Quote:
Originally Posted by MonkeyRonin
That's great in theory, and might work out just fine in lower-cost, less competitive markets, but it doesn't really go like that in higher-demand, higher-cost places.
The purpose of rent control is not to create a cheaper housing market - it's to protect tenants from rent increases beyond what they can bear. And in those high-cost, high-growth markets, that is absolutely essential because there isn't necessarily going to be a cheaper alternative.
I'm guessing you've never lived or owned somewhere with rent control, but that's not really how it works. In most cases, there is an regulated max annual allowable increase in rates that reflects inflation & utility price growth. Likewise, if there is substantial maintenance required, a landlord can apply for an above-guidline rental increase.
Also, when leasing to a new tenant you can charge them whatever price they'll agree to (which presumably, would be enough to cover your mortgage & expenses, and as high as the market will bear at that time). So unless you're a completely incompetent as a landlord you should never be losing money on a tenant.
I can't say I really have any sympathy for landlords being unable to increase their rates after-the-fact because they would like to make more money than what they had originally agreed to.
Because - even assuming there even is a supply of other available cheap housing - being forced to move is just so easy, right!?
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You're not getting the economics. The worst effects of rent control are specifically in the expensive markets...it's no coincidence that NYC and SF are both rent control cities.
In a busy market, supply and demand play a huge role. Demand fills the supply, which expands when the cost/risk/reward equation merits it. New supply is the pressure valve. If the local rent control law adds risk to the equation (for example curtailing rents in 15 years, restricting future value) then less gets built, adding scarcity, and raising market rents.
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