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Shrug. Works the same way when homeowners enjoy property tax caps - like Prop 13 - that encourage homeowners to stay put. And those property tax caps cause local jurisdictions to lose far far more property tax revenue than rent control ever could. Funny how this is seen as a problem caused by rent control while nobody complains when homeowners cause the same problem on a larger scale.
Yeah I think CA may be unique in having both something like Prop 13 AND rent control, so saying one bad idea's unintended consequences are no worse than another's is not an endorsement of either.
Rent control is ONLY about INCUMBENT tenants. It's not about, or intended to benefit, anyone else.
Just like zoning is ONLY about incumbent property owners, and not about, or intended to benefit, anyone else.
Is turnover a good thing or a bad thing? In places without rent control - 98% of the country - turnover is considered a bad thing, and reducing turnover is considered a good thing.
Zoning does benefit other parties, subsequent owners and their neighbors. I find it ironic that people complain so much about zoning in core areas of desirable cities, yet don't bat an eye when every new subdivision has HOAs which often have more onerous requirements. I guess the difference is the latter are built on cheap land (at least for the time being) and there is no market demand for higher density.
New York is not quite ruined yet. It used to be a lot worse, then Giuliani and Bloomberg did something about safety and now the city is booming once again. It would have been better without rent control in the first place, but you can't eliminate it quickly because too many people are dependent on it.
I should have been more specific, NY is ruined for renters, unless you are one of the lucky ones with a controlled or stabilized apartment.
Rent control is ONLY about INCUMBENT tenants. It's not about, or intended to benefit, anyone else.
In NYC, there are small odds that you might find a stabilized apartment to rent.
Quote:
Originally Posted by freemkt
Just like zoning is ONLY about incumbent property owners, and not about, or intended to benefit, anyone else.
This is false. Zoning protects anybody who buys property in the area including new property buyers. It also protects renters by preventing property owners from making changes that would change a neighborhood beyond its intended scope.
Quote:
Originally Posted by freemkt
Is turnover a good thing or a bad thing? In places without rent control - 98% of the country - turnover is considered a bad thing, and reducing turnover is considered a good thing.
Rent control/stabilization prevents people from moving (turnover). I have multiple friends still living in 5th/6th floor walk ups that they rented 30 years ago and the rents are well below market rate due to rent stabilization. In a normal market, they would have moved out as their income increased and their 5th/6th floor walk up on a loud street would be rented by another person looking for a first apartment. In a normal rental market, there would be incrementally better apartments for incrementally more money. In NYC, these apartments do not exist. Essentially, my friends 'first style' apartment is off the market. This also happens with multi-bedroom apartments. If you lived in a 3 BR apartment in a normal market, it would save you money to move to a 1 bedroom when you now longer needed the 3 BR. In NYC, it is not cheaper to move to a smaller apartment, in fact, it will be way more expensive. Now that 3 BR apartment is off the market, preventing normal turnover.
One of my friends could never get around the fact that they would have to pay more money to get a better apartment. They have raised 2 kids in their crappy 1-1/2 bedroom, 1 bathroom apartment, on the 6th floor and have tons of money, including a 2nd home in the Hamptons. They complain bitterly about the apartment, the neighborhood, the stairs, but they will be buried from this apartment when they die and then their kids will inherit the place, keeping it out of public circulation for another 40 years.
Zoning does benefit other parties, subsequent owners and their neighbors. I find it ironic that people complain so much about zoning in core areas of desirable cities, yet don't bat an eye when every new subdivision has HOAs which often have more onerous requirements. I guess the difference is the latter are built on cheap land (at least for the time being) and there is no market demand for higher density.
How does zoning benefit low-income renters who get priced out of the neighborhood? How does it benefit singles who are prohibited from finding affordable housing because they're not allowed to rent with multiple roommates?
This is false. Zoning protects anybody who buys property in the area including new property buyers. It also protects renters by preventing property owners from making changes that would change a neighborhood beyond its intended scope.
Zoning doesn't protect them UNTIL they buy and become INCUMBENT homeowners. Zoning more often prohibits property owners from making changes that would make a neighborhood more affordable to renters. e.g. the chronic shortage of affordable housing is precisely a product of zoning.
Rent control/stabilization prevents people from moving (turnover). I have multiple friends still living in 5th/6th floor walk ups that they rented 30 years ago and the rents are well below market rate due to rent stabilization. In a normal market, they would have moved out as their income increased and their 5th/6th floor walk up on a loud street would be rented by another person looking for a first apartment. In a normal rental market, there would be incrementally better apartments for incrementally more money. In NYC, these apartments do not exist. Essentially, my friends 'first style' apartment is off the market. This also happens with multi-bedroom apartments. If you lived in a 3 BR apartment in a normal market, it would save you money to move to a 1 bedroom when you now longer needed the 3 BR. In NYC, it is not cheaper to move to a smaller apartment, in fact, it will be way more expensive. Now that 3 BR apartment is off the market, preventing normal turnover.
One of my friends could never get around the fact that they would have to pay more money to get a better apartment. They have raised 2 kids in their crappy 1-1/2 bedroom, 1 bathroom apartment, on the 6th floor and have tons of money, including a 2nd home in the Hamptons. They complain bitterly about the apartment, the neighborhood, the stairs, but they will be buried from this apartment when they die and then their kids will inherit the place, keeping it out of public circulation for another 40 years.
Prop 13 in California prevents people from moving (turnover). Why is Prop 13 good and rent control bad?
Prop 13 in California prevents people from moving (turnover). Why is Prop 13 good and rent control bad?
I'd probably be cool If Rent control was managed like Prop 13 so that once a tenant moved out I could 'hit the reset button' and raise the rent to existing market rates.
I'd probably be cool If Rent control was managed like Prop 13 so that once a tenant moved out I could 'hit the reset button' and raise the rent to existing market rates.
Isn't that usually how rent control works? It's called "vacancy decontrol" where rent is controlled until a unit becomes vacant, at which point the owner can "reset" to market rent for the next lessee. Rent control SHOULD work pretty much the same way as Prop 13.
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