Chris Daly: Destroyer of Cities

I must admit I’m in a bit of shock that I haven’t written about San Francisco Supervisor Chris Daly up until now. The man has been bent on destroying San Francisco for years, and his half-witted way of thinking about things causes him to spew forth some of the worst policy recommendations imaginable.

Maybe it’s because there’s so much competition to shred this jerk. Places like Chris Daly Sucks or The Daly Show are blogs entirely dedicated to slamming this regressive element of San Francisco politics. There’s just so much material out there it could fill a book.

And so, not wanting to miss out on the juicy gravy train people like Daly create for pissed off bloggers, I launch Chris Daly: Destroyer of Cities, the first installment in what will undoubtedly be an ongoing series about this boob. Today we’re going to talk about Daly’s latest plans to make San Francisco uninhabitable to landlords and renters.

Daly. So. Awful. Where. To. Start?

Why this issue? It’s kind of hard to know where to start when dissecting Chris Daly (oh, if that only were a real option…) so I’m just picking chronologically.

Everybody seems to hate Daly. His policies are so bad that they harm everyone who makes more than $50 a year and is employed for more than 10 hours per week. His quest seems to be to turn San Francisco into some sort of post-Armageddon-like shell where the homeless are kings of the fetid ruins that once held families, businesses and parks. Politicians of every political stripe have disavowed their relationships with him to the point that for a while there were multiple different groups within government trying to get him recalled.

And yet, somehow he survives. My guess is that his continued staying power owes much to occult rituals involving the crushed bones of babies borne from landowners or businesspeople, which he uses to formulate some sort of Supervillain Populist Power supplement.

‘I’ll grind your property to make me bread’

Which brings us to the issue at hand - Daly’s latest measure, ostensibly designed to help renters, is actually just his latest vindictive attempt to punish landlords, and will have the effect if enacted of hurting both groups.

There are three parts to his “plan”:

1. Making it impossible for landlords to raise rents above 33% of a tenant’s monthly income.
2. Allowing renters to bring in roommates at will to offset rental costs
3. Disallowing “banked rent increases”. These occur when a landlord doesn’t raise rents by the allowable per year rate under San Francisco’s rent control laws, and then used these “banked” increases to raise rents more substantially several years down the line.

On the surface, these seem like they will all help renters out. In reality, here is what the effect will be:

1. Landlords will instate far more rigorous background checks on renters, and increase the minimum economic qualifications necessary to rent from them. I’m not a landlord in San Francisco, but were I to decide to rent out my home I would no longer accept applications from those where rent would take up 35% of their income (conservative estimates for how much someone should pay in rent as a percentage of income) and instead would only accept applications from people where rent would be no more than 20% of their income. As a landlord, this would help protect me against Daly’s punitive law because I’d know that if my tenant had to take a lower-paying job in harsh economic times (like now) I’d be less likely to have this trigger kick in and force me to reduce rents to a level where I would lose my property.How does that translate? It means that landlords will price out the lowest-income renters, the very people that measures like this theoretically are supposed to help. Someone who barely qualified to rent from me before wouldn’t qualify at all now.
2. “But wait,” Daly’s minions will snarl, “the economy is bad and landlords can’t do that! They’ll be forced to take whomever wants to rent from them in this shithole of an economy even if they can’t afford to.” To which I would first respond with thanks that the minions are being honest enough to admit that they’re trying to screw landlords when they are most vulnerable, rather than protect tenants. Secondly, I would state that they’re right. Many homeowners and landlords won’t be able to fill vacancies with high-income tenants. But even so-called Progressives must realize that the Obama Free Money for Scofflaws campaign won’t last forever, and since most landlords can do simple math, unlike the minions, they’ll see that this means they simply cannot afford the risk of renting their units. And so, instead of irresponsibly renting to someone that can force them into foreclosure, they’ll simply sell their property to someone else. If they’re homeowners considering a move, they’ll either stay put, or sell their property.Because of the draconian new rent law, the new buyers will skew heavily to people who have no desire to rent property either. They’ll be buying homes for themselves. And this will reduce the pool of rentable units, which will drive rents up, and ensure that only those with high incomes can rent the remaining inventory of units. Just like rent control itself, this will accomplish exactly the opposite of what it is supposed to…it will make renting in San Francisco less affordable.
3. With regard to the squatters provision, i.e. the “you can sublet my property to whomever you want without my approval as landlord” provision, there will be less that landlords can directly do to protect themselves against this. Certainly, it will increase profiling to the greatest extent allowable by law. I’m not talking racial profiling here, by the way. I’m talking about the fact that I certainly am not going to rent my property to some 21 year old fresh out of college who is going to turn my property into a god-damn frat house, so you better be worried if you aren’t a 50-year old woman and you want to rent from me. But landlords also know that sometimes that 21-year-old guy turns out to be a friendless engineer from MIT, and sometimes that 50-year-old woman is going to import her family of 15 plus their goats from Latvia and move them in to the spare bedroom, so there’s no real way to profile this element out of the equation.So what will they do to protect themselves? You’ve got it. Raise rents. Price their property in a way that there’s a little extra left to skim off the top every month to set aside to replace the carpets when the tenant moves out. Delay maintenance, allowing increasingly slumlike conditions to develop before sinking money into renovating the property for an existing tenant, since there’s no way to know when the rest of the sorority is going to be moving in, plus the mariachi band Sally met last month. Don’t think the market will bear this? It will, because every landlord will be facing the same situation.
4. The “banked increase” element will be the easiest for landlords to compensate for, and ironically it’s this provision that betrays Daly’s ‘plan’ as nothing more than a self-serving power grab of political expediency. This guy doesn’t care about renters, he only cares about keeping his job by doling out as much populist propaganda as he can. How’s this for proof?Let’s say I’m Joe the Landlord. San Francisco rent control says I am only allowed to raise rents by a meager amount every year. But now, they also say that if I don’t do that each and every year, I never can. So if I don’t raise your rent by $50 this year, then I haven’t lost that rent for another 12 months, I’ve lost it forever. If you decide to rent from me for 20 years, I’ve really hosed myself.Simple answer….I’ll just make sure to raise your rent every single year, come hell or high water. Bad economy? Go eff yourself. Chris Daly says I have to raise your rent again this year. Lost your job? Go bitch to Daly, I can’t afford to not raise your rent. Sob story about your spleen operation? Too bad. I might have delayed your rent increase in the past, but now Chris Daly won’t let me do that. Welcome to the world of annual rent increases, folks.

