(This is mildly unfair to SF, which actually has a higher population density than Minato-ku, principally because Minato-ku is not a residential neighborhood. But if SF was serious about affordable housing, it would look like Minato-ku rather than "miles of two-story buildings.")
Well, you've got to tear a bunch of stuff down first. And I've read before that the city doesn't want to build up too much because they want to retain some of their character or something.
> I've read before that the city doesn't want to build up too much because they want to retain some of their character or something.
That's kind of the point. The city has several conflicting goals: make it an affordable place to live, don't allow new growth to change the character of the place, attract high paying jobs, don't widen the roads, attract new residents without kicking out old ones, etc.
Rent control is one of the tools they use to try to balance between these conflicting goals. The fundamental problem is that every serious economist says that rent control is a losing battle, and it never truly works anywhere it's been tried. There really aren't any rent control success stories from anywhere in the world. At some point, the city has to realize it can't achieve its conflicting goals, and it will need to prioritize: is it more important to have affordable housing or more important to limit the number of places to live in the city?
It's worse than a losing battle; it actually makes the housing problem worse. It's good for the lucky few who end up in rent-controlled housing, but most of the people who can't afford $4k/mo rents also aren't that lucky.
How does it make the housing problem worse in San Francisco?
If we assume that the NIMBY crowd will continue to block new development and other interests will continue to block increases to the high limits for new construction across much of the city, then what would elimination of rent control do, other than ensure that every renter in the city was paying ~$2500+/month per bedroom?
I have this idea that the monthly payments on the mortgages required to purchase a condo are a pretty good approximation of where rents would be without rent control. With pretty much every condo sale price sitting at or north of $1 million, it doesn't look pretty.
Rent control isn't the only thing distorting San Francisco's market. But San Francisco won't get any more affordable until it gives up on the policy.
However, looking at the original post, I strongly suspect that the landlord isn't planning to rent out the apartment after the tenant is evicted. I think the letter looks a lot more like a landlord trying to get out of the business. Rent control, and other regulations, discourage people from offering places for rent. Sometimes that is intentional, for instance, as a policy to get rid of tenements. But often it's a surprise to the people writing the regulations. They honestly don't realize that each additional form they want people to fill out discourages people from being in business in any way.
Getting rid of rent control would get rid of some of that disincentive and put some places back on the market.
I recently moved from the Reno area to the New York area (well, New Jersey; but I work in New York). I spent a lot of time in the Bay Area over the last few years. I really would like to see it stop pursuing economically backwards policies, but I think it's more likely that economically illiterate politicians will finally manage to kill what makes Silicon Valley unique, and people will move to other places.
Even if no new housing could be built, rent control leads to underutilized housing.
When people pay $500 for something that could be rented out for $5000, they are more likely to keep it for weekend trips after they moved to LA, or at least not take any room mates.
Also, I don't know that there is any official numbers, but I've heard estimated that 10% of the SF rental stock is not rented out, because landlords don't find it worth the pain.
The "NIMBY crowd" also must stop blocking new development. SF desperately needs new housing development at a scale unprecedented in its recent history.
In the meantime, all rent control does is create an arms race between property owners and tenants, one the tenants will all gradually lose. It also eliminates incentives to renovate or even more productively use existing housing stock.
Rent controlled apartments are effectively removed from the supply of housing in the market. Thus, anyone who isn't lucky enough to get a rent controlled apartment (which are most people) faces a market with decreased supply and thus higher prices. It's one of the economically proven ironies of rent control -- higher prices for everyone else.
In a free market yes, but not in a speculation market that does not respond market demands (combined with macroeconomic mechanisms and manipulations from the Federal Government). Going beyond simplistic supply/demand, high speculation markets have constrained economic growth, and many governments, such as HK or South Korea, have taken measures control it as well. It's not that the cost in the area rise, but also startup cost for new enterprises becomes to high, making it difficult for startups and new innovations they create.
Your comment missed the irony, which is that rent control is an effort to mitigate the impact of scarcity for tenants that increases scarcity and reduces market outcomes for tenants.
Rent control is a deliberate tradeoff between price stability for existing tenants and supply (and therefore market clearing price for new leases.) So the supply effect isn't an irony, it's part of the chosen tradeoff.
Can you find a source that acknowledges that rent control is a deliberate attempt to trade additional scarcity for price stability for incumbent residents? I can't find one. I'm a little concerned that this is an instance of retconning.
San Francisco's rent control, at least, doesn't apply to building built after rent control was passed. [1] I believe that's a deliberate attempt to solve for the scarcity concern.
Well the geography and political climate of San francisco and its surrounding towns make this pretty difficult. It's a small city in a major earthquake zone, with tons of hills, surrounded by water and suburban neighbors who consistently vote down any expansion of the existing rapid transit system. Any new transportation infrastructure would take literally decades (see California's coming high speed rail line).
Only problem is politics. Japan has all that and pulled it off a bit too well. Similar goes for the crazy sandcastlers like Singapore.
I can't blame them (SF-dwellers) they had someting rare in the US for a little time. And general ignorance in, general ignorance out, that's local municipal politics, due to short-term incentives and big "costs" of initiating any kind of change or shift to a longer term horizon, nothing will change fast enough, so a lot of people will get bitten by these problems.
This is already happening: the area just north of Bay Bridge looks like Berlin after the wall came down. In my opinion, it has positive feedback and will increase prices even further. Money attracts more money. See New York or Hong Kong- they've built up too.
As the economy becomes global, the rise of super expensive cities is inevitable: London, New York, Hong Kong, San Francisco.
Oregon has plenty of charming and cheap real estate for non-participants in the global economy.
On Mission street in my neighborhood alone there are at lease 3 large lots with derelict buildings on them and they've been that way for years. There are quite a few other smaller parcels on Mission and smaller streets.
If we want to take housing seriously, let's start with a law that says "If the building is abandoned for 5 years, you lose it, it becomes housing."
Unless SF eliminates its insane height restrictions, the very few buildings that would be repurposed in this fashion would immediately become $4000 apartments.
It's a few drops in the bucket, yes -- but if we can't even bring ourselves to turn derelict buildings into housing, it's hard to claim that we're serious about solving the problem.
In all seriousness though, I'm fairly certain that a repurposed cruise ship turned luxury condo building anchored off the coast with a free, regular speed boat shuttle could be a profitable business given the bonkers prices in SF proper.
Some cities actually do stuff like that. You can can anchor large, cheap boats in Paris on the Seine (you pay a rent for that of course,but its much cheaper - closer to a parking spot).
Then these boats are made into single apartments. They're larger than most apartments in fact. There is electricity and water included, the only thing you need to get wirelessly is internet (which is rather easy).
