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What Are the Real Life Examples of Rent Control Failing?

Hawkeye10 said:
Why not allow the city to expand based upon its popularity....Seattle for instance looked at the ramifications of San Francisco's no growth/low growth program.....needles and **** all over and the average 1 bedroom apts going for on average almost 4K a month and said "This is nuts!". Now I grant you that in other ways they city is a wreck now and in particular the leadership is horrible but this decision years ago is now resulting in a lot of housing coming online, and the rents are dropping (again in part because of bad leadership causes job growth to end, in fact both Amazon and Starbucks are in the process of diversifying out of Seattle because they have had their fill of bad city stewardship and how that impacts their employees) .....Is it not the case that if people want to live in a city and if they do rents will go up and if rents go up holders of capital will want to build and after they do rent goes down again....could it be that the politicians who do not allow growth caused this problem of unaffordable rents that they want to solve by becoming in charge of rents? Could it be that government is right in front of you building up its power, its ability to control the citizens, maybe the ability to scare the citizens into approving bigger more powerful government, which is in fact a forfeiture of the citizens freedom by the citizens who are maybe scared?

After all of the failed attempts at UTOPIA building we have seen over the last 100 years, tending to end in misery and death.....

Maybe we let the markets work instead.
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I can understand a city wanting to limit its growth. We don't want our cities to become Sao Paulo.

I just don't understand the incessant defense of unearned income. How does the landlord improve society?

Sent from my HTC phone. Instaurare omnia in Christo.
 
phattonez said:
I can understand a city wanting to limit its growth. We don't want our cities to become Sao Paulo.

I just don't understand the incessant defense of unearned income. How does the landlord improve society?

Sent from my HTC phone. Instaurare omnia in Christo.
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You mean besides the obvious of providing the majority of the capital to grow and maintain the city I hope...
 
Hawkeye10 said:
You mean besides the obvious of providing the majority of the capital to grow and maintain the city I hope...
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The landlords extracting rent don't do that. The people do that. Owning property doesn't produce wealth. Unearned income doesn't add to society.

Sent from my HTC phone. Instaurare omnia in Christo.
 
phattonez said:
The landlords extracting rent don't do that. The people do that. Owning property doesn't produce wealth. Unearned income doesn't add to society.

Sent from my HTC phone. Instaurare omnia in Christo.
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No, the landlords provide the capital and then make it back by charging rent.

If you get rid of the landlord who provides the money to build?

How do they get it?
 
phattonez said:
Yet we already have exorbitant rents even without it! Your worst case scenario already exists!

Sent from my HTC phone. Instaurare omnia in Christo.
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Nah, you haven't seen anything yet if rent control happens.
 
phattonez said:
How? The landlord would sell and then push property prices down. The tenants could instead buy at lower prices.

Sent from my HTC phone. Instaurare omnia in Christo.
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You keep spouting that mantra, but most renters are not in a position to buy. That's why they rent.
 
phattonez said:
Did Houston become the most expensive city in the country since then?

Sent from my HTC phone. Instaurare omnia in Christo.
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Why does that matter?
 
phattonez said:
The landlords extracting rent don't do that. The people do that. Owning property doesn't produce wealth. Unearned income doesn't add to society.

Sent from my HTC phone. Instaurare omnia in Christo.
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Landlords provide the capital to invest in rental properties that can be rented out. The less capital required to invest, the more likely rental properties will be created, and with an increase in supply, rents would be lower (than otherwise would be).

As for rent control, in general it is a bad idea. At the very most, it should be only used to limit the increase in rent on a yearly basis to at a level like say 15% to any existing tenant. New tenants can see a new base level. That is the most any rent control should do.

A better solution is requiring developers include high density housing (as a % of total housing units in a development). The city in which I live a few years ago created a law that requires new developments to include a certain amount of high density housing in the new community. From townhomes to apartment style condo's, a certain number is required as a % of the single family homes in the community. This certainly increases the number of potential rental units as many of those apartment style condo's are bought by investors to be used as rental units. This does not do anything for rental units in the city center. Where the older, smaller houses are being torn down and being replaced by larger infill houses at much higher prices
 
phattonez said:
And how is society being made better off by having people invest in rental housing as a profitable enterprise? It's driving up home prices and forcing many people to rent when they would rather buy. Do you think that the home ownership rate as fallen as much as it has among young people because they want to live that way?
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People rent for many reasons, and people making money off of selling what other want is capitalism.
 
Hawkeye10 said:
No, the landlords provide the capital and then make it back by charging rent.

If you get rid of the landlord who provides the money to build?

How do they get it?
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When a landlord buys an existing property, hires a property manager, and hires a maintenance man, what exactly has he contributed that benefits to society?

And typically home buyers provide capital to homebuilders when they buy the property. It's not as if I'm arguing that home builders should be ignored.
 
