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I am trying to understand why rent control is not a thing, why isent it wide spread across the various states? Who doesn't want rent controls other than greedy land lords (who are a vast minority of voters)?
Is the crony capitalism really so awful that the elites are able to stone wall such things or are there other unknowns that the everyday person enjoys giving half their take home pay to a land lord for a marginal rental unit?
Do land owners have legislators living in fear that if they cant fleece copious amount of money from the masses then nothing will get built and their state will start to look like a scene out of mad max? Maybe a large portion of the legislators are land lords in various states? I want to put together a well crafted email to my legislator who I have a good relationship with but I want to make sure I am not missing something. My thoughts are that once rent controls are in place sales prices of rental properties will start to reflect that reality (forced down) otherwise no one will buy them. There will be a period of pain where slum lords are holding properties hoping for change rather than selling "cheap" but as long as the vast majority of people want it and the legislation is durable the prices will go down. Then start strictly enforcing blight laws so that if they let the properties go while still hanging on to them the fines get steeper and steeper until it does not make sense to hold the property anymore.
I seriously don't get it.
Last edited by pittsflyer; 12-07-2016 at 02:09 PM..
Why isn't there control on the amount that prices of homes can increase?
Why isn't there control on the increased prices of food? Insurance?
Why isn't there control on the increased prices of clothing?
Why isnn't there control over then increase prices of automobiles?
The answer is because we practice under the concept of Capitalism so market decides. If this were socialism, probably there would be all kinds of controls including the rent control you desire.
Well, I know if rent control came to my area, at least half of the rental owners I know (which is a lot since I work in a property management office) would immediately sell their rentals. I have no idea how people afford to buy/keep/maintain rentals in rent controlled cities. Average rent in my area is about what it costs to pay the mortgage, taxes, insurance, HOA dues, irrigation taxes, maintenance, etc. Many landlords don't make any (or very little) profit until they sell.
For those of us who live in non-rent controlled states, here is how I picture the average tenant under rent control: They rented the house in 1978, and either are still living there, or are subleasing the unit to someone else at the same original rate. Therefore, the rent is now 1/3 of what it should be, while expenses have continued to rise. Therefore, their rent now doesn't even cover the taxes, and the landlord is losing copious amounts of money every month. The landlord really should sell, but no one wants to buy because they inherit the same problem.
If the vast majority of landlords sell out, it seems to me that you end up with a couple of effects:
1. Most rentals are owned by a very few people, meaning less choice for tenants
2. Most rentals are apartment buildings, condos, or plexes, which are less expensive to maintain per unit than single family houses
3. Demand stays the same while supply goes down, which drives up prices. When landlords realize they can't raise the rates, more of them would sell, leading back to #1 and #2.
The only landlords who can afford to own rentals in rent controlled areas are those who have no mortgages, or who intend to own property long enough to pay off the mortgage. That describes very few landlords.
I honestly don't know how rent control has continued to be viable in the places it already is.
Well, I know if rent control came to my area, at least half of the rental owners I know (which is a lot since I work in a property management office) would immediately sell their rentals. I have no idea how people afford to buy/keep/maintain rentals in rent controlled cities. Average rent in my area is about what it costs to pay the mortgage, taxes, insurance, HOA dues, irrigation taxes, maintenance, etc. Many landlords don't make any (or very little) profit until they sell.
For those of us who live in non-rent controlled states, here is how I picture the average tenant under rent control: They rented the house in 1978, and either are still living there, or are subleasing the unit to someone else at the same original rate. Therefore, the rent is now 1/3 of what it should be, while expenses have continued to rise. Therefore, their rent now doesn't even cover the taxes, and the landlord is losing copious amounts of money every month. The landlord really should sell, but no one wants to buy because they inherit the same problem.
If the vast majority of landlords sell out, it seems to me that you end up with a couple of effects:
1. Most rentals are owned by a very few people, meaning less choice for tenants
2. Most rentals are apartment buildings, condos, or plexes, which are less expensive to maintain per unit than single family houses
3. Demand stays the same while supply goes down, which drives up prices. When landlords realize they can't raise the rates, more of them would sell, leading back to #1 and #2.
The only landlords who can afford to own rentals in rent controlled areas are those who have no mortgages, or who intend to own property long enough to pay off the mortgage. That describes very few landlords.
I honestly don't know how rent control has continued to be viable in the places it already is.
I agree there would be pain until the sales prices for the real estate started to deflate. Once the hyper inflated boondoggle corrected itself then land lords could make money again without people getting fleeced. But yes there would be an initial pain, but there always is with any bubble when it pops. Unfortunately sometimes the bubble needs a little assistance in popping before it expands and chokes everyone out.
The only reason the land lords could not make money is because of the mortgage and the only reason the mortgage is high is because of the purchase price of the unit. the other expenses are relatively minor in comparison.
in most states any rent stabilization programs include big tax hits to the local tax revenue . there are all kinds of tax incentives that go along with agreeing to have rents governed by a board and politics .
the local taxes everyone pays has to make up for those cuts in the budget .
without incentives no one would ever be a landlord . i would never take a job where i couldn't earn market wages . if you want to cap a landlords income with no compensation how about having your own income capped too .
50% of all the housing in nyc is stabilized . but that number is dropping yearly .
after landlords were duped by being told rent stabilization was only to prevent rent gouging and they would always get fair market rents most private buildings went co-op here . the rents were held artificially low for years as the politicians used rent stabilization as a political pawn .
once the original tenant is out the apartment is destabilized . it is the light at the end of the tunnel for landlords who did conversions .
we owned a bunch of stabilized apartments over looking central park . we bought out the leases of all but two of our tenants and sold the co-ops once they were out.
depending how nuch in turnover an apartment has if it is a stabilized rental and not co-op the rents may very well be at market . it is only long time tenants who might have been there decades that really see any big difference . .
Last edited by mathjak107; 12-07-2016 at 03:04 PM..
As a renter, as one who gives over half their money to their landlord every month, I don't want rent control in my area. Rent is fine in my area aa is. If rebt control was established, rent would actually go up to be able to maintain long term tenants. I pay $625 a month, and that's actually higher for apartments for the block I live on. Rent control would mean starting rent would probably be another $100 more because you can't increase once someone moves in.
I also don't think rent control is fair for landlords either. They have to deal with all of our crap, and the city's crap of constantly raising rent.
eventually it just leads to the creation of co-ops so landlords can get out from under the restrictions just like they did here . anytime you artificially play with markets trying to seek their own level via demand and supply it rarely ends well .
being stabilized here as zero to do with net worth or even income . it is strictly based on years in the apartment . we live in a stabilized apartment where my wife has lived for 35 years . but we also own stabilized co-ops in manhattan .
Your theory doesn't match reality. Look at prices of rent controlled areas and you will see you are in magic fairy lala land. Rent control drives prices up not down and not just here in the US but in London it has had the same effect as CA and NY. Rent control hurts newer renters which is why you are seeing CA trying to expand their failing policy instead of abolishing it.
markets are like water and seek their own level , it could be higher it could be lower .
when boston did away with their stabilization laws rents went up . but there is a reason . renovation permits soared . old dingy apartments were gutted and renovated and new always cost more money .
Should be some type of rent control since the salaries of most people don't increase as often as their rent.
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