Patterico's Pontifications

10/10/2019

Life in a One-Party State

Filed under: General — JVW @ 8:22 am



[guest post by JVW]

As expected, California Governor Gavin Newsom on Tuesday signed into law Assembly Bill 1482, which institutes rent control throughout the state despite California voters overwhelmingly voting against the expansion of rent control this past November. Wait a second, you might interject, AB 1482 isn’t actually rent control, it’s just state mandated caps on how much rent can increase in a given year. I would argue that’s a distinction without much of a difference; the effect of the new law is to control how much rent can be raised. Sure, landlords can boost the rent by five percent plus whatever the annual inflation rate is, which is somewhat less financially restrictive than existing rent control policies in San Francisco, Oakland, and Los Angeles among other cities, but this new law will apply to all apartment buildings built before 2005 whereas existing rent control laws only applied to buildings built before 1995. And this new law mandates that rents be reset according to what they were as of March 2019, which undoes any rent increases that landlords might have imposed this summer in anticipation of this law passing.

I have made my antipathy towards rent control known already, but this law strikes me as too much of an imposition on what ought to be best left as free market transactions. Despite his tiresome happy talk about building quite literally millions of new homes across the Golden State, Gov. Newsom must in his heart of hearts know that these buildings will not materialize any time soon, so this new law is a dirty band-aid applied to a gaping wound inasmuch as it will probably turn out to be counter-productive at best. The law does sunset in 2030, meaning that if it turns out to be the disaster that we expect the legislature can simply let it die without renewal, thus sparing them the indignity of having to vote to dismantle it. Yesterday the governor signed another bill which contains several measures to supposedly spur housing construction, though cynics (like me) think that proponents are grossly overestimating the effect it will have on speeding up the building process.

Back to the title of the post, though: by passing and signing this bill, legislative Democrats and the governor have demonstrated that they care not one whit about how the people of the Golden State vote on initiatives. The aforementioned rent control measure, Proposition 10, lost by nearly a three to two margin, yet less than one year later has substantially been imposed by our elected officials. It’s clear at this point that the progressive nomenklatura of California will do as they please and not let anything so irksome as public sentiment get in the way. Life in a one-party state, my friends. Cuba on the Pacific. Russia with raisins.

– JVW

87 Responses to “Life in a One-Party State”

  1. This part of the article caught my attention:

    For Esther Gomez, 52, a McDonald’s employee who raised her children at the Casa Grande Apartments, her rent hike of $695 a month will get rolled back to less than $100 a month.

    “It’s a relief,” she said Tuesday. Gomez said she’s fallen behind on electric and phone bills to pay her now $1,900 monthly rent for the two-bedroom apartment she shares with two grown sons.

    A 52-year-old woman living with her “two grown sons,” yet they can’t scrape together $1900 each month for rent? California’s minimum wage is $12 for large employers and $11 for small employers, so even if the sons worked full-time for a small employer the family would have a weekly income of at least $1360. That’s a societal problem deeper than rising rents, but Heaven forbid the reporter inquire further why two grown men can’t help their mom meet the monthly rent.

    JVW (54fd0b)

  2. Rent control leads to less new construction.
    It also leads to smaller spaces as land lords divide up 1 larger apt into several smaller ones.
    See NYC for examples.

    Time123 (34f867)

  3. Meanwhile…..

    Power still out to over a million in NoCal because PG&E and the state are more incompetent than ever.

    The blame game coming up is going to be a hoot.
    _

    harkin (b1a296)

  4. And there is no prospect of any real change on the horizon, because they selected a new people, and dissolved th he old one.

    narciso (d1f714)

  5. Today’s big story shouldn’t be about one state in our union, or about the NBA, or about Lizzie’s employment history in the 1970s. It should be about the two Soviet-born men who worked for Giuliani to “investigate” Biden’s alleged corruption in Ukraine, among other expressly political acts (link).
    If it’s shown that Giuliani directed (and paid) those men to advance Trump’s political interests, then Giuliani may well get arrested, too. If there is evidence that Trump directed Giuliani to do this, then add another item to the articles of impeachment.
    The SDNY have some money trails to nail down.
    –A “Russian businessman” gave them $1 million to “attempt to gain influence and the appearance of influence with politicians and candidates.”
    –“Parnas gave $50,000 to support Trump’s election in 2016, and a pro-Trump super PAC reported receiving $325,000 last year from a company the two men incorporated.”
    –They gave $340,000 to a Ukrainian politician’s independent expenditure committees, which is probably not an American crime.
    –“Parnas received a $1.26 million wire transfer from an account whose owner was represented by a real estate lawyer who specializes in assisting foreign buyers of U.S. property,” and two days later a Trump super-PAC got a $325K check.
    As they say, follow the money. The irony is that, for all of Trump-Giuliani’s charges of alleged corruption by Biden, the finger should be pointed at Giuliani’s actual corruption and, by extension, Trump’s.

