Rent control: Good or bad?

I do not see rent control as good and I do not think government should set prices for property owners because:

-Rent control hurts people that have recently moved to a new town.
-Property owners will not construct property for normal individuals as the prices that they can set for property will be regulated.
- Due to rent control property owners construct apartments that are too expensive for government to limit the price on these apartments.
- Rent control is an unnatural way of lowering housing costs. The only way for housing costs to be natural is for the government to not get involved.
- Tenants with low incomes are unable to pay landlords and as a result they are kicked out which adds to the number of homeless and increases poverty.
- Rent control is not good for landlords and individuals with low incomes

Good:
-Rent control makes housing affordable for people who cannot pay high prices
- Controlling prices of housing ensures that landlords from being dishonest and charging absurdly high prices thus causing less available housing
-
In overall I think rent control brings more negatives than positives.

What do you think of rent control?

In many cases throughout North American cities, there is a development boom on prime real estate properties. (Or at least there has been the last 20 odd years.) When a property owner who owns a small multi-dwelling residential unit, decides they want to tear down and partner up with a big development firm, to build a 100-500 unit building, they should be mandated to give rent control to existing tenants.

This keeps the disparity low which promotes a more integrated city, rather than having ghettos form out of poor areas.

This happens quite often as it stands, and probably should happen more.

They should also be mandated to build parking facilities, and commercial units on floor level suites, as it promotes local business and also invites additional business from outside the zone.

These things are all related to city planning, and it's not so much "telling them what they can or can't do" it's simply saying, if you want to do (x), you need to do (y) to get the permit.

When you visit cities that haven't taken these kinds of things into account you see the result. Ghettos, bare zones of commerce, lack of parking, etc.

More rules!

Lets add more rules! We all know it helps!

Oh wait... we dont want a totalitarian society we want to find a balance between liberty and regulation.

Lets focus on changing our culture so everyone isnt screwing everyone over to increase their bottom line.

I was a little off on a tangent there on a specific example. As far as rent control overall, or having regulations on the market of renting... again, there needs to be some oversight. Whether it is renters association or landlord association, in agreement, or if it's done by government, there needs to be some standards.

Professional associations are good, but when one has too much power they tend to kneecap their opposition. Government tend to waste bags of money so long as they can get their hands on it.

No agreed upon rules or regulations can turn things into a mess dependent on the individual owner. (Jacking rates for no apparent reason besides needing the money.)

reply to post by Covelle


I'm all for an 8-10% increase in housing costs year-over-year. I enjoy giving money away.

In my experience with rent control, as a renter, what happened was a) the rent was a lot higher than it should be and b) rental housing became scarce, pushing rents even higher.

I believe that, initially, rent control was meant to be a positive for the initial renters at the expense of the landlords. But it was more about buying votes really. Rent control became a negative for anyone new to the area. It backfired pretty seriously over about a 10 year period. It sounds nice that the "evil" landlords are supposed to be damaged. But it really is a form of theft that drives rent control. What isn't usually considered is that the people being stolen from do change what they do in response.

After a short time, I noticed that the rents in our complex appeared to get much higher for the new leases to make up for future lack of ability to raise rent to meet expenses, especially repairs. In addition, I noticed that there were very few new buildings / complexes put up in the area for new renters -- they all became condos instead. Plus a lot of former rentals were turned into condos. The result was much higher rent and almost nothing available worth living in. Only a couple long term renters in our old complex had a benefit that lasted more than a couple of years -- we ended up leaving for a city without rent control and a little longer commute. There were plenty of places to rent there.

If all taht wasn't enough, the landlord became a lot less friendly than they had been. Repairs were delayed, complaints went unanswered for long periods, and being a day late on the rent was a big deal..... They can make a lot more on the next guy if they can make you uncomfortable enough to move out. Landlords don't take well to being stolen from whether legal or not. They change.

Not certain if any real difference is present between that and the current way of doing things. Rents are ridiculously high as they are, and increase even as wages stagnate. So rents are going up wither way. People's income, however, is not rising so quickly.

