California sure can pick ’em.
Gavin Newsom is just a train wreck.
And what makes it worse is he thinks he’s doing a great job.
Democrats.
CA just passed the strongest rent control package in America.
The rent is too damn high — so we’re damn sure doing something about it. https://t.co/046GjtmClO
— Gavin Newsom (@GavinNewsom) September 12, 2019
Could he be any more economically ignorant?
Asking for a friend.
Pradheep J. Shanker was good enough to try and ‘educate’ Gavin on why his new legislation is dumber than dumb.
You, sir… Are an idiot.
Your problem is that you don't have enough supply of homes… So you plan on… Decreasing the supply of homes? https://t.co/gUcpTxe2mj
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
Psh, as if Gavin understands ‘supply and demand’.
This is exactly right.https://t.co/kErIEgHJ1X
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
From the Wall Street Journal:
The rent cap could encourage landlords to increase rents up to the limit each year rather than respond to the market. Landowners might also decide it’s more profitable to convert buildings to condos, which would further limit the stock of rentals. The biggest harm so far has been to increase uncertainty for developers. Building permits in the first seven months this year have fallen 17% compared to 2018 despite an increase in state subsidies. The only other times permits have plunged by this much were during recessions.
They just don’t get it.
Shanker continued.
There are common sense solutions.@GavinNewsom didn't pick a single one of those. https://t.co/HY1ihiKcWv
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
Another one.
Good link here.https://t.co/6wdFzzjXVm
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
“We do know what solutions and policies work,” says Giselle Routhier, policy director of the Coalition for the Homeless. “We just need the political will to make it happen.”
Guess they don't have the political will…
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
Guess not.
Denver has actually become a model for this (Yes, Denver!).
"“This is a city putting up real dollars to create affordable housing,” says Ethan Handelman, vice president of policy and advocacy for the National Housing Conference.
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
"“We don’t always think of smaller cities when affordability comes up, but they do have a serious rental problem.”
Note all of these solutions center on INCREASING SUPPLY OF HOMES.
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
NOT CAPPING THE RENT.
Gavin.
Ya’ nob.
And while we are at it…lets note that every time we talk about this, someone asks "But rent control doesn't reduce supply…it just regulates the cost!"
Repeat after me: RENT CONTROL DECREASES SUPPLY. There are numerous studies on this.
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
What he said.
What happens is this:
Owners of property have to take a long term look at rent when it comes to cost/benefit of owning rental properties.
If you know your potential rent is fixed, even as COSTS CONTINUE TO GO UP, basically you are insuring less profit over the years.
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
Yup.
Furthermore, that decrease in profit comes as property values increase (dramatically in many cases like California).
So not only do you not make income, but you have now likely locked in the worth of your property, and will have trouble benefiting from that increase.
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
And Gavin thinks this is a win.
Additionally, on the front end, fewer people will choose renting of their homes as an option at all.
So what you've guaranteed is that over the long term, far fewer rentals will come to market.
— Pradheep J. Shanker (@Neoavatara) September 12, 2019
Gotta love California.
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