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Long term tennants are good for the owner in one way that they know they have rent coming in every month. Also landlords do not need to find a new tenant or deal with vacancies which is very expensive. At the same token, if a tenant is paying low rent it tends to decrease the value of the property. A difference of a couple hundred dollars in rent can mean an increase of value in tens of thousands if not more.
Why should property owners accept less than fair market value? Do you? Do you tell your boss that you'd gladly work there for 20% less? I've already accepted that I don't make enough money to have the life I want here in the city I was born and raised in. So I'm making plans to go somewhere more affordable. Isn't that what this board is all about? If LA wants to be a two class society, let 'em. The writing's been on *that* wall for a long time. Go somewhere else where you can have a comfortable middle class life without depending on the government to make your housing affordable.
I haven't been following all of this so please forgive me if someone else has already fully responded to this and I am being redundant. Rent control does not apply everywhere in Los Angeles. If a property owner does not wish to deal with rent control, the owner can simply not purchase a property which is under rent control. However, as a renter, who relies on rent control to maintain a limit on the amount that rent can be increased in a year, I and many other renters like me, will almost surely be harmed if rent control is eliminated by Propisition 98.
Eliminating rent control will give landlords an incentive to target all renters who are inhabiting rent control units to "encourage" them to relocate. I am nearing retirement. Many others who rely on rent control are retired and are on fixed incomes. As it stands now, Los Angeles has a very limited supply of affordable housing for seniors, the disablled and many others who have limited incomes. Rent control is probably the only sane legislation in this city that attempts to protect citizens who live here from becoming homeless.
Without rent control, you will see far more homeless people in this city as well as "packing" of many adults and several families into a single unit to live. This will greatly increase the density in aparments and will likely create fire hazards as well as other types of psychological hazards that often come when too many "rats", uhmm, I mean people are squeezed into a very small space.
Although I usually believe in a free market system, placing a safety net in place so that people do not become homeless is useful to all citizens in LA because it helps the community remain diverse and enables seniors, the disabled, and the working poor to remain independent without relying on the government for a handout or herding everyone into specialized housing, such as what was known as "the projects," slum housing where crime was allowed to fester.
Rent control merely prevents "gouging." It does not deprive the landlord from earning a profit on a property investment because even under rent control the landlord resets the unit to market rates whenever a tenant moves out and a new tenant moves in. Even under rent control, the landlord increases rent every year. Last year the rents were increased five percent here in LA under rent control.
Please if you have a conscience, and/or care about seniors, the working poor who might even work at your company in a low-wage job, or the disabled, vote "No" on Propisition 98.
First, let's talk about moral hazard. There are rich people who don't have two nickels to rub together, but they have a Mercedes and a house. There are non-rich working class people that don't have two nickels either, but they have Nike's on their babies feet and an iPod radio in the living room. People always live beyond their means, they live on credit cards when cash runs out, they live on HELOC's when their credit cards max out, they live on 401k loans when the credit cards, HELOC's, and cash run out. When you force a rental rate to be below the market value of the area, you allow people to spend that extra savings on anything they want, sure that's a multiplier but is it fair to everyone else that pays full market value and THEN tries to afford the iPod, etc... It's fashionable and liberal, and soft hearted to say it's on food, formula and heat - but in reality, they have TV's, VCR's, DVD players, a laptop, etc... The idea of what is poverty is skewed. I agree there is true poverty in this country, but I think the word is tossed around loosely - basically anyone who can't afford what the rich can afford. Poverty to me means, you have one can of condensed milk left and the power is off - I'm simplifying it, but you understand. If the rent were at a market rate, they could pay it - they just couldn't get the iPod. Meanwhile, anyone paying market rate, has to make ends meet JUST the same, without the welfare of rent control.
Second, the multiplier effect. Well, if I were a landlord suffering from rent control, I know what I would do - not fix anything. I'd do the minimum to keep the building up to codes and nothing else. You talk about them being slums? Hell yeah they'll be slums, because you took the economic incentive away from the landlord to make them anything BUT slums. If he was actually making market value, he would be competing with new or better managed local properties, so he would have to attract potential renters from others - so he would maintain the structure, landscaping, detail, upgrade the interiors, etc...and guess what...there's your multiplier as carpenters, electricians, masons, wood workers, all the "working people" suddenly have JOBS by working on and maintaining these buildings, and they are PAID with the extra money the landlord has from tenants who can afford it. Additionally, those tenants with money want to shop, so the local economy is boosted because an influx of spenders is dropping all their cash (multiplier again) into the local stores, restaurants and services...and who works there? Oh right, the "working class." More jobs.
