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2018 October 22

Rent control and Costa-Hawkins Act

Filed under: Uncategorized — gasstationwithoutpumps @ 20:19
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In Santa Cruz, the most contentious thing on the ballot this November is rent control.  There are two relevant initiatives:

  • Proposition 10, which would repeal the Costa-Hawkins Rental Housing Act and put in its place a rule that cities and counties can pass whatever rent-control rules they want.
  • Measure M, which would affect only the City of Santa Cruz and institute the strongest rent-control and eviction rules in California.

I’m neither a tenant nor a landlord, and not likely to become either in the next 20 years, so the changes to the rules don’t directly affect me.  That means that I’ll be basing my votes on what I think will be best for the community as a whole, rather than for any personal benefit.

I don’t particularly like the Costa-Hawkins Act, which prohibits any limitation on rent increases between tenants, prohibits rent control on anything built after 1995, and prohibits rent control on single-family housing.  Those are all a bit too strong, and I think that Costa-Hawkins needs to be weakened.  Here are some ways that it could be improved:

  • The “built-after-1995” rule was intended to give developers an incentive to build new rental units, by letting them get market rate for new construction.  We do need some such incentives, because housing construction has not kept up with demand—the incentives for building rental housing are too weak.  But I don’t see that the incentive needs to last forever.  It would be better to say that rent control can’t be imposed for the first 20 years after construction—that would give builders all the incentive they need (since the return on investment is generally calculated based on 20-year amortization), without preventing rent control on units that have gotten old.
  • Single-family houses are often rented out by people who only have the one house, but need to live elsewhere for a while.  Allowing homeowners to rent out their residence at market rate while they are away seems fair.  But large landlords and speculators who have bought up many houses (particularly during the foreclosure crisis) shouldn’t be getting such a sweetheart deal.  Perhaps Costa-Hawkins could be rewritten to distinguish between small landlords (owning say 1–5 units) and large landlords, restricting rent control on small landlords but allowing it for large landlords.
  • One of the best ideas I’ve heard came up at an election-discussion party I went to last Saturday (I forget whose idea it was): any landlord could make an arbitrary increase in rent by having the property reassessed for property taxes at its current market value.  If a landlord wants to increase rents faster than 2% a year, they should be willing to let their property taxes go up also.  This would be a win for the cities also, as they would get a substantial increase in property tax (many of the older properties are paying essentially no tax). Of course, this requires some tweaking of the rules of Proposition 13—but I don’t think that there is anything there that would prohibit voluntary reassessment of property.

Unfortunately, if Proposition 10 passes, these reasonable measures could not be enacted by the legislature, because the proposition doesn’t just repeal Costa-Hawkins, but puts in place restrictions on what the legislature can do in the future.  So I’m voting against Proposition 10, even though I think that Costa-Hawkins does need to be fixed—the initiative process is just a horrible way to write legislation.

Measure M, which would institute a rather draconian form of rent control in Santa Cruz, is one I’m definitely voting against.  It will benefit a few long-time renters in Santa Cruz, but it will be disastrous for the rental housing market. The eviction rules, which make it very expensive for landlords to get rid of tenants at the end of a lease make it difficult for people to rent out their own homes if they have to be somewhere else for over a year.

Many of the rental units will be taken off the market if Measure M passes (and even more if both Prop 10 and Measure M pass). Already one of the long-term rental units on our street (a rental for at least the last 25 years) has been sold this fall, in order to take it off the rental market.

Right now the price/rent ratio in Santa Cruz is high (26.4 based on the Zillow estimates for the value of my house for sale and Zillow estimate of a year’s rent) and limiting rents will make it higher, so that there will be substantial incentive for owners to sell rather than rent out property that they are not living in. The result (if Measure M passes) will be a substantial reduction in the rental housing market in Santa Cruz.  Many of the students will have to move outside the city, resulting in much higher traffic also.

Once again, I think that reasonable rent control could be enacted, but Measure M was created to move all the power into the hands of the tenants, rather than striking a balance.  I again think that it would be valuable to distinguish between people who own a house and want to rent it out while they have to live elsewhere, or who have an accessory dwelling unit in their yard, or who live in one unit of a triplex and those landlords or corporations that own apartment complexes or large numbers of houses.  The tiny landlords can’t set the market rates—that is done by the large landlords, and it is the large landlords who need to have controls put on their greed.

