 more
Mississippi $8.1 $5.9 $13.9 $114.7 2.1% 3.0 more
Missouri $20.6 $27.3 $47.9 $323.8 2.2% 6.1 more
Montana $2.8 $2.0 $4.8 $48.4 1.9% 1.1 more
Nebraska $1.6 $14.7 $16.3 $122.9 2.2% 1.9 more
Nevada $3.1 $28.4 $31.5 $161.4 2.6% 3.1 more
New Hampshire $8.5 $2.6 $11.1 $85.4 2.9% 1.4 more
New Jersey $70.6 $33.9 $104.5 $626.4 2.2% 9.0 more
New Mexico $6.5 $8.7 $15.1 $98.0 1.6% 2.1 more
New York $143.2 $214.0 $357.2 $1,603.5 2.1% 19.9 more
North Carolina $17.2 $34.7 $51.9 $561.8 2.4% 10.4 more
North Dakota $2.4 $4.9 $7.2 $51.7 -0.2% 0.8 more
Ohio $32.7 $55.2 $87.8 $674.9 2.4% 11.7 more
Oklahoma $8.5 $10.6 $19.1 $187.6 1.0% 3.9 more
Oregon $11.7 $24.1 $35.8 $248.7 3.0% 4.2 more
Pennsylvania $47.4 $82.4 $129.9 $776.9 2.2% 12.8 more
Rhode Island $8.4 $2.5 $10.9 $62.0 2.2% 1.1 more
South Carolina $15.7 $30.7 $46.4 $228.1 2.5% 5.1 more
South Dakota $3.5 $2.7 $6.2 $51.6 2.4% 0.9 more
Tennessee $6.7 $38.0 $44.7 $357.3 2.5% 6.8 more
Texas $59.4 $236.6 $296.0 $1,701.8 1.9% 28.7 more
All states combined $1,183.8 $1,914.2 $3,098.0 $20,013.7 2.4% 328.0 more
Utah $8.2 $13.1 $21.2 $171.6 2.9% 3.2 more
Vermont $3.5 $1.2 $4.7 $33.4 2.1% 0.6 more
Virginia $30.3 $36.6 $66.9 $531.2 2.0% 8.5 more
Washington $34.9 $52.7 $87.6 $517.4 3.2% 7.5 more
West Virginia $6.6 $3.1 $9.6 $77.0 1.5% 1.8 more
Wisconsin $22.0 $23.3 $45.3 $332.6 2.2% 5.8 more
Wyoming $0.7 $1.3 $2.0 $38.4 0.6% 0.6

https://www.usgovernmentdebt.us/compare_state_debt

 

this game you like to play is pathetic. You know perfectly well what I mean.

 

No, I don't. Why are you afraid to say what you mean?

 

According to Zillow, the total value of US Housing stock in 2016 was $29.6 Trillion. 30 billion in one year is not a HUGE problem. It certainly is NOT causing a shortage of available housing, as the poster suggested.

https://www.housingwire.com/articles/38852-zillow-total-value-of-us-housing-reaches-all-time-high

 

There was he same concern about Japan in the 1980's but it ultimately did't make much difference. That's $30 billion invested in the country and China still has to follow all local laws. It's said that the expert is always someone from out of town, but that's not always so.

 

The food stamp President is the only one in history to never experience 3% growth, the added regulations devastated small businesses, as did Obamacare and high taxes. Now, finally, with a President who understands how things work, the previous bottled-up economy has been set free, money is returning, as are jobs, and people are more optimistic and confident than ever. https://www.marketwatch.com/story/a...n-us-economy-and-create-20000-jobs-2018-01-17

 

It's like any other business. If the government tells you the price at which you must sell your product, fewer investors are going to bother with that product. Would you want to own a rental building where government sets the rates to what they think is fair? Few do, and that's what creates a shortage.

 

It's an INCREDIBLY, bigly HUGE problem, and part of this is what's purchased where and why.

And if you consider that China is but one of MANY foreign meddlers in the US housing market, it's an ENORMOUS part of an INCREDIBLY serious TRILLION dollar problem of nowhere near enough affordable housing in the country.

Our affordable housing is being stolen from those in greatest need, and virtually no new affordable housing is being created.

It's a MASSIVE crisis, and it's getting much, much, MUCH worse.

Good morning, Soylent Green.

 

Similar problem with Section 8; just the paperwork makes it more trouble than even well-meaning people want to deal with.

 

California is one of the wealthiest states in the union.
https://www.usnews.com/news/best-states/slideshows/the-10-wealthiest-states-in-america?slide=3
So if California is so bad, what does that tell us about the shithole red states?
ALABAMA HAS THE WORST POVERTY IN THE DEVELOPED WORLD, U.N. OFFICIAL SAYS

 

There is already a shortage where I live, even though prices are crazy. The high rent is also helping push up mortgage prices because investors buy up a lot of the homes.

 

That problem often arise from zoning laws when land becomes artificially scarce and prices go up and out of each of lower income families.

When housing prices plunged 10 years ago it was called a 'crisis' but in fact it was an opportunity, and the same was true of the stock market. But because young people aren't taught finances, and many adults don't have the time, inclination or the nerve, these opportunities are often passed by.

Governments on different levels are often the culprit for high, and often unnecessary, costs. Often they mean well, other times it's for personal or political gain. But we can see it's often counter productive.

 

You will have to do better than presenting your opinion to convince me that China and other foreign investment is responsible for the lack of affordable housing.

 

this game you like to play is pathetic. You know perfectly well what I mean.

 

Of course he did. He just never had an annual average over 3%. He had the worst recession in 80 years. He did awesome, considering.

lol

Trump inherited a booming economy, with almost full employment, and a record high stock market. all of 2017 is still obamas economy, just like the first year of every other president, is the previous presidents economy.

 

The homeless could care less about your "cost of living" or "median household income" statistics. All they care about is "free stuff" and "sanctuary cities".

 

Perhaps Obama and Trump can explain it better.

 

explain what? everything I posted is demonstrably true. Trump inherited a booming economy, with almost full employment, and a record high stock market. all of 2017 is still obamas economy, just like the first year of every other president, is the previous presidents economy

 

The corporations attribute their success in 2017-18 to Trump.

It's amazing what capitalism can do when Washington stops treating BLM better than businesses that actually hire people.

 

This is only true when you factor in cost of living.

 

Yes because people will be lining up to rent out a house that costs $400k for $1000 a month.