Third, who are any of you to determine what is appropriate for rent control? In Manhattan, a shoe box sized studio apartment can run $4,000. Clearly, a middle "working class" family of four could not swing that, nor afford anything with actual bedrooms. So are all of you saying that indeed, Manhattan needs to expand their rent control program because it is unfair that a working class family of four can not pay that rent and is forced to work outside of Manhattan? So how many working class families does Manhattan have to house in rent control? 50, 100, 1,000 - all of them? Why is that bad? Do you think that is elitist? Elitist that there are places to live that are expensive and that some people can not afford them? So what? They can't afford a Mercedes either, or a 60" plasma, or the best diapers, or the best stroller - so where do you stop? When do YOU think they are getting enough? Maybe they should get just a 50"? No? Maybe a 35"? 20"? Where is the line? When are you taxed SO MUCH and your income redistributed across countless individuals willing to consume it that you say enough is enough? Even among yourselves, you will not agree on what "market value" should be on price-controlled-anything.
"No" you will say, "...a TV is not a roof over their heads." I agree. BUT...there are many roofs, of all different prices, and some are further away than others. So what? Many of us commute, what difference does that make? We take trains into Manhattan from Connecticut or we sit in gridlock into LA. The point is, they CAN find a place to live, it just might not be close by...again...so what?
If the local economy cannot support the expenses being incurred by the "working class" commuting into the area, the working class will LEAVE to go find work. As it gets harder and harder for local businesses to find local "working class" help, they will be forced to offer more and more money. Well guess what folks...that means they have to increase salaries to draw the working class in from the outskirts and hey - with those new higher salaries they can afford MARKET RATE local apartments...and don't need rent control. Isn't the free market nifty?
Let the FREE market system operate without government and good-intentioned private manipulation and it will take care of itself and EVERYONE else.
Oh lastly - to senior citizens, the disabled, etc... I have this to say...
You all deserve an affordable and safe place to live. If you cannot afford it on your own, it should be subsidized. Now here is where me and the tax-and-spend or I should say, the "tax-and-give-to-someone-they-define-as-poor" people will differ. I am against taxation and redistribution. If I was not taxed on my income, and I was approached by a senior/disabled living center that needed funding to keep costs down and allow seniors or the disabled to live there, I would gladly donate my money knowing that a private enterprise (75% more efficient at using my donation than the government) would invest my money directly into this worthy cause. Currently, I am more of the "I gave at the door" type of person. I loath giving a $1 to government knowing that only $0.25 will actually make it to someone who needs it. That said, if government is going to be jammed down my throat as it is now, I would reluctantly concede that gov't subsidization should continue for people who are unable to physically take care of themselves. However, it should be for people who qualify as disabled, elderly, etc.. who could not afford to live ANYWHERE but in subsidized housing. I would not want this abused by people who under-report their income so they can take a unit away from a truly deserving individual and then cram 4 families into it with their Mercedes parked outside (to keep up with the Joneses who have never seen where they live), and abuse the system.
Last edited by CTNative73; 06-04-2008 at 10:17 PM..
First, let's talk about moral hazard. There are rich people who don't have two nickels to rub together, but they have a Mercedes and a house. There are non-rich working class people that don't have two nickels either, but they have Nike's on their babies feet and an iPod radio in the living room. People always live beyond their means, they live on credit cards when cash runs out, they live on HELOC's when their credit cards max out, they live on 401k loans when the credit cards, HELOC's, and cash run out. When you force a rental rate to be below the market value of the area, you allow people to spend that extra savings on anything they want, sure that's a multiplier but is it fair to everyone else that pays full market value and THEN tries to afford the iPod, etc... It's fashionable and liberal, and soft hearted to say it's on food, formula and heat - but in reality, they have TV's, VCR's, DVD players, a laptop, etc... The idea of what is poverty is skewed. I agree there is true poverty in this country, but I think the word is tossed around loosely - basically anyone who can't afford what the rich can afford. Poverty to me means, you have one can of condensed milk left and the power is off - I'm simplifying it, but you understand. If the rent were at a market rate, they could pay it - they just couldn't get the iPod. Meanwhile, anyone paying market rate, has to make ends meet JUST the same, without the welfare of rent control.