Bullseye said:
Nah, you haven't seen anything yet if rent control happens.
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So the cities that have it are far worse? There doesn't seem to be much evidence that it could get any worse than it is now.
 
Bullseye said:
You keep spouting that mantra, but most renters are not in a position to buy. That's why they rent.
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They're not in a position to buy because home prices have outpaced wage inflation for decades. Why has that happened? We've made it more economical to buy property and rent it out, which has pushed up home prices as investors seek yield. How has this been good for society?
 
Bullseye said:
Why does that matter?
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Because your criticism is meaningless, the same conditions still apply today. Houston is not an expensive city.
 
Lord Tammerlain said:
Landlords provide the capital to invest in rental properties that can be rented out. The less capital required to invest, the more likely rental properties will be created, and with an increase in supply, rents would be lower (than otherwise would be).
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The opposite seems to be true. We have among the highest renting percentage ever and about the highest rents ever. Still housing starts are at historic lows.

FT_17.07.17_renters_featured-1.png


As for rent control, in general it is a bad idea. At the very most, it should be only used to limit the increase in rent on a yearly basis to at a level like say 15% to any existing tenant. New tenants can see a new base level. That is the most any rent control should do.
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Why? You didn't really substantiate this position.

A better solution is requiring developers include high density housing (as a % of total housing units in a development). The city in which I live a few years ago created a law that requires new developments to include a certain amount of high density housing in the new community. From townhomes to apartment style condo's, a certain number is required as a % of the single family homes in the community. This certainly increases the number of potential rental units as many of those apartment style condo's are bought by investors to be used as rental units. This does not do anything for rental units in the city center. Where the older, smaller houses are being torn down and being replaced by larger infill houses at much higher prices
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So you're in effect increasing capital requirements to build any housing. Has this really been prove to increase supply? Why aren't we instead supporting policies that create jobs outside of our crowded metro areas and into our smaller cities where housing is plentiful and cheap?
 
longview said:
People rent for many reasons, and people making money off of selling what other want is capitalism.
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At what point does it become exploitation? I can convince a man dying of thirst to sell me his life savings for a bottle of water. Is that okay?
 
phattonez said:
They're not in a position to buy because home prices have outpaced wage inflation for decades. Why has that happened? We've made it more economical to buy property and rent it out, which has pushed up home prices as investors seek yield. How has this been good for society?
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It created more homes for rent for those unable to buy.
 
Bullseye said:
It created more homes for rent for those unable to buy.
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Yet rents are taking up 30-50+% of their income. Let's not act as if housing has become more affordable. It hasn't.

Sent from my HTC phone. Instaurare omnia in Christo.
 
phattonez said:
I'm not convinced that we need them in the market.

Sent from my HTC phone. Instaurare omnia in Christo.
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Of course we need landlords in the market who want to make a profit, without them there would be NO rental
unit except for public housing.
Let's say someone has $250K to invest, They want to make as much off of that $250K as possible.
If they invested in rotating, 12 month CD's at 2%, they could earn $5000 a year on their investment.
If they purchased a house, whose taxes, insurance, and maintenance were below $1000 per month,
and the rent was $2000 a month, they could double the income from their investment.
It really is just that simple, unless the people who own rental units have a way to earn income from
the investment, they will not do it.
 
phattonez said:
When a landlord buys an existing property, hires a property manager, and hires a maintenance man, what exactly has he contributed that benefits to society?

And typically home buyers provide capital to homebuilders when they buy the property. It's not as if I'm arguing that home builders should be ignored.
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Let us consider what the landlord has contributed that benefits society in your scenario.
His money is invested in the community, He pays property taxes, He pays insurance that helps keep
people employed. He provides an income for the property manager and the maintenance man,
and lastly he provides rental units that are in demand. And from all of this he may make a small income
from his investment.( Some years he looses money because more things break, or go wrong.)
 
phattonez said:
At what point does it become exploitation? I can convince a man dying of thirst to sell me his life savings for a bottle of water. Is that okay?
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Exploitation, by whom? What goes into the monthly rental price?
Say an apartment rents for $2000 a month, and the taxes, maintenance, and insurance, cost $1500 per month.
Who is getting most of the rent?
 
longview said:
Of course we need landlords in the market who want to make a profit, without them there would be NO rental
unit except for public housing.
Let's say someone has $250K to invest, They want to make as much off of that $250K as possible.
If they invested in rotating, 12 month CD's at 2%, they could earn $5000 a year on their investment.
If they purchased a house, whose taxes, insurance, and maintenance were below $1000 per month,
and the rent was $2000 a month, they could double the income from their investment.
It really is just that simple, unless the people who own rental units have a way to earn income from
the investment, they will not do it.
Click to expand...

Sounds like a great setup for the landlord. How does this help renters and potential home owners?
 
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