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San Francisco ’ s chief economist wrote :
“ By tying future office development to an affordable housing target that the city has never met , the … measure is likely to lead to high office rents , reduced tax revenue , reduced incomes and reduced employment across the city ’ s economy .”
But that didn ’ t stop San Francisco ’ s voters . It is indubitable that Adam Smith is not taught in their schools . The invisible hand , as put forth by Adam Smith ’ s “ The Wealth of Nations ” in 1776 , describes the unintended social benefits of an individual ’ s selfinterested actions . If the market needs affordable housing and the government gets out of the way , affordable housing will be built . But government in San Francisco and in California are in the way . Some find it very easy to dismiss the ancient teachings of Adam Smith , but in doing so , they never fully and critically examine why affordable housing is not being built . Virtue signaling is so much easier . It is certain that this new measure will only further clog the natural arteries of commerce .
The state of California has also inserted their own very visible hand into the real estate market . State wide rent control has arrived .
● Properties older than 15 years are limited to annual rent increases of 5 % plus an inflation rate or 10 %, whichever is less . Owners cannot raise the rent above the new limits to cover capital improvements on these older buildings , which means the Golden State will now shine with deferred maintenance .
● The new California law also restricts landlords ’ ability to evict tenants . If a tenant has occupied a unit for at least 12 months , evictions can be for “ just causes ” ( where the tenant is at fault ) and a limited number of cases where they are not at fault ( such as the owner moving in or taking the unit off the market ).
● When evicting any tenant , a landlord must now provide written notice and state whether it is an at fault or no fault issue . If there is no fault on the tenant ’ s part , the landlord must provide one month ’ s rent money to cover the tenant ’ s relocation expenses .
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