Landlords are having a field day millions made homeless by the banks some illegally then they create a shell company and rent the houses back at top dollar ,

It is like everything else in life blink and the price goes up but not the wages they should be fixed people are sick off the struggle in life and are just trying to get by in life .

but mr landlord wants a 10% return on his money year round

rent control GOOD

Only necessary in boom towns as far as I'm concerned. I lived in a boom town that exploded over the oil patch and there was a ton of money flying around. Fast food joints were paying $15 an hour because they couldn't keep people (since the oil companies were paying people with no experience what so ever $8000 a MONTH. The only problem was that the landlords all hiked the rent up, and if you weren't in the oilfield you were barely getting by (even on $15+ an hour) because your 1 bedroom slum apartment was now costing you $1400 a month.

It got so bad that landlords were hiking the rent on people every month because there was a housing shortage and a huge influx of people who were coming in to find work. Landlords didn't care if you couldn't pay the increase because they could just give you the boot and choose from a long list of people lined up to take your place. Eventually the government had to step in and change the laws so that landlords could only implement rental hikes so many times per year and with a certain period of notice.

Situations like that, I think rent control is a reasonable idea.

reply to post by Covelle


What they do is allowing the building, house owners to raise the rent a certain percentage a year. What you can expect is more rent each year... that is what it is about. Part of an other 'legalized' scam.

But it was more about buying votes really. Rent control became a negative for anyone new to the area. It backfired pretty seriously over about a 10 year period. It sounds nice that the "evil" landlords are supposed to be damaged.

reply to post by BayesLike


Can you cite any studies...or research to support your above claim? To which ten year period were you referring?

DeadSeraph
Only necessary in boom towns as far as I'm concerned. I lived in a boom town that exploded over the oil patch and there was a ton of money flying around. Fast food joints were paying $15 an hour because they couldn't keep people (since the oil companies were paying people with no experience what so ever $8000 a MONTH. The only problem was that the landlords all hiked the rent up, and if you weren't in the oilfield you were barely getting by (even on $15+ an hour) because your 1 bedroom slum apartment was now costing you $1400 a month.

It got so bad that landlords were hiking the rent on people every month because there was a housing shortage and a huge influx of people who were coming in to find work. Landlords didn't care if you couldn't pay the increase because they could just give you the boot and choose from a long list of people lined up to take your place. Eventually the government had to step in and change the laws so that landlords could only implement rental hikes so many times per year and with a certain period of notice.

Situations like that, I think rent control is a reasonable idea.

You are talking about my neck of the woods....

...from a landlord: i spent 15 years seeing a completely stagnant economy locally. Employment was moderate, wages were low, and costs were low.

Then the oilfield boomed. Wages increased, meaning that my plumbing contractor now had to spend more on his staff. On top of that, he had to spend more on parts and other items, as his suppliers had to pay their staff more. The other option: lose your staff to the Big Dog Drilling at twice the pay rate, and then you can hire some slackers who can't pass the oilfields drug tests.

So that service call to fix your air conditoner that used to cost me $500....will now cost me $800-$1000.

Add on top of that the tax districts salivating at their chance to finally start banking some cash, and doing desparately needed renovations to various municipal and school related properties/assets. My property tax increaed 15% this past year, on property that had no capital investment made.

Add on top of that...now you have a different class of worker. Where we used to rent to various medical support staff, or sales staff, they are now replaced by roughnecks. With all that asphalt, chert, and carbon all over their clothes. I had to remove carpet from every house last year and replace it with wood flooring or tile.

I manage these properties for my mother. It was the retirement plan her and my dad had put together. With him gone, she was overwhelmed so I stepped in. When you factor in all the costs, she netted from her rental properties a grand total of about $50k last year. Had she not increased rent by 40%, she would have actually lost money on her properties.

reply to post by bigfatfurrytexan


Well there is always 2 sides to the story. You won't hear me arguing that much. But I would point out that while most landlords might be having their costs increase in such situations, they are hiking their rents to keep their profits in line with their costs. Average working people don't have profits coming in from multiple properties and 401k's and all that other crap. Most of them are just trying to pay their rent, keep their cupboards stocked, and their bills paid and live paycheck to paycheck. When I hear someone say they only made 50k from their property investments in a particular year I don't particularly feel all that sorry for them since I have never even made that much in a year from a full time job.