Second, the multiplier effect. Well, if I were a landlord suffering from rent control, I know what I would do - not fix anything. I'd do the minimum to keep the building up to codes and nothing else. You talk about them being slums? Hell yeah they'll be slums, because you took the economic incentive away from the landlord to make them anything BUT slums. If he was actually making market value, he would be competing with new or better managed local properties, so he would have to attract potential renters from others - so he would maintain the structure, landscaping, detail, upgrade the interiors, etc...and guess what...there's your multiplier as carpenters, electricians, masons, wood workers, all the "working people" suddenly have JOBS by working on and maintaining these buildings, and they are PAID with the extra money the landlord has from tenants who can afford it. Additionally, those tenants with money want to shop, so the local economy is boosted because an influx of spenders is dropping all their cash (multiplier again) into the local stores, restaurants and services...and who works there? Oh right, the "working class." More jobs.
Third, who are any of you to determine what is appropriate for rent control? In Manhattan, a shoe box sized studio apartment can run $4,000. Clearly, a middle "working class" family of four could not swing that, nor afford anything with actual bedrooms. So are all of you saying that indeed, Manhattan needs to expand their rent control program because it is unfair that a working class family of four can not pay that rent and is forced to work outside of Manhattan? So how many working class families does Manhattan have to house in rent control? 50, 100, 1,000 - all of them? Why is that bad? Do you think that is elitist? Elitist that there are places to live that are expensive and that some people can not afford them? So what? They can't afford a Mercedes either, or a 60" plasma, or the best diapers, or the best stroller - so where do you stop? When do YOU think they are getting enough? Maybe they should get just a 50"? No? Maybe a 35"? 20"? Where is the line? When are you taxed SO MUCH and your income redistributed across countless individuals willing to consume it that you say enough is enough? Even among yourselves, you will not agree on what "market value" should be on price-controlled-anything.
"No" you will say, "...a TV is not a roof over their heads." I agree. BUT...there are many roofs, of all different prices, and some are further away than others. So what? Many of us commute, what difference does that make? We take trains into Manhattan from Connecticut or we sit in gridlock into LA. The point is, they CAN find a place to live, it just might not be close by...again...so what?
If the local economy cannot support the expenses being incurred by the "working class" commuting into the area, the working class will LEAVE to go find work. As it gets harder and harder for local businesses to find local "working class" help, they will be forced to offer more and more money. Well guess what folks...that means they have to increase salaries to draw the working class in from the outskirts and hey - with those new higher salaries they can afford MARKET RATE local apartments...and don't need rent control. Isn't the free market nifty?
Let the FREE market system operate without government and good-intentioned private manipulation and it will take care of itself and EVERYONE else.
Oh lastly - to senior citizens, the disabled, etc... I have this to say...
You all deserve an affordable and safe place to live. If you cannot afford it on your own, it should be subsidized. Now here is where me and the tax-and-spend or I should say, the "tax-and-give-to-someone-they-define-as-poor" people will differ. I am against taxation and redistribution. If I was not taxed on my income, and I was approached by a senior/disabled living center that needed funding to keep costs down and allow seniors or the disabled to live there, I would gladly donate my money knowing that a private enterprise (75% more efficient at using my donation than the government) would invest my money directly into this worthy cause. Currently, I am more of the "I gave at the door" type of person. I loath giving a $1 to government knowing that only $0.25 will actually make it to someone who needs it. That said, if government is going to be jammed down my throat as it is now, I would reluctantly concede that gov't subsidization should continue for people who are unable to physically take care of themselves. However, it should be for people who qualify as disabled, elderly, etc.. who could not afford to live ANYWHERE but in subsidized housing. I would not want this abused by people who under-report their income so they can take a unit away from a truly deserving individual and then cram 4 families into it with their Mercedes parked outside (to keep up with the Joneses who have never seen where they live), and abuse the system.
My admiration for your ability to "break it down" like that knows no bounds. Thank-you.