Economics. Dry, Boring, and Important

There’s a reason why very few cities have rent control laws, and it has nothing to do with the power of landlords. It’s because it doesn’t. freaking. work. To understand why only requires a basic understanding of economics. It’s supply and demand.

Demand for housing in a place like San Francisco is always high. It forces landlords who remain to dramatically raise rents when there are vacancies, knowing that they will not be able to do so again until they have another vacancy. And rent control decreases supply, because it makes fewer homeowners economically capable of becoming landlords. This drives rents up as well.

The worst part is that the snarling minions are right - for a lot of landlords, they won’t be able to economically cope with an even more punitive environment, and they won’t be able to sell in this market, and that will create vacancies of a special type. Abandonments and foreclosures.

The cycle continues until you have a very small number of very expensive rental properties….and a whole frickin boatload of slums.

Look at Chicago. Look at New York. Look at Hunters Point. Rent control doesn’t work.

Additional rent controls like Daly is proposing will make it work even less. Except perhaps to the one group that Daly champions more than any other. Put his ideas into practice in current economic conditions and what you’re going to see is a lot of totally free rent…in the abandoned shells of what once were apartments.

Daly’s not stupid, so he must be evil

A lot of people look at Daly’s dopey face and listen to his insane ideas and think the man is an idiot. He most certainly isn’t. He’s kept himself afloat despite near universal opposition in the rest of the political community, and he keeps getting re-elected despite a general consensus that he’s a city destroyer, not a community builder.

How does he do it? By resorting to the most aggressive use of political expediency. The same way Hugo Chavez stays in power in Venezuela by doling out cash after cash after cash from oil sales to the poorest among the citizenry…with great fanfare and cheer until the money dries up and everyone realizes he bought them for six months to stay in power even though he ruined their future for 20 years by not investing in their communities and progress.

Progressive indeed. Regressive is more like it.

Who’s to blame? You are.

Here’s some simple math. There are more renters than property owners in virtually every city that isn’t populated exclusively by the wealthy. Wouldn’t there be rent control everywhere if it really provided benefits to renters?

There’s a reason why economists believe rent control “reduces the quality and quantity of available housing” by a factor of more than 10 to 1. Every renter in SF who has had your heat go out for weeks, or whose carpet wore through 8 years ago, already knows what the effects of rent control are.

They’re just blaming the wrong people for it.

I’m guessing Daly knows that rent control backfires, and that his new plans will backfire too. He simply can’t be that unknowledgable.

So what’s his angle? What it always is. Expediency. Remember that Steve Balmer video where he’s chanting “Developers developers developers developers!” I’ll give anyone who makes me a decent one of Chris Daly doing that to a chant of “Expediency expediency expediency expediency!” a hundred bucks (seriously), because it would sum up exactly what this guy is about.

Selling you a dream of something better even as he makes it impossible for you to ever achieve it.

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