    Paul Montagu (88b43e)

  6. burisma doesn’t want any competition, after all prince albert’s sponsors that yearly shindig, and you’re all fine with that,

    narciso (d1f714)

  7. Paul,

    Stop spamming your own interests. It’s disrespectful to the blog and her writers. Use your own site for your interests.

    NJRob (16419d)

  8. Rent control is awful and stifles the market. One of my leftist friends who is a devout socialist loves rent control because he inherited his lousy apartment from his grandmother in nyc and is paying about 1/3 of the market price in his neighborhood. How is that justified?

    NJRob (16419d)

  9. Thanks NJRob.

    Paul Montagu, save that stuff for an open thread, OK?

    JVW (54fd0b)

  10. and they are going carbon free as much as possible, welcome Venezuela west,

    narciso (d1f714)

  11. that’s the future that awaits us, under your fave jww, warren mayor howdy, any other of the assortment from the house of conquistador,

    narciso (d1f714)

  12. Yes indeed, narciso. To the Democrats, especially Warren, there’s no problem that can’t be solved by lots of government regulation.

    JVW (54fd0b)

  13. I would add Venezuela with Bum Dumping… Nevada with Used Dope Needles… North Korea with Human Waste Sidewalks…

    Colonel Haiku (2601c0)

  14. so what do you do, it’s like being trapped in the thuggie temple, that’s the bullet we dodged here in florida with Gillum,

    narciso (d1f714)

  15. Gavin Gruesome… Gavin Threesome…

    Colonel Haiku (2601c0)

  16. That guy is such an asshole… IMHO…

    Colonel Haiku (2601c0)

  17. a rich punk, whose family provided vinyards to the gettys, who owned owned deep water explorer stock,

    narciso (d1f714)

  18. the skydragon is a fearful beast, and sacrifices must be made,

    narciso (d1f714)

  19. OT, but I have to mention it… late last night, my wife and I watched that South Park “Tegrity” episode about China… best thing they’ve ever done… but the one thing that had me laughing long after the end of the episode was Stan Marsh’s dad garroting Winnie the Pooh… when he was laying on his back strangling the Pooh and he turned to the camera with that madman look like Anton Chigurh had when he was finishing off the deputy at the beginning of “No Country For Old Men”… well, I just lost it. Still laughing about it.

    Colonel Haiku (2601c0)

  20. Paul Montagu, save that stuff for an open thread, OK?

    It’s what they do at Instapundit: Have a news blackout on unpleasant but important topics, and then the topic nannies show up.
    So my answer is no. It doesn’t breach the commenting rules, from what I can see. If this bothers you so much, then set up an open thread more often than once every four or five days. You have the keys.

    Paul Montagu (88b43e)

  21. @21 Paul, don’t be a jerk. There are several active threads where you comment would be on topic. As a regular on the blog I like being able to find pertinent information in the relevant thread.

    Time123 (af99e9)

  22. Then propose new commenting rules, Time.

    Paul Montagu (88b43e)

  23. So my answer is no. It doesn’t breach the commenting rules, from what I can see. If this bothers you so much, then set up an open thread more often than once every four or five days. You have the keys.
    Paul Montagu (88b43e) — 10/10/2019 @ 11:52 am

    So Paul gives JVW advice? Ok, so will I.

    JVW, Paul’s attitude needs correction, maybe you can give him a timeout.

    felipe (023cc9)

  24. @7/@9- There is an argument to be made for reasonable ‘rent control’ in congested metropolitan areas where new construction and associated infrastructure support is prohibitive. NYC… LA and so forth.

