It's Happening Again - Homes Lost - Some Rent Control Needed

[dblack]

The only way to protect the rights of home, are for government to help collective bargain or collective investment in homes for everyone.

If you say so.

 

[protectionist]

It's called "the market". It has existed since the beginning of human interactions. You can't wish it away with legislation.

You don't "wish it away", you simply set parameters on how much rent can be charged.
"Can't"? New York has been doing it for 100 years.

 

[task0778]

You don't "wish it away", you simply set parameters on how much rent can be charged.
"Can't"? New York has been doing it for 100 years.

I believe that's called rent or price controls. What happens when you do that is less creation of rental properties which acerbates the problem. IOW, less supply which leads to higher prices and also lower maintenance of existing properties. Which has occurred over and over again in city after city, including New York.

The textbook case against rent control comes from New York City, where government intervention in the rental market started in 1943. For decades, tightly-controlled rents failed to cover basic maintenance and operating costs. As a result, builders added few new rental units and landlords let buildings deteriorate since they couldn’t increase rents to pay for needed upkeep.

By 1968, New York’s vacancy rate — the percentage of rental properties available — fell to 1.23 percent. For comparison, the vacancy rate in Los Angeles today is 3.7 percent. Many New York neighborhoods became blighted and abandoned buildings became common. Over 200,000 rental units were abandoned in the 1960s and ‘70s as rent control restrictions, along with other policies, reduced the South Bronx and parts of Bedford-Stuyvesant and Harlem to rubble.

Rent controls gave way to “rent stabilization” in 1969, but New York rents continued to fall short of breakeven costs for property owners. Lawmakers addressed neglected buildings by imposing a “duty to repair” on landlords. Enforcement, however, was difficult and landlords, tenants and regulators often ended up in court.

In 1994, New York City finally decontrolled rents on apartments occupied by high-income residents and on high-end units that became vacant.

New York’s rent controls created shortages and under-investment. And while the people who needed affordable apartments most often struggled to find them, many well-off tenants lived in rent-controlled apartments for decades. When rent is heavily regulated, tenants have incentives to hold onto apartments. Older adults will remain in three-bedroom units after their children leave home. Others sublet their apartments or invite relatives to assume their leases instead of giving up rent-controlled apartments. Thus, young people cannot find affordable housing for their growing families, and newcomers have to find roommates to share costs, or buy expensive co-ops or condos — if they can afford them.

Rent Control Laws Nearly Destroyed Parts of New York City. They Could Do the Same to California - Reason Foundation

New York’s rent controls created shortages and under-investment.

reason.org

 

[protectionist]

I believe that's called rent or price controls. What happens when you do that is less creation of rental properties which acerbates the problem. IOW, less supply which leads to higher prices and also lower maintenance of existing properties. Which has occurred over and over again in city after city, including New York.

The textbook case against rent control comes from New York City, where government intervention in the rental market started in 1943. For decades, tightly-controlled rents failed to cover basic maintenance and operating costs. As a result, builders added few new rental units and landlords let buildings deteriorate since they couldn’t increase rents to pay for needed upkeep.

By 1968, New York’s vacancy rate — the percentage of rental properties available — fell to 1.23 percent. For comparison, the vacancy rate in Los Angeles today is 3.7 percent. Many New York neighborhoods became blighted and abandoned buildings became common. Over 200,000 rental units were abandoned in the 1960s and ‘70s as rent control restrictions, along with other policies, reduced the South Bronx and parts of Bedford-Stuyvesant and Harlem to rubble.

Rent controls gave way to “rent stabilization” in 1969, but New York rents continued to fall short of breakeven costs for property owners. Lawmakers addressed neglected buildings by imposing a “duty to repair” on landlords. Enforcement, however, was difficult and landlords, tenants and regulators often ended up in court.

In 1994, New York City finally decontrolled rents on apartments occupied by high-income residents and on high-end units that became vacant.