I was a little surprised at the election party that all the attendees, who are some of the most progressive people in Santa Cruz (the Leftmost City) were going to vote against Measure M. Almost everyone supported some form of rent control, but felt that Measure M was going to be bad for most of the renters in Santa Cruz, as well as for all the landlords.

Actually, the only large group people who will benefit from Measure M are the gentrifiers who come in and buy up the rental property to convert to owner-occupied homes.  A few long-term renters whose landlords decide not to sell will have some guarantees that they will see only tiny rent increases.

 

 

2016 September 24

US News covers UCSC referendum on athletics

US News and World Report wrote an article,So Long, Banana Slugs? Students Cry Foul About Paying More for Sports, about the UCSC student vote last year on funding athletics.  In it they pointed out that athletics does not really benefit universities:

And while administrators often say athletics benefit their universities—and 77 percent of Americans in a Monmouth University poll said they thought big-time programs make “a lot of money for their respective schools”—the NCAA itself reports that only 24 of its 1,200 member schools take in more than they spend on sports. Even after broadcast rights, ticket sales, sponsorships, sports camp and investment income is taken into account, colleges have to subsidize a median 27.5 percent of athletic spending, much of it from student fees, the AAUP says.

“The fact is, all the data shows that many of the purported academic benefits of sports—recruitment, prestige—have all proven to not be true. They don’t exist,” Tublitz said.

One of the things that I like about UCSC is that sports is a participatory activity, not a spectator activity. A lot more students are involved in intramural sports and in individual fitness activities than bother watching the 250 or so varsity athletes, who the university has been subsidizing at a rate of $1million a year. I’m pleased to see that the national press is noticing that the subsidy of athletics by universities makes no sense, and that UCSC has an opportunity to be a leader in turning their back on this nonsense.

I’ve posted on this topic before: I’m proud of UCSC undergrads, Sports at Any Cost, and Not so proud of UCSC undergrads this year.  I am hopeful that students will realize that subsidizing a couple hundred of their fellow students to play for them is not nearly as valuable as playing themselves—that they are better off taxing themselves for equipment and facilities that all students can use than for special services (coaches, trainers, transportation) for just a few.

I also hope that the UCSC administration comes to its senses and realizes that students are having a hard time getting into the classes they need, because of all the growth in student enrollment without a corresponding growth in instructional resources, and that the $1million dollars a year they pour down the athletic drain  could be used to provide more classes.

That $1million would pay for about 100 more courses taught by lecturers, or 40–50 more taught by tenure-track faculty, about 40 more TA sections.  (Surprisingly, TAs cost departments much more than lecturers, because departments have to pay the tuition for TAs, which get recycled back into other things—like subsidizing athletics, probably.)  The money would benefit about 3000 students a year, rather than the under 300 who benefit from athletics subsidy.

I think that it is past time for UCSC to leave NCAA sports and return to having just club sports, as they did when I first started teaching at UCSC 30 years ago.

 

2016 June 1

Poll data and electability

Filed under: Uncategorized — gasstationwithoutpumps @ 19:03
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I’m a bit worried about the possibility that Donald Trump might win the Presidential election.  I don’t personally see how any sane person could vote for him, but US politics never seems to have been ruled by sanity.

I was looking at the poll summaries at RealClearPolitics:

I hope that the “superdelegates” at the Democratic national convention are watching these polls also and doing everything they can to make sure that Trump is not elected, even if it means that their favorite candidate doesn’t get the nomination.

2016 May 26

Not so proud of UCSC undergrads this year

Last year I wrote a post, I’m proud of UCSC undergrads, in which I praised UCSC undergrads for rejecting a fee to subsidize the approximately 250 Division III athletes on campus:

  • Measure 62. Athletics Operations Enhancement Fee: Shall the undergraduates of UCSC provide funding for the operations for Intercollegiate Athletics by implementing a compulsory fee of $117 per student, per quarter, starting in the fall of 2015? FAILED: 60.33% No, 39.67% Yes.

This year, I’m not so proud of the students. After enduring an unrelenting propaganda barrage by the athletics staff, the students voted on an opinion poll that just allows them to vote on a fee measure next year:

Would you support a new student fee of approximately $90 per quarter ($270 per year) to retain the current NCAA Athletics program at UC Santa Cruz?
Votes Percent
Yes 3976 63.53%
No 2282 36.47%
Total Turnout 6258 40.89%

[http://deanofstudents.ucsc.edu/elections/]

On other parts of the ballot, the students voted overwhelmingly to support fees for maintaining the Office of Physical Education, Recreation, and Sports (OPERS) facilities (about 80% in favor of each of two measures), which I approve of—these are facilities open to all students and which encourage students to participate in physical activity, both individual exercise and social team sports.