First, let's talk about moral hazard. There are rich people who don't have two nickels to rub together, but they have a Mercedes and a house. There are non-rich working class people that don't have two nickels either, but they have Nike's on their babies feet and an iPod radio in the living room. People always live beyond their means, they live on credit cards when cash runs out, they live on HELOC's when their credit cards max out, they live on 401k loans when the credit cards, HELOC's, and cash run out. When you force a rental rate to be below the market value of the area, you allow people to spend that extra savings on anything they want, sure that's a multiplier but is it fair to everyone else that pays full market value and THEN tries to afford the iPod, etc... It's fashionable and liberal, and soft hearted to say it's on food, formula and heat - but in reality, they have TV's, VCR's, DVD players, a laptop, etc... The idea of what is poverty is skewed. I agree there is true poverty in this country, but I think the word is tossed around loosely - basically anyone who can't afford what the rich can afford. Poverty to me means, you have one can of condensed milk left and the power is off - I'm simplifying it, but you understand. If the rent were at a market rate, they could pay it - they just couldn't get the iPod. Meanwhile, anyone paying market rate, has to make ends meet JUST the same, without the welfare of rent control.
Second, the multiplier effect. Well, if I were a landlord suffering from rent control, I know what I would do - not fix anything. I'd do the minimum to keep the building up to codes and nothing else. You talk about them being slums? Hell yeah they'll be slums, because you took the economic incentive away from the landlord to make them anything BUT slums. If he was actually making market value, he would be competing with new or better managed local properties, so he would have to attract potential renters from others - so he would maintain the structure, landscaping, detail, upgrade the interiors, etc...and guess what...there's your multiplier as carpenters, electricians, masons, wood workers, all the "working people" suddenly have JOBS by working on and maintaining these buildings, and they are PAID with the extra money the landlord has from tenants who can afford it. Additionally, those tenants with money want to shop, so the local economy is boosted because an influx of spenders is dropping all their cash (multiplier again) into the local stores, restaurants and services...and who works there? Oh right, the "working class." More jobs.
Third, who are any of you to determine what is appropriate for rent control? In Manhattan, a shoe box sized studio apartment can run $4,000. Clearly, a middle "working class" family of four could not swing that, nor afford anything with actual bedrooms. So are all of you saying that indeed, Manhattan needs to expand their rent control program because it is unfair that a working class family of four can not pay that rent and is forced to work outside of Manhattan? So how many working class families does Manhattan have to house in rent control? 50, 100, 1,000 - all of them? Why is that bad? Do you think that is elitist? Elitist that there are places to live that are expensive and that some people can not afford them? So what? They can't afford a Mercedes either, or a 60" plasma, or the best diapers, or the best stroller - so where do you stop? When do YOU think they are getting enough? Maybe they should get just a 50"? No? Maybe a 35"? 20"? Where is the line? When are you taxed SO MUCH and your income redistributed across countless individuals willing to consume it that you say enough is enough? Even among yourselves, you will not agree on what "market value" should be on price-controlled-anything.
"No" you will say, "...a TV is not a roof over their heads." I agree. BUT...there are many roofs, of all different prices, and some are further away than others. So what? Many of us commute, what difference does that make? We take trains into Manhattan from Connecticut or we sit in gridlock into LA. The point is, they CAN find a place to live, it just might not be close by...again...so what?
If the local economy cannot support the expenses being incurred by the "working class" commuting into the area, the working class will LEAVE to go find work. As it gets harder and harder for local businesses to find local "working class" help, they will be forced to offer more and more money. Well guess what folks...that means they have to increase salaries to draw the working class in from the outskirts and hey - with those new higher salaries they can afford MARKET RATE local apartments...and don't need rent control. Isn't the free market nifty?
Let the FREE market system operate without government and good-intentioned private manipulation and it will take care of itself and EVERYONE else.
A market can only be free if all of the positive and negative externalities can be internalized to the participants of the deal. This is clearly not the case with housing, especially when transportation, employment, and other systems are factored in. If this was truly a free market the landowner would have to pay for every service that improves the value of their property, including transportation, safety, fire, education, employment proximity, etc. Similarly the renter would pay for all of those positive externalities. However, we have agreed to public paying for those externalities so the property tax (or lack thereof in Cali) and the income and sales taxes say the renter has already paid for those externalities. However the landowner is trying to charge them again. Housing is further complicated because it is a moral imperative to ensure everyone has housing of some sort. It is impossible to internalize to the deal all of the externalities thus there are three options. We choose to allow the landowner to bear more than their share (or some would argue their share). We can choose to allow the renter to pay more than their fair share ("free market" Prop 98) or we can choose to use a tax/fee system to make sure the externalities are internalized (permits for landowners or increased property taxes).
Don't argue the market on such a superficial level. Few people understand it and the lack of actual knowledge allows false statements by use of the words free market to manipulate people with emotional responses not the facts of circumstance.
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Rent Control is Evil