New York’s rent controls created shortages and under-investment. And while the people who needed affordable apartments most often struggled to find them, many well-off tenants lived in rent-controlled apartments for decades. When rent is heavily regulated, tenants have incentives to hold onto apartments. Older adults will remain in three-bedroom units after their children leave home. Others sublet their apartments or invite relatives to assume their leases instead of giving up rent-controlled apartments. Thus, young people cannot find affordable housing for their growing families, and newcomers have to find roommates to share costs, or buy expensive co-ops or condos — if they can afford them.

Rent Control Laws Nearly Destroyed Parts of New York City. They Could Do the Same to California - Reason Foundation

New York’s rent controls created shortages and under-investment.

reason.org

NO, it does NOT reduce creation of rental properties. That occurs when NORMAL conditions exist, and rents are only slightly raised, with the rent control stopping small modest increases, which landlords need to maintain properties to reasonable standards/

There's nothing reasonable about the rent increases occuring now in the Tampa Bay area, in other parts of Florida, and in other parts of the US. Rent inflation here is at more than 200%, with many apartment complexes gone up about 300%, instantly, with new owners taking over the complexes.

I just moved out of 2 complexes in Tampa. The last one went from $600/mo to $850/mo, and that's considered small. The one I moved from in 2019, went from $550 to $900, and a small 1 bedroom apt there is now going for $1300/mo.

1 bedroom apartments here are common at $1800-$2000/mo, which were less than $700/mo 3 years ago.

As for New York City, I was born & raised there, and grew up in a rent controlled apartment. Had there not been rent control there in the 1940s, I might never have been born.

Also, rent control is not what caused buildings to become slums in New York. That was caused by the influx of people who simply mistreated their buildings. Some of these people were given brand new buildings (aka "Projects), and withing a couple of years, they turned them into a shithouse.

The entire neighborhood where I was raised (Fort George), is still doing fine, buildings perfectly intact, and landlords making profits from buildings over 100 years old, and all under rent control. Same exists in dozens of neighborhoods all over the city.

 

[task0778]

Last November St. Paul passed a policy on rent control.

“The city just approved a rent control measure that will limit landlords’ ability to increase rents on its 65,000+ rental properties,” wrote Polumbo. “They will not be able to increase prices by more than 3 percent each year under the new law.
.
.
“With three months of data on the books since the passage of the rent control measure in November, results are rather grim for anyone hoping for new apartment buildings in St. Paul,” Lindeke writes. “Compared to the same period during the previous year, multifamily building permits are down over 80 percent. Meanwhile, in Minneapolis overall construction is up as the economy has rebounded.”

As Lindeke explains, even if developers want to continue building in St. Paul, they face stiff headwinds because they can no longer get financing.

“Because people making financing decisions view rent inflexibility as increasing risk, they have been simply leaving St. Paul construction projects by the wayside. As one St. Paul developer described during a recent round table discussion, ‘it’s a concern.’
“We have two projects with 260 units where the capital stack was all put together and ready to go, but when the ordinance passed those investors went away,” explained Kou Vang, president of JB Vang Real Estate. ‘A lot of our investors were family funds, stuff of that nature, and they still went away.’”

​

In his book Basic Economics, economist Thomas Sowell painstakingly documents the destructive results of rent control policies around the world. (A Swedish economist once quipped that rent control “appears to be the most efficient technique presently known to destroy a city—except for bombing.”)

• In Melbourne, Australia, not one housing unit was built for nine years—nine years!—because rent control laws had destroyed the profit motive.
• In Santa Monica, California, in 1979, the number of building permits dropped by 90 percent in just a few years because—again—rent control laws had destroyed the incentive to create new housing.
• In the 1970s, residents in Washington, DC, saw housing stock decline from 199,000 to less than 176,000. Why? Because many people decided to stop renting their homes because of price controls.

The Results of a US City's Rent Control Experiment Are In—and They’re Disastrous

Economics 101 strikes again. “Compared to the same period during the previous year, multifamily building permits are down over 80 percent."

fee.org

 

[Toddsterpatriot]

NO, it does NOT reduce creation of rental properties. That occurs when NORMAL conditions exist, and rents are only slightly raised, with the rent control stopping small modest increases, which landlords need to maintain properties to reasonable standards/

There's nothing reasonable about the rent increases occuring now in the Tampa Bay area, in other parts of Florida, and in other parts of the US. Rent inflation here is at more than 200%, with many apartment complexes gone up about 300%, instantly, with new owners taking over the complexes.