    But actually, the real ‘big story’ for most Americans was the ballpark bliss of Kendrick’s grandslam in 10th of Game 5 breaking that 3-3 tie for the Nationals, knocking the much favored and better-record-Dodgers out of the World Series race. The U.S. has been treated to some incredibly superb playoff baseball the past few days– with the added escape of ‘no-Trump-talk’ on their TeeVees for a few hours.

    All Trump and no play makes Sam a dull uncle.

    DCSCA (797bc0)

  25. @25. Postscript–my place in Playa Del Rey near LAX was ‘rent controlled’ for a time and it was a grateful restriction until the regs were modified permitting landlords to jump rents at a higher percentage an in shorter timespans. Salaries certainly weren’t jumping at the same rate. Without r/c, my commute would have had to have been much longer.

    DCSCA (797bc0)

  26. Paul,

    Claiming this site would try and block news that’s unpopular with Trump is absurd and just further trying to derail the conversation. It looks like you are trying to prevent people from discussing the cesspool California is willingly turning itself into by electing leftist politicians who enjoy cutting off their nose to spite their face.

    The rolling blackouts are next and are going to be even uglier.

    NJRob (4d595c)

  27. In deep red states the same thing happens only worse. This is the pot calling the kettle black.

    lany (2f7ff9)

  28. @21. Paul, this ain’t Instapundit. The story you referenced only broke a few hours ago and really hasn’t fully rolled out for a news cycle day; there’s still poop dropping on it.

    Knowing JVW, Dana, DRJ and P’s style and the time it takes to craft and quill a tight, comprehensive piece to post, they’ll digest it and get to it in time.

    They have real world lives to tend to as well, you know. Give it a rest and give them a break.

    DCSCA (797bc0)

  29. Cantafordya to keep the lights on.
    A state full of burn outs deserve the black outs.

    mg (8cbc69)

  30. @27. Yes– you know, after living decades back in the Northeast- NYC, Jersey, PA, etc., and moving here to CA 25 years ago, the tradeoffs have been interesting–no mosquitoes but more ants; no blizzards and more sunny weather– but little regular rain– until it all comes at once– and earthquake/wildfire concerns; more dependence on cars and higher gas prices, less access to mass transit…

    …but the curious problem of California power outages is definitely odd.

    A little wind and –whoosh– power goes out. Can count on it at least a few times a year as a matter of routine. That element of the infrastructure is definitely weak– and customers do pay fairly high power rates, too. Shutting off the power whn it gets windy to avoid starting fires will likely spark lawsuits instead. The utilities aren’t investing enough in upgrades. It’s just greed.

    DCSCA (797bc0)

  31. Caliunicornia Bum Explosion!!!

    Colonel Haiku (2601c0)

  32. Rent control, minimum wages and tariffs are just different variations of the same bad idea.

    Dave (1bb933)

  33. because people will die, Puerto rico was a macroversion of this

    narciso (d1f714)

  34. “As we walk amid the refuse, needles and excrement of the sidewalks of our fetid cities; as we sit motionless on our jammed ancient freeways.”

    — Victor Davis Hanson, a Caliunicornian

    Colonel Haiku (2601c0)

  35. and then you add election day registration, and your goose is cooked like foi gras,

    narciso (d1f714)

  36. Paul Montagu, I’m not a piano player with a large brandy snifter in which you can slip a few bucks in return for hearing a request. It just doesn’t work that way. My seven-year $300 million contract with Patterico includes not only a clause where I can void any potential trades, but also gives me leeway to blog about the topics that interest me. And sorry to break it to you, but if you’ve followed this blog for the last four years you might realize that I rarely post about President Trump, and even less often when there are complex legal issues involved, which frankly is the expertise of our host.

    Dana is taking the weekend off, and I will be lightly blogging, so you may well get your open thread. But don’t go telling us what to post.

    JVW (54fd0b)

  37. The rent caps are here to stay. Renters are not going to succumb to the National Review’s notion that life will improve if lessors can double their rent.

    Rent control has only tightened in NY for decades. Deferred maintenance, no upgrades, and old paint and plumbing are tradeoffs for a place an employed single person and their girlfriend can afford.

    SF lessors board up some newly vacant units rather than rent them, in the hope that when the building is vacant they can sell it or go to condos.

    Even Beverly Hills has some rent control (did you know that?) and many units show it: some units look as if they were last redone in the 50’s.