DeadSeraph
reply to post by bigfatfurrytexan

 

Well there is always 2 sides to the story. You won't hear me arguing that much. But I would point out that while most landlords might be having their costs increase in such situations, they are hiking their rents to keep their profits in line with their costs. Average working people don't have profits coming in from multiple properties and 401k's and all that other crap. Most of them are just trying to pay their rent, keep their cupboards stocked, and their bills paid and live paycheck to paycheck. When I hear someone say they only made 50k from their property investments in a particular year I don't particularly feel all that sorry for them since I have never even made that much in a year from a full time job.

Thats funny....so is my mother. Especially when renters have a sob story about why they cannot pay their rent on time. So then she turns to me to do things like pay her electricity, or her property taxes.

What you call "profits" she is calling "income". It is her only income, and she kicked her ass, elbow to elbow with my dad (and often times me) turning condemned houses into new homes just so she wouldn't have to struggle in her retirement years. Each of those homes has the blood, sweat, and tears of her and her deceased husband.

She is an average working person. She was an adminstrative assistant for an oilfield supply company, and my dad was an electrical lineman. When we were going to be left homeless because we couldn't make the house payment when I was in high school, the only choice was to get crafty about our situation. So they bought 2 houses (side by side) for the cost of the lot alone (about $2k total), both condemned and ready for demolition. We were able to fix both up and rent 1 of them to pay for both, so we could live without the fear of being homeless. She "bootstrapped" her entire retirement. There is no entitlement. Just an old redneck family that got tired of dad getting sent home early everyday because the oilfield was in a bust cycle and there was no work to be done.

You could do the same. As could anyone. I see no reason for a choice to NOT do what she did to be a reason that she should feel guility. She earned her retirement. Bottom line. I can attest to it....i was there.

reply to post by bigfatfurrytexan


I never said she should feel guilty (nor did I imply that you should). I'm simply pointing out that the argument of costs increasing for landlords, while valid, is only telling one side of the story since landlords are increasing costs to keep their profit margins at a comfortable level.

To put my situation into perspective, when I first moved into my appartment in the location I mentioned previously, I had just started a new job and was only making $9 an hour. That was ok, since my rent was $600 a month, and I knew my landlord personally (he was a good guy). He did everything he could to keep his rental prices fair, and I respected him for that. Eventually, he felt it wasn't worth the hassle and he sold the building to a big property company (presumably to retire on the profits he made, as he was my former high school principal). Once he sold the building, my rent immediately went up $300 a month to $900. Things were getting tight at that point, and I only got a $1 an hour raise at work after being there for 2 years.

The following year, the oil boom hit, and my rent subsequently went up $200 a month every 1-3 months. At one point, I was paying $1500 a month in rent for a tiny, dingy, run down little 2 bedroom apartment, and I had no choice but to move a 3rd roommate in to cover the rent. We had myself and my roomie in the 2 bedrooms, and a 3rd guy living in the livingroom. My job however, didn't scale with the economy, since it was not tied to construction or the oilfield or service industry in any way. I was making on average $1600 a month at that time, but my rent was $1500, and it was actually the cheapest building in the city. If I were to move out and look for a 1 bedroom instead, I would have been paying $1600 a month without the benefit of having 2 roomies to help with costs (which would have been 100% of my income).

Was the realty company I was paying out the ass to a struggling mom and pop operation just trying to keep their heads above water? No. They were and are a multi-billion dollar company that frequently buys up property in thriving locations and jacks up the rent on people to earn obscene profits.

Now I can't say what I would do if I owned rental properties in that situation because I've heard money changes people. But from where I sit here, If I was bringing in income from a job and the profits I was earning from my property were being used for disposable income or investments, I would probably not gouge everyone I possibly could, and try and find a reliable hard working tenant that could use a hand and keep the rent stable for them. But I have never been in that position before, so who knows if I would change my mind once the money started rolling in and I didn't have to work anymore.