I just moved out of 2 complexes in Tampa. The last one went from $600/mo to $850/mo, and that's considered small. The one I moved from in 2019, went from $550 to $900, and a small 1 bedroom apt there is now going for $1300/mo.

1 bedroom apartments here are common at $1800-$2000/mo, which were less than $700/mo 3 years ago.

As for New York City, I was born & raised there, and grew up in a rent controlled apartment. Had there not been rent control there in the 1940s, I might never have been born.

Also, rent control is not what caused buildings to become slums in New York. That was caused by the influx of people who simply mistreated their buildings. Some of these people were given brand new buildings (aka "Projects), and withing a couple of years, they turned them into a shithouse.

The entire neighborhood where I was raised (Fort George), is still doing fine, buildings perfectly intact, and landlords making profits from buildings over 100 years old, and all under rent control. Same exists in dozens of neighborhoods all over the city.

NO, it does NOT reduce creation of rental properties.

LOL!

You're funny.

 

[AZrailwhale]

You don't "wish it away", you simply set parameters on how much rent can be charged.
"Can't"? New York has been doing it for 100 years.

And take a look at the buildings that are rent controlled. They are certainly not very nice anymore. Why should an owner spend money on maintenance when he is losing money on a building and can’t sell it.

 

[Toddsterpatriot]

Why should an owner spend money on maintenance when he is losing money on a building and can’t sell it.

Because owners are mean.

Just ask him.

 

[task0778]

One of the most basic rules of economics and investing is that money flows to where it makes the most return relative to the risks involved. Lower returns translates into less investment, that's just the way it is. And that is why when you introduce rent controls you are making new rental properties less attractive, and the money goes elsewhere. And I might add that making renovations and repairs become less attractive too. One can scream about the immorality all you want, but it doesn't change the reality.

 

[Toddsterpatriot]

One of the most basic rules of economics and investing is that money flows to where it makes the most return relative to the risks involved. Lower returns translates into less investment, that's just the way it is. And that is why when you introduce rent controls you are making new rental properties less attractive, and the money goes elsewhere. And I might add that making renovations and repairs become less attractive too. One can scream about the immorality all you want, but it doesn't change the reality.

That can't be true, protectionist was an economics teacher.

 

[protectionist]

One of the most basic rules of economics and investing is that money flows to where it makes the most return relative to the risks involved. Lower returns translates into less investment, that's just the way it is. And that is why when you introduce rent controls you are making new rental properties less attractive, and the money goes elsewhere. And I might add that making renovations and repairs become less attractive too. One can scream about the immorality all you want, but it doesn't change the reality.

In order to assess the attractiveness of new rental properties, quite a few things would need to be taken inti account. With regards to rent control, properties can be just as attractive now or in the future as they were before the skyrocketed rents began a couple of years ago.

Rental properties don't need rent gouging (300% increases) to be attractive.

 

[protectionist]

Last November St. Paul passed a policy on rent control.

“The city just approved a rent control measure that will limit landlords’ ability to increase rents on its 65,000+ rental properties,” wrote Polumbo. “They will not be able to increase prices by more than 3 percent each year under the new law.
.
.
“With three months of data on the books since the passage of the rent control measure in November, results are rather grim for anyone hoping for new apartment buildings in St. Paul,” Lindeke writes. “Compared to the same period during the previous year, multifamily building permits are down over 80 percent. Meanwhile, in Minneapolis overall construction is up as the economy has rebounded.”

As Lindeke explains, even if developers want to continue building in St. Paul, they face stiff headwinds because they can no longer get financing.

​

In his book Basic Economics, economist Thomas Sowell painstakingly documents the destructive results of rent control policies around the world. (A Swedish economist once quipped that rent control “appears to be the most efficient technique presently known to destroy a city—except for bombing.”)