    But NY, SF and B Hills haven’t “seen the light” and demanded removal of rent control for a “free market.” People protected from rent increases won’t vote for removing the caps.

    California is going to be like Santa Monica, were renters outnumber owners. Rent control is sacred.

    Harcourt Fenton Mudd (0c349e)

  38. Harry Mudd, I don’t doubt that any of that is true. But it is also true that cities with rent control policies like Santa Monica, Los Angeles, Oakland, and San Francisco are lagging behind the rest of the state in creating new housing units. There are myriad reasons for this, obviously, but chief among them is that investors aren’t too keen on building apartment complexes if they know they will be subject to capricious rent control. Yes, the Costa-Hawkins law exempted units built after 1995, but note that the new law recently signed now affects units built up through 2004. That being the case, anyone who would deign to build an apartment complex in 2020 must figure that there is about a ten-year window in which to maximize return on investment, because after that the legislature will probably fold it under an expanded rent control policy.

    But you are right that this is the sort of bad policy that once enacted can almost never be repealed. When 2025 rolls around and we’ve only built around 350,000 (if even that) of the 3.5 million units that Gov. Newsom has targeted, imagine how that will lead to calls for even stricter rent controls. And so it goes.

    JVW (54fd0b)

  39. I not only live in Caliunicornia, after nearly 44 years of marriage, I just found out…

    https://youtu.be/a2h_6q9B0Go

    Colonel Haiku (2601c0)

  40. Rent control is a great issue for sifting the left from the right. Capitalism and free markets work. They always have. By allowing the government to interfere more and more with capitalism, we are slowly killing the goose that lays the golden eggs.

    People who defend rent control are fond of saying that renters just can’t afford a rent increase. First of all, “affording” it is often a subjective standard, as Dana noted above regarding the lady with two grown sons. Second, why do people think they have the right to live cheaply in an expensive area? If they find the rent too expensive they can take their asses to a cheaper location. One can’t have champagne taste on a beer budget.

    What’s next? Government caps on the price of gasoline? Oh wait. We’ve tried that before. It didn’t work out too well.

    norcal (eec1aa)

  41. another aspect was what happened to demi Lovato, all though that may be more of a ny thing, since she was made to renounce an aspect of her faith, couching it in a political objections, that’s even more distressing than hotel Venezuela electric boogaloo

    narciso (d1f714)

  42. Power still out. Went down to Roseville to pick up Pop’s ashes (he passed 2 weeks ago) and since no hurry to get home I stopped to see Once Upon A Time In Hollywood.

    Hopefully no offense to the off-topic police. It did all take place in the one-party state.

    harkin (b1a296)

  43. My condolences, harkin. I get those mailings from the Trident Society my self, like they’re trying to tell me I should be worried.

    I saw that flic a month or two ago… not a big Tarantino fan, but that was pretty good. Caught the vibe and the times pretty well, the commercials they were running and KHJ radio brought back pleasant memories.

    Colonel Haiku (2601c0)

  44. Rich people loved it when the rules were changed and massive illegal and legal immigration flooded California with new humans. Rents skyrocketed.

    Now Rich people are upset that the rules have been changed to cap their rents. Boo hoo. Why do you think the D’s supported all that immigration Rich guy? It was to make it a one party state and institute socialism.

    So sad for rich property owners. Tears coming down my face.

    rcocean (1a839e)

  45. As for “ignoring the will of the people” – Remember Prop 187? ‘member that Gay marriage thing? Only difference is its the legislature and not the judges.

    rcocean (1a839e)

  46. This is a winning issue for Libertarians. I suggest they run a candidate for Governor and make their main issue getting rid Rent Control. Suggested slogans:

    “Rents are too low – Let the Free Market work!”
    “Rich property Apartment owners are getting screwed!”
    “5%+ inflation is landlord slavery!”
    “Cheap Chinese Goods, High Rents, and More MS-13 Gang-members”

    They’ll win in a landslide.

    rcocean (1a839e)

  47. So sorry to hear that harkin,

    narciso (d1f714)

  48. So, rcocean, you’re clearly for high confiscatory tax rates on incomes over — oh, say — $1 million too, right? I mean it works along the same principles: why should the market dictate what a person earns when markets always turn out to favor a chosen few; far better that government set “reasonable” limits on income for the benefit of everyone. You’re on board with this, aren’t you? I mean you aren’t just a cafeteria populist, you subscribe to the whole agenda, don’t you?

