It sounds wonderful at first, but go deeper. We will end up with a shortage of available rentals. Rent control will make it worse. It has already happened in several California communities with rent control.
First, rental homes will be sold as the rent will not cover the increasing costs of taxes, insurance, and repairs. Once sold, rental homes will then be owner-occupied.
Second, there will be no incentive for developers to build rental units. They are developers, not rental companies.
Third, existing apartment buildings may be sold as condos and will be owner-occupied.
No experienced person will buy a home with the intention of renting it. Costs of maintaining rentals would increase—taxes, utilities, insurance, and repairs will no longer be covered by controlled rent.
Think of potatoes. If there is price control, farmers will plant something else. So no potatoes for supper. Same with rentals. Owners will sell and invest elsewhere.
So think this through before you vote. We already have a rental housing shortage.
Patricia Lloyd
Los Osos
This article appears in Education Today 2019.
Price controls always work exactly wrong. They stop the production of additional needed resources. The reason rents are too high, is that there are too few rental units. If you add “rent controls” there will be fewer rental units, and the problem will get worse. Dick Nixon tried to stop inflation with wage and price controls. He nearly destroyed the economy.
This is socialism’s greatest failure. “Government” often believes it can regulate things without understanding them. It destroys the incentives that make free societies successful. What we need are fewer building fees and unnecessary costs to builders. In SLO it now costs more than $90,000 in government fees to build the smallest house (plus, of course, the time and bureaucracy requirements which slow construction).
All price controls are absurd. This is one of the reasons we also need to enforce our anti trust laws more vigorously, because they too result in artificially high prices.
The only rent control is in 55+ mobile home parks and none of the negative outcomes described by these commentators has ever been a problem. The article appears biased towards an array of con men in realty and housing construction. They sound like mini-Trumps.
There is another aspect about rent control that must be addressed, the landlords side of the story. I, have been a land lord from about 1970. From oldest history home prices have always gone up over time. There have many down turns during the overall rise in prices but the trend has always been up. Using history as my guide I elected to risk the short time lows and forgo instant gratis- faction so I saved and scrimped to purchase my first rental house. My goal was to have an income when I retired. Risk is high, current rental laws are written to protect renters and penalize land lords. Renters can cause extensive damage and it is extremely hard to evict one even when they fail to pay the rent. During nearly 50 years of being a land lord I have never raised the rent on a tenet while they rented with me. One renter increased it themselves because they knew I was charging way too little. In 2009 I raised the rent $100 per month because my property taxes increased by $1200 that year, but the house was vacant at the time. A large number of local bond issues has been enacted that renters helped pass. Renters dont understand that the free benefits from the government are paid by income and property taxes. If rent control is passed I will raise rents the maximum each year. I recommend and encourage all other land lords do the same!
All three writers are correct.
Watch out for unintended consequences.
Those mobile home parks work well until they are sold and a new mortgage raises the costs which must be passed on to the residents.
Why do so many forget that money is not free. you have to earn it or borrow it and to live off it you need a fair return on investments.