I’m not so happy with their theoretical support for subsidizing elite athletes—I have no patience for spectators—sports should be something students do, not pay to watch other people do. In the past UCSC students understood this distinction, with the result that intramurals were far more important to students than interscholastic sports.  When I came to UCSC, 30 years ago, there were no NCAA Division III teams—all sports were intramurals or club sports, and students recognized that participation in sports was something one did for pleasure (and paid for, if needed), not something that was a “service” or for the benefit of others.

It makes sense for students to pool their money to pay for services and facilities that many will use, but not to pay for coaches, trainers, and separate locker rooms for the varsity teams (who make up less than 2% of the student body).

I have been bothered by the Admistration’s $1 million a year subsidy for NCAA athletics for the past couple of years (and for next year). That money could have paid lecturers for about 100 more courses, benefiting several thousand students who can’t get into the courses they need.

I was very bothered by the Academic Senate’s response to this boondoggle, actually encouraging the Administration to continue pouring money into something that really has no reason for existing at UCSC, when basic needs like adequate classroom space and sufficient faculty and TAs to reduce classroom sizes are not being funded.

Oh, well, maybe the students will come to their senses when the athletes actually ask for money next year, as they have done in prior years.

(All that said, the UCSC student elections look much more reasonable than the dysfunctional student government at UCSB, which seems to consist almost entirely of political infighting, if the UCSB student newspapers are to be believed.)

 

2015 December 24

Sports At Any Cost

In November 2015, Huffington Post had an article, Sports At Any Cost, about the ridiculous amounts some colleges are spending on intercollegiate athletics:

A river of cash is flowing into college sports, financing a spending spree among elite universities that has sent coaches’ salaries soaring and spurred new discussions about whether athletes should be paid. But most of that revenue is going to a handful of elite sports programs, leaving colleges like Georgia State to rely heavily on students to finance their athletic ambitions.

They included a list of some of the most outrageous subsidies in collegiate sports, where the college is pouring millions of dollars into propping up their semi-pro athletic departments—money extorted from the students (student fees) or diverted from educational purposes (“institutional support”).  Note: these figures aren’t for intramurals or recreational facilities used by all students—just for the team athletics.

Some of the worst offenders are state schools.  For example, University of California, Riverside comes 7th on their list, with 87% of the athletics budget being subsidized ($67 million out of $76 million for a 4-year period), with 32% of that being student fees and 68% being institutional support. This comes to each student paying (through fees and diverted general funds) about $3656 over four years to support the UCR athletic teams.

The measure they sorted on (percentage of the athletics budget that is subsidized) is not the right one—what matters more is the subsidy per student.  If the athletics budget is tiny, it doesn’t matter if it is 100% subsidized, just as other entertainments on campus are subsidized at low levels.  What matters is the subsidy per student, by which measure UC Davis is doing even worse than UCR with a subsidy of $114million out of $144million (79%), or $4411 per student.  Other UCs on the list include UCSB ($3171/student), UCB ($1852), and UCI ($2694).

UCSC doesn’t make the list, because we have no Division I teams.  There has been some institutional subsidy of our Division III athletics (I estimate under $100/student), but that was a one-time administrative grant to give the athletics department a chance to convince the students to assess themselves a fee to support the teams.  So far the students have wisely resisted this, though they have been supportive of fee measures that support all students (not just elite athletes).  The fee that the athletics department tried to get passed was $117/quarter, which would be a subsidy of $1404 over 4 years—less that many of the other UCs but still far more than the entertainment value of the sports teams. I suspect that if the Office of Physical Education, Recreation, and Sports had floated a fee measure to increase the intramural program, buy more recreational sports equipment, or fund more surfing and scuba classes, the students would have passed it—it isn’t an aversion to the activities, but to the subsidy of a few “elite athletes” that is anathema to UCSC students.

I’m hopeful that UCSC will exit Division I this year, returning to having only club sports (as they did when I first came to UCSC) and intramurals, in which all students can participate.

I have spent significant time on  sports-mad campuses (I was an undergrad at Michigan State and a grad student at Stanford), and I’m convinced that UCSC has a much healthier attitude towards sports and exercise than those colleges. The value of sports in college is in the exercise and practice at cooperating in teams, which is best done by maximizing the participation (intramurals) rather than by subsidizing a small number of elite athletes as entertainers.

 

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