    JVW (54fd0b)

  49. Well we know how it will be spun dont we, ending the penalty means 22 million will lose insurance or something.

    narciso (d1f714)

  50. I am not fond of the idea of rent control. However, at the same time I can see the other side as well. Most apartment complexes won’t rent to you unless you make 3x the rent. There are places where a 1 bedroom is 2,500 a month. If you have to make over 80,000 a year to afford a one bedroom apartment, there kinda is a problem. Apartment rents also never seem to go down, even when the economy and real estate markets have tanked.

    Nic (896fdf)

  51. The bad experiences my father had as a landlord – having a tenant’s boyfriend who was not on the lease tear his chopper’s engine down on the living room carpet in one of the units of one of his duplexes is just one example – and then eating one year’s worth of rent before he could get the tenant out, pretty much soured me on owning rentals. The judge gave a meaningless judgment in dad’s favor, and it was good luck, Charlie trying to collect monies owed.

    My sympathies are with the property owners… renters often have no respect for other’s property, let alone themselves.

    Colonel Haiku (2601c0)

  52. 51… if someone is in that predicament, they should find a less expensive place to live via relocation and job change, if need be. IMO.

    Colonel Haiku (2601c0)

  53. That would be 30k, which seems like a lot, but its the perverse incentives in certain local

    narciso (d1f714)

  54. Apartment rents also never seem to go down, even when the economy and real estate markets have tanked.

    It’s still an issue of supply-and-demand, though. I know that Gov. Newsom and his allies would argue that with the bill he signed yesterday the state is finally trying to do something about supply, but again, given the practical impossibility of building 3.5 million units in today’s California (for a variety of reasons) I think they are just blowing smoke up our rear ends.

    What I hate most about rent control is that the burden is almost exclusively borne by the landlords. If the state were halfway serious, they would couple the rent control bill with another one that exempts any rent-controlled building from having to pay property taxes. Let the state have some money in the game too and see how long the legislative fondness for rent control lasts.

    JVW (54fd0b)

  55. @55 It’s still an issue of supply-and-demand, though.

    I don’t know that it is, really, at least not in the less complicated sense. Operating costs on an apartment complex are much much much less than the rent that comes in, once the initial investment is paid off. It’s nearly pure profit in some cases, so landlords can eat a lot of empty apartments for a very long time before it becomes a problem for them.

    During the 2008 market crash there were a ton of empty parking spaces in the complex I was in, which indicates a ton of empty apartments and they got more empty because the complex actually announce a rent increase at a time when the mortgage for a 1600 sq ft house would have been the same as the rent for the smallest 2 bedroom apartment at that complex (I was in the process of buying at that point). They definitely did not drop the rent to fill the empties and, later, when the market started going back up they raised the rent by 33%.

    Nic (896fdf)

  56. “Apartment rents also never seem to go down, even when the economy and real estate markets have tanked.”
    Nic (896fdf) — 10/10/2019 @ 5:41 pm

    Nor does college tuition.

    High priced private colleges, who staff professors authoring papers on the benefits of price controls, always seem exempt from that solution.

    Munroe (53beca)

  57. OTOH, there seem to be a lot of people authoring papers on doing the equivalent of rent control on community college and nobody is trying to price control mansions.

    Nic (896fdf)

  58. Deep condolences, harkin. It’s a difficult time and intentional power outages don’t make it any easier.

    DCSCA (797bc0)

  59. So, rcocean, you’re clearly for high confiscatory tax rates on incomes over — oh, say — $1 million too, right?

    I’m not for “high confiscatory tax rates” on anybody but the rich should pay more and the poor less. Otherwise, you’re taxing the poor on a HIGHER percentage of their disposal income. Which is the only thing that matters. We have to pay taxes. And the Rich should pay more. And the poor less. It should be remembered that “The rich” that is people who were in the Top income tax bracket paid at a high rate for a long time.

