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This is what happens when you have rent control in your city. Residents who are lucky enough to live in under market housing become reluctant to move as they wi
by pg_bot 8y ago
This is what happens when you have rent control in your city. Residents who are lucky enough to live in under market housing become reluctant to move as they will be unlikely to receive another apartment at the rate they currently pay. Landlords have no reason to invest money back into buildings if they cannot recoup the investment. Rent control is bad public policy and should go the way of the dodo.[0]
[0] http://www.igmchicago.org/surveys/rent-control http://www.igmchicago.org/surveys/rent-control
- busterarm 8y agoThe data in NY shows pretty clearly that buildings with significant amount of stabilized and controlled units get an outsized share of Major Capital Improvements because that is the way you get your units to cross the stabilization threshold.
- darawk 8y agoCan I get a source on that? Asking honestly, i'm curious about how that might work.
- busterarm 8y agoI'll have to find it again but the MCI increase rate is capped at 6%/yr for stabilized tenants for this very reason. My landlord has hit between 4.8% and 6% every year without exception since 1991...for what? Besides the lobby I can't tell.
- DrScump 8y agoI would think that 27 years of such capital investment, if genuine, would result in some tangible, visible effect.
- pg_bot 8y agoYour statement is not inconsistent with mine. This is economics 101, price controls act the same way with housing as they do with oil. If those apartments could not be converted to the market rate, the investment would not be made. Market rate housing invests money over a longer period of time instead of a short burst.
- gowld 8y agoLand-Value tax first, abolish rent control second. Why don't the anti-rent-control advocates support land-value tax. Perhaps because they actually prefer distortions that favor themselves? https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
- pg_bot 8y agoThe issues of taxation and rent control are orthogonal. You don't have to own a rent controlled building to be an anti rent control advocate. In fact, owners of market rate buildings benefit from the existence of rent control and I know many of them dislike it. I'm very well aware of Georgism. In fact I agree that LVT is likely the least bad tax. However, there are challenges to implementation; mainly how to fairly assess the value of the land and what to do with capital improvements to it.
- pimmen 8y agoThere are absolutely challenges to it, but the same goes for removing rent control. How do you make sure there is no discriminatory pricing for example. We can't just say no to everything that doesn't work perfