Vote No On Prop 98 (Los Angeles, San Diego: low income, rental, appliances)

[prim2007]

Originally Posted by motoman

Here is a very simple example of how those under rent control are being subsidized by those not under rent control.

Let's say you have a property with 2 units. One unit is under rent control, one is not.

Let's say the property owner needs to charge an average of $1,000 per month for both units to cover expenses and make the desired return on the investment.

If the unit under rent control is only paying $500 per month, that means the poor sap renting the other unit has to pay $1,500 per month.

So let's assume the person paying $500 per month can only afford that, and no more. What that person is doing is relying on a subsidy from the "rich" person willing to pay $1,500 per month. Charity, if you will.

Were rent control removed, a landlord could charge just $1,000 per month for both units and make the same money.

He/she would only be able to charge $1,500 for both units if there were two people willing to pay $1,500. If not, then the price has to come down until supply meets demand. Basic economics.

Because the person paying $500 per month could not afford $1,000 per month, with rent control they are creating artificial demand, because at $1,000 per month they would not be demanding that apartment, they would move somewhere else.

What rent control has done for LA is cause "squatters", if you will, to artificially increase the demand for housing, increasing the costs for everyone. More demand given the same supply means a higher price.

Take away the rent subsidy (rent control) and you immediately reduce the demand for housing. Reduce the demand for housing and what happens? Prices come down.

I don't know about you, but I'm all for lower rents.

For those of you arguing that all rents would go up, what you are arguing is that demand would not change. If demand would not change, then what you are saying is that all people currently under rent control could afford to pay more but prefer to be subsidized by the rest of us.

If you are arguing that everyone should have access to cheap housing, regardless of at what expense to anyone else, then you need to move to a socialist country.

Great illustration. Lets use another illustration involving an employer/employee. Lets say an employer responds to one employee's demand for a higher salary and the employee eventually gets a 30% raise, an amount that causes the employer to max out their budget. If the employer pays anymore in salary expenses, they would not make any money. Because of this, the employer tells you, your salary will need to be frozen to accomodate the higher salary they had to pay the other employee. Would you be okay with this? If not, why do you think having a fellow renter living in an equivalent apartment should pay significantly more than you. It's the same concept, one is subsidizing another. If you agree that companies can make a profit, why can't landlords? They are a business too.

[SandyCo]

Originally Posted by prim2007

Great illustration. Lets use another illustration involving an employer/employee. Lets say an employer responds to one employee's demand for a higher salary and the employee eventually gets a 30% raise, an amount that causes the employer to max out their budget. If the employer pays anymore in salary expenses, they would not make any money. Because of this, the employer tells you, your salary will need to be frozen to accomodate the higher salary they had to pay the other employee. Would you be okay with this? If not, why do you think having a fellow renter living in an equivalent apartment should pay significantly more than you. It's the same concept, one is subsidizing another. If you agree that companies can make a profit, why can't landlords? They are a business too.

I only have one problem with that. What the landlord is calling a business investment as he's perusing his profit and loss sheet, etc. is a renter's home.

If this proposition passes (and I'm very much afraid that it will, since renters under rent control are an extreme minority), I'm sure my point will be proven that rents won't drop at all. They will either stay the same or go higher. So much for market-driven economics!

[EscapeCalifornia]

Originally Posted by SandyCo

I only have one problem with that. What the landlord is calling a business investment as he's perusing his profit and loss sheet, etc. is a renter's home.

If this proposition passes (and I'm very much afraid that it will, since renters under rent control are an extreme minority), I'm sure my point will be proven that rents won't drop at all. They will either stay the same or go higher. So much for market-driven economics!

If the market supports a higher rate, they that's what's going to happen. If not, rents will stay the same.

And try not to get so emotional about your apartment. Unless you own it, its not really yours.

[SandyCo]

I'm not emotional about my apartment. Believe me, if I could afford to move out of here, I would have left several years ago. I am very much emotionally attached to the idea of a home, however, a haven that I can use as an escape from the world. My apartment is so far from being any kind of haven that it's laughable.

My real point is that everyone needs a home, a place to live, a roof over their heads. Food and shelter should be basic human rights. I don't want to get too far off topic, so I'll just stop right there.

[mommabear2]

Originally Posted by SandyCo

I only have one problem with that. What the landlord is calling a business investment as he's perusing his profit and loss sheet, etc. is a renter's home.

If you don't mind me asking... How long have you been in your unit and how much do you pay for rent? You seem like you've been in your place for a really long time and pay dirt cheap rent (by L.A.'s standards) and don't want to let it go. Why would you expect another person to give you a place a live at little or no profit?

[SandyCo]

I've been here for eleven years, and I pay $1002 for a 2-bedroom, 1-bath apartment. I have every intention of moving from here as soon as my two kids get through college. I can't afford to pay higher rent and help them with their education, so for now I have chosen to stay here.

I'll be able to afford the higher market rate only if the new apartment is also under rent control, limiting the rent increases to 3-5% each year. I can't afford to pay the new market rates and also deal with rent increases of 10%. I don't know about anyone else, but I'm only getting a paltry cost of living raise each year - between 1% and 2% for the last few years.

[perek]

Originally Posted by mommabear2

I'd like to add the list of states (and the District of Columbia) that have rent control.

California
District of Columbia
Maryland
New Jersey
New York

It seems interesting to me, that California is one of only 4 states that have it. The rest of the country manages just fine without it.

Guess why? Cali, DC, MD, NJ, and NY have the highest cost some of living prices in the nation (DC, LA, NYC are the most expensive cities in the nation/world)! The market in LA certainly does NOT support the crazy high rent here, people are just forced to pay it. If you live in a place you shouldn't be forced out of it by crazy increases in rent every year, the rent increases are purely profit driven, much like oil prices. The landlords mortgage certainly wont go up, property taxes may increase, but not at some of the rates of rent increase seen in LA.

[laysayfair]

Originally Posted by SandyCo

I've been here for eleven years, and I pay $1002 for a 2-bedroom, 1-bath apartment. I have every intention of moving from here as soon as my two kids get through college. I can't afford to pay higher rent and help them with their education, so for now I have chosen to stay here.

I'll be able to afford the higher market rate only if the new apartment is also under rent control, limiting the rent increases to 3-5% each year. I can't afford to pay the new market rates and also deal with rent increases of 10%. I don't know about anyone else, but I'm only getting a paltry cost of living raise each year - between 1% and 2% for the last few years.

You left out the part about how you feel you shouldn't have to deal with a roomate...?

[SandyCo]

Originally Posted by laysayfair

You left out the part about how you feel you shouldn't have to deal with a roomate...?

No, I don't want to deal with a roommate, but that's irrelevant to this discussion, especially for me in particular, because I have one child still living at home, and the other one still comes home frequently enough that it's still "her" room.

I know that when I move, I'm probably going to have to downsize to a one-bedroom. I'm willing to do that, as long as it's in a better building in a good location.

And for anyone who is wondering why I don't just move out of state, I really love my job and the people I work with.

[EscapeCalifornia]

Originally Posted by SandyCo

I've been here for eleven years, and I pay $1002 for a 2-bedroom, 1-bath apartment. I have every intention of moving from here as soon as my two kids get through college. I can't afford to pay higher rent and help them with their education, so for now I have chosen to stay here.

I'll be able to afford the higher market rate only if the new apartment is also under rent control, limiting the rent increases to 3-5% each year. I can't afford to pay the new market rates and also deal with rent increases of 10%. I don't know about anyone else, but I'm only getting a paltry cost of living raise each year - between 1% and 2% for the last few years.

Wow. You're getting a $500/mo+ city-imposed gift from your landlord. Rent control is no different from section 8, except the burden is 100% on the property owner instead of spread out among all tax payers, the property owner is forced to take it, and the benefit it given out without regard to the recipient's income level.