Bottom line is this: Your situation (and that of your parents) is a lovely story, and I respect where you and your parents came from, and the hard work you put in to get where you are. Not everyone has the same story however, and some people really are rich, soulless, blood sucking vampires who don't care who they ruin to earn a profit. THAT is why limits on rental hikes exist, because many people have no qualms about taking advantage of others to line their own pockets.

DeadSeraph
reply to post by bigfatfurrytexan

 

I never said she should feel guilty (nor did I imply that you should). I'm simply pointing out that the argument of costs increasing for landlords, while valid, is only telling one side of the story since landlords are increasing costs to keep their profit margins at a comfortable level.

To put my situation into perspective, when I first moved into my appartment in the location I mentioned previously, I had just started a new job and was only making $9 an hour. That was ok, since my rent was $600 a month, and I knew my landlord personally (he was a good guy). He did everything he could to keep his rental prices fair, and I respected him for that. Eventually, he felt it wasn't worth the hassle and he sold the building to a big property company (presumably to retire on the profits he made, as he was my former high school principal). Once he sold the building, my rent immediately went up $300 a month to $900. Things were getting tight at that point, and I only got a $1 an hour raise at work after being there for 2 years.

The following year, the oil boom hit, and my rent subsequently went up $200 a month every 1-3 months. At one point, I was paying $1500 a month in rent for a tiny, dingy, run down little 2 bedroom apartment, and I had no choice but to move a 3rd roommate in to cover the rent. We had myself and my roomie in the 2 bedrooms, and a 3rd guy living in the livingroom. My job however, didn't scale with the economy, since it was not tied to construction or the oilfield or service industry in any way. I was making on average $1600 a month at that time, but my rent was $1500, and it was actually the cheapest building in the city. If I were to move out and look for a 1 bedroom instead, I would have been paying $1600 a month without the benefit of having 2 roomies to help with costs (which would have been 100% of my income).

Was the realty company I was paying out the ass to a struggling mom and pop operation just trying to keep their heads above water? No. They were and are a multi-billion dollar company that frequently buys up property in thriving locations and jacks up the rent on people to earn obscene profits.

Now I can't say what I would do if I owned rental properties in that situation because I've heard money changes people. But from where I sit here, If I was bringing in income from a job and the profits I was earning from my property were being used for disposable income or investments, I would probably not gouge everyone I possibly could, and try and find a reliable hard working tenant that could use a hand and keep the rent stable for them. But I have never been in that position before, so who knows if I would change my mind once the money started rolling in and I didn't have to work anymore.

Bottom line is this: Your situation (and that of your parents) is a lovely story, and I respect where you and your parents came from, and the hard work you put in to get where you are. Not everyone has the same story however, and some people really are rich, soulless, blood sucking vampires who don't care who they ruin to earn a profit. THAT is why limits on rental hikes exist, because many people have no qualms about taking advantage of others to line their own pockets.

It sounds like you were in Midland, TX when that happened. If i were to hazard a guess.

From a business perspective, however..."profit margins" are what you call "a paycheck". Even if some have much larger paychecks.

It sucks for the regular person when the oilfield booms. The roughnecks are hard on property, so rent has to be adjusted to account for it. That makes it hard for that single mom of 3 that just needs a place to live. Especially when those single moms of 3 tend to lie about who is goign to be living with them. We just had to evict 2 houses full of people on leases that were supposed to be just some poor single mom trying to make ends meet.

It is unfortunate that the most manipulative in our society also tend to have the best sob stories.

reply to post by bigfatfurrytexan


Alberta, Canada actually. But they do call this province "The Texas of Canada" so the similarities don't surprise me. The whole province is pretty much fuelled by the oilfield, but especially so the more northern regions where there were some large discoveries and huge amounts of exploration due to the advancement of directional drilling. The city I used to live in was an oilfield hub and connected all the northern towns, cities, and regions where the oilfield was booming. It really was quite remarkable to see the effect it had on such a small community (it was originally listed at a population of 55,000 and pretty much doubled in the span of 2 years). As with most things, there were a lot of cons that came with all the pros of the booming economy.