    During the greatest economic expansion in American History from 1939-1975, the top rate was 70-90%. Reagan reduced that to 50% in the early 80’s. There’s no reason we couldn’t go back to a 50% rate on income over $1 million. AND get rid of the payroll cap for social security. Of course, rich people wouldn’t like that. But then they never do like paying taxes – they want the middle class to do it.

    rcocean (1a839e)

  60. Look if you’re a rich guy who doesn’t like to pay taxes or you own property and want to squeeze ever nickle out of your tenants than just be honest and say so. Stop with the silly nonsense about “Libertarian Theory” and “THE FREE MARKET”. Or about how we need to get “Government out of lives”, when its just Rich guys gaming the system to get more $$$ for themselves.

    I was perfectly happy with America circa 1984 with relatively low immigration and a reasonable tax system. But Rich guys gotta get richer. Don’t get between them and an extra dollar. $1 million, $5 million, $10 billion, its never enough. The Koch brothers devoted their lives to making more money for themselves no matter how much it screwed over any other American. Hey, open borders never hurt them!

    rcocean (1a839e)

  61. Yes but that wasnt the effective rate, because loopholes, the dems get in theyll tax any gain in a stock, a fee on any transaction bought sold or held, and every other nickel and dime, and theyll be very few loooholes

    narciso (d1f714)

  62. 54… it’s priorities. When my wife and I were younger, I got a promotion and a relocation from SoCal to NorCal. We had two toddler sons at that point. My wife had also been working outside the home at that point and we both wanted her to be able to be a stay-at-home mother to our sons. So, after renting a house two miles from my office for about one year, we made a decision to buy a house in a more affordable area, which allowed her to be that stay-at-home mom. It meant a 102 mile round trip commute for me each work day, but that was acceptable if it enabled us to do what we both wanted.

    Many people seem to think they need those two new cars every few years, buying daily lattes at Starbucks, expensive homes in high-priced areas, eating at restaurants two or three night a week, etc., etc.. It all adds up. And they wonder why even with two incomes, they can’t get ahead.

    Priorities.

    Colonel Haiku (2601c0)

  63. rcocean,

    If class warfare is your thing it would make more sense to support Elizabeth Warren instead of Trump.

    norcal (eec1aa)

  64. “It’s nearly pure profit in some cases, so landlords can eat a lot of empty apartments for a very long time before it becomes a problem for them.”

    It’s easy to prescribe what’s acceptable and/or not tooooo painful for the other guy, isn’t it.

    Colonel Haiku (2601c0)

  65. Well there is that, but have salaries really caught up to the cost of living. There is some headway, but still.

    narciso (d1f714)

  66. Exactly, Colonel. For many landlords, they barely break even while they’re paying off the mortgage on their rental property. It is only after the 30-year (or whatever term) loan is remitted that it becomes almost “pure profit”. If I had to wait 30 years for an investment to generate income, it better be a LOT of income.

    norcal (eec1aa)

  67. @65 If you read lower in my comment, you’ll see that I’m speaking about what I saw. If it was too painful, they’d have lowered the rents slightly and filled those empty apartments.

    @68 Probably for landlords with individual houses or duplexes or even 4 plexes, but I’m talking about all those large corporate apartment complexes that have 50, 100, 200+ units.

    Nic (896fdf)

  68. Here is another unwarranted interference by big government on business operations. County assessor paul petersen ( R-maricopa county ) Has been arrested for child trafficking and selling babies to mormons for $25,000 dollars each. He said he got the idea when he was on a mormon mission to girls in the marshall islands. His attorney says he is just a capitalist free trader businessman moonlighting a side business because of the low public salary he is paid for his elected office. Capitalism in action!

    lany (0c7c9e)

  69. On and ham radios are a luxury, according to the atate of california

    narciso (d1f714)

  70. Not only have they replaced the electorate, narciso, but also the Weird Al designate:
    http://www.youtube.com/channel/UCusL6VaFS6_4fPQfur-glNQ

    -not that I’m complaining!

    urbanleftbehind (5eecdb)

  71. 69… a single person with no dependents who works in the public sector should be able to do without a paycheck for 6 months a year without feeling much pain.

    Colonel Haiku (2601c0)

  72. but I’m talking about all those large corporate apartment complexes that have 50, 100, 200+ units.

    Hunh? You think that they get built for free? Even if they don’t borrow the money to build them (and they usually do borrow), the money they spent building these complexes is not returning an income somewhere else.

    Let’s say a company has $100 million. Parked in conservative investments it might be returning $5 to 10 million a year. If you use it to build 300 apartments, which you rent for $3000 per month, you get … $10 million a year from rents, less expenses, depreciation, vacancies, etc.

    That rent money is not “pure profit” as it is really not much better than what you had when the building capital was parked in the hedge fund.

    If instead you are leveraged and you borrow that $100 million, you have interest to pay instead. It works out about the same.

    tl;dr — unless money literally grows on trees, there is no such thing as “pure profit”

    Kevin M (19357e)

  73. If only there was a viable opposition party in CA; one that actually cared about getting elected.

    Kevin M (19357e)

  74. Yeah, if only…

    But the craziness isn’t limited to Caliunicornia… https://www.zerohedge.com/political/city-diversity-meeting-ends-chaos-white-males-banned-speaking

    Colonel Haiku (2601c0)

  75. @75 They start by charging enough to pay off the loan and gain a profit. After 15 years or so they’ve paid off the loan and raised the rent a number of times and the upkeep on the complex won’t be anywhere near the initial investment and is fairly negligible at that point. They then make a hell of a lot of money on that complex with fairly few expenses.

    Nic (896fdf)

  76. Nic,

    If the landlord is charging too much, then another landlord will undercut him/her on prices. That’s how the free market works. Are you alleging price-fixing by all the landlords out there?

    norcal (eec1aa)

  77. @79 Go to apartments dot com and price out apartments some time. I don’t know if they are price fixing, but the costs to rent similar apartments in the same place do tend to be similar.

    Nic (896fdf)

  78. 79. It costs money to move; people have kids in school; they work near where they live. Even a “Mittens is a wimp” person like me has great sympathy for people who live in a place for 5 to 10 years, to find the market engulfing them, esp when they’re old.

    The best idea since people tend to support this, is to give renters a tax deduction like owners get. Maybe when they’ve lived in once place five or more years. Or ability to avoid taxes on social security. But its not quite right to say “move old timer!” We capped prop taxes for owners in Prop 13. Renters ought to get “something” too. Just not entirely at the expense of the lessor/owner.

    Harcourt Fenton Mudd (0c349e)

  79. A great illustration of what is wrong with California is the type of press conferences we get when there has been a catastrophe. First responder unions pack the stage with their favorite endorsed politicians and they all indulge in a bunch of self-congratulatory nonsense before telling the people effected by the fire, flood, whatever, how things are going and whether their home is still standing. The people want to hear about their home, and evacuation status, not a bunch of grandstanding.

    Another illustration is the PG&E power outage problem… where did the money for infrastructure protection go? Spent on the unions, wasted on green initiatives. Taxes, fees etc are slapped on the rate payers in small increments and the money goes everywhere but to the core role of a public electrical utility… bringing the most cost efficient power safely and reliably to the consumer.
    California “leads the way” on electric cars, but the power grid that charges these cars can’t handle a stiff wind anymore and people who rely on electric cars are going to need their own vast solar arrays or ironically maybe even a nice diesel powered generator

    steveg (354706)

  80. I should have said batteries. An electric car takes 34 kwh to go 100 miles, most battery arrays store 50. Everything plugged in adds to that.
    Fortunately, weather events here that will cause an outage tend to also produce sun (and wind if your neighbors will let you install a tower). Unfortunately, they also can produce high temperatures and air conditioning uses 3.5kwh per hour.

    steveg (354706)

  81. ^^^what steveg said^^

    Lived here for 63 years, that will soon change.

    Colonel Haiku (2601c0)

  82. California is leading the way, it just isn’t in the direction politicians assure us we are headed. We are not headed forward, we’ve got the water turned off, power turned off like we are in small-town Honduras. We’ve got middle ages sanitation issues and middle ages diseases.
    Solutions involve 19th-century technologies like trains, bicycles, windmills

    steveg (354706)

  83. So the fall of Ca is just the latest of all fallen civilizations. Maybe the fall of Pompeii could have been prevented by sufficient taxation, or maybe they all should have just moved farther away.

    felipe (023cc9)

  84. 85… you’d think that more of our current residents would be bothered by this and making noise – I know most private sector employees seem to be – but maybe it will take an uptick in calamities and Python-style “bring out your dead” wagons being pulled along residential streets to awaken the public sector?

    Nah…..

    Colonel Haiku (2601c0)

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