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The question is why don't those tenants move? If they are truly paying above market rent in your building, it would make sense for them to move elsewhere and pay market. Something is missing from this story. There must be something in your building that is appealing to them to justify paying above market. Either that or the are just ignorant.
It's mainly ignorance on the tenant's part. Throughout the decades of paying below market rent, they thought in their little minds that they were paying fair value for the apartment. Fast forward to today, they still think that but now they are paying above market rent.
They have absolutely no understanding neither then nor now of what market rents are going for. Oh well, I'm not complaining. Like I said before, I now consider the excess rent I am getting above market from these people as PAYBACK for all the years I was forced to collect below market rents from them. Consider the excess rent money as rent money I rightfully should of been collecting the years they were paying below market rent. Revenge is sweet isn't it?
Oh and did I mention their apartments are NOT renovated and looks like crap.
Hilltopjay is correct, some tenants are not aware of rental opportunities around them and there is no shortage of slimy landlords to extricate higher than market rates from them. In fact this misinformation and resulting monopolistic control is the best argument for rent control.
Monopolies and oligopolies have long ago found that they could manipulate their pricing due to imperfect markets. Only governments could impose the public good on the process.
I once asked an acquaintance what her controlled rent was. She said "I don't feel I can tell you." At that point I judged her a complete and utter assssshole. Only slimy landlords win with this kind of stupid secrecy and she was too stupid to realize this.
Obviously not too high for them. I don't understand why you're so sure they don't know they're overpaying. Heck they probably figure with all the money they saved in previous years, they don't mind overpaying some and not dealing with the hassle of finding something else they like and packing boxes/hiring movers/ etc...
Obviously not too high for them. I don't understand why you're so sure they don't know they're overpaying. Heck they probably figure with all the money they saved in previous years, they don't mind overpaying some and not dealing with the hassle of finding something else they like and packing boxes/hiring movers/ etc...
Well whatever the reason is, I don't care as now I prefer them not to move because if they move, I would have to gut renovate the apartment to re-rent at a lower price than what they are paying. I would incur a huge expense if they were to move. The longer they stay in the apartment, the more of the money I get back that I lose from years past when they paid below market rent.
Rent is "sticky" in both directions. Landlords don't want to find new tenants and tenants don't want to move. One of the many ways that the rental market is not an "efficient" market.
Hilltopjay is correct, some tenants are not aware of rental opportunities around them and there is no shortage of slimy landlords to extricate higher than market rates from them. In fact this misinformation and resulting monopolistic control is the best argument for rent control.
Monopolies and oligopolies have long ago found that they could manipulate their pricing due to imperfect markets. Only governments could impose the public good on the process.
I once asked an acquaintance what her controlled rent was. She said "I don't feel I can tell you." At that point I judged her a complete and utter assssshole. Only slimy landlords win with this kind of stupid secrecy and she was too stupid to realize this.
Yes, that's how it works.
The pro-deregulation people are so funny, hundreds of blind spots.
Regulation is great and all for people who live there, but they don't own those apartments. That's someone's private property. Where in the constitution does it say the government is allowed to dictate the terms of your contract for someone to occupy that property?
RS & RC will eventually get struck down by the supreme court, but it will take many more years
Rent is "sticky" in both directions. Landlords don't want to find new tenants and tenants don't want to move. One of the many ways that the rental market is not an "efficient" market.
Amen to that.
And it is sticky markets that need regulation. Free markets take care of themselves.
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