• In Melbourne, Australia, not one housing unit was built for nine years—nine years!—because rent control laws had destroyed the profit motive.
• In Santa Monica, California, in 1979, the number of building permits dropped by 90 percent in just a few years because—again—rent control laws had destroyed the incentive to create new housing.
• In the 1970s, residents in Washington, DC, saw housing stock decline from 199,000 to less than 176,000. Why? Because many people decided to stop renting their homes because of price controls.

The Results of a US City's Rent Control Experiment Are In—and They’re Disastrous

Economics 101 strikes again. “Compared to the same period during the previous year, multifamily building permits are down over 80 percent."

fee.org

These hysteria chants dont change anything. 3% seems a little low, and quite a distance away from 300%, wouldn't you say ?

If you want to have some credibility in a debate, you have to stay within the parameters of the topic. We're talking about EXTREME rent hikes. All you're doing here is reciting the traditional anti-rent control mantras we've all heard for years. Ho hum.

But those mantras re not applicable to the current scenario of 200-300% rent increases. THAT is what we're talking about here/now. Please address the topic , not straying off to ones that dont fit the circumstances. Landlords don't need 300% rent increases, or 100% rent increases, or 50% rent increases. Thye were all making perfectly good profits while raising rents no more than 5% per year, and in many cases, with no rent increases at all.

As my old physics professor used to say, "qualitative measures are created by and exist in and of quantitative measures." Nobody is talking about any rent control that would endanger any landlord's operations.

It must also be repeated that we are not talking about selling TV sets, guitars, or golf clubs. Housing is a fundamental human NECESSITY. As a society of basic humanitarian morals, we need to have housing (# 1 element of human survival) obtainable for the American people. Landlords should recognize this. If you dont want to keep your necessity commodity within reach of people, sell after shave lotion.

 

[protectionist]

And take a look at the buildings that are rent controlled. They are certainly not very nice anymore. Why should an owner spend money on maintenance when he is losing money on a building and can’t sell it.

Thousands of buildings under rent control, are still lived in and viable. You are responding to landlord biased propaganda.

 

[task0778]

Rental properties don't need rent gouging (300% increases) to be attractive.

I do not believe anybody's rent was increased 300% unless maybe it was over like 50 years. My own rent went up about 10% last year, inflation hits everybody including rental owners. But 300%? That's ridiculous. If your rent was $1000 and now it's $4000? Bullshit.

 

[Concerned American]

I do not believe anybody's rent was increased 300% unless maybe it was over like 50 years. My own rent went up about 10% last year, inflation hits everybody including rental owners. But 300%? That's ridiculous. If your rent was $1000 and now it's $4000? Bullshit.

This guys been whining about rent for six months. He seems to think that rental owners should just do it out of the kindness of their hearts. He doesn't understand that their costs go up along with everyone else.

 

[eagle1462010]

Did he ever move?

 

[Concerned American]

The entire neighborhood where I was raised (Fort George), is still doing fine, buildings perfectly intact, and landlords making profits from buildings over 100 years old, and all under rent control. Same exists in dozens of neighborhoods all over the city.

Move there. Rental owners are not charities. They don't owe you. If you want to live there, pay the rent, apparently there are people who will or they couldn't charge those amounts.

 

[task0778]

I do not believe anybody's rent was increased 300% unless maybe it was over like 50 years. My own rent went up about 10% last year, inflation hits everybody including rental owners. But 300%? That's ridiculous. If your rent was $1000 and now it's $4000? Bullshit.

Added: OK. I did a little research and some people are saying or have said in the past that their rent went up 300%. Maybe that's true, but I doubt there are that many cases of such, probably instances where the rental property owner wants to sell the place and build something different on the site. Which actually is their right although there may be some legal and zoning issues.

 

[Concerned American]

But those mantras re not applicable to the current scenario of 200-300% rent increases.

Link? Increases of that magnitude would not fly if people were either unable or unwilling to pay them. That is called a free market, a product sells (or rents) for whatever the market will bear.

 

[Concerned American]

Thye were all making perfectly good profits while raising rents no more than 5% per year,

General inflation has increased by over 8% this year. Fuel prices have increased over100% in the past year and you want to limit rental properties to 5%? That is ridiculous.