Seems like rent controls are the issues. Causing markets to be inefficient. No surprises there. Get rid of them and maybe supply increases as it can better match demand and capability of renters to pay.
Markets are not a magical oracle of true value though, especially in our current, deeply distorted economy which has the rich gobbling up assets and increasing prices well beyond any livable standard, which is the point of TFA.
Isolating price controls as some kind of glaring inefficiency in an otherwise rational system sounds like ideology, not reason.
It should be manifestly clear that an unregulated market has not served us well for the issue of housing, not just for the indigent but for all non-wealthy individuals and families who spend well over 50% of their income now on rent or mortgage payments.
Attacking rent control in isolation is irrational. Yes it can create a bad situation for landlords in the absence of any other policies designed to mitigate the disaster we are in. But saying that "market efficiency" is the answer is just sticking your head in the sand.
In a world w/o rent control, how do you imagine things playing out here? If the landlord lowered rates now and got tenants (without rent control), then demand rebounds, does the landlord then increase the rent again? Wouldn't that put a lot of the new lower-rent renters back out on the street?
Anyway, the OP's point stands: there are perfectly good homes going empty. They aren't out in the woods. They are right here in SF.
Yes, terminate the contract according to local regulations. Rent again for higher price. Then those who can't afford would need to either move out to cheaper regions or find ways to pay the correct market rate.
That seems like it would make for a pretty precarious living situation for people who can't find ways to pay the correct market rate, eh?
The bottom line (no pun intended) is that the corporation that owns Park Merced has (presumably) done the math and they expect to make more money by keeping the apartments empty and eating the losses now (and paying the overhead of evicting gangs of squatters) so they can rent them later at the "correct" market rate (a pretty likely speculation, I'll grant them) than by renting them at a market rate that fills them up again now and getting locked in to rent control at the new, lower rates later on.
So, in other words, the poor people can't live there because someday soon the rich people will almost certainly want to live there again.
What you suggest would instead let the poor people stay in the apartments until the rich people wanted back in, so I guess that's an improvement?
But I don't follow how getting rid of rent control would incentivize supply increases?
> But I don't follow how getting rid of rent control would incentivize supply increases?
Leaving units empty, or locked into lower-than-market rates are going to reduce the average profitability of investments. Investment in new units is in part a function of how profitable they will be sell, or to rent out.
But honestly the incentive for bay area real-estate is there, what really is needed is the ability to build with fewer encumbrances.
> That seems like it would make for a pretty precarious living situation for people who can't find ways to pay the correct market rate, eh?
Yes, this is generally referred to as gentrification. But, renting, even to poorer people, nevertheless is still usually profitable, albeit with more risk requiring a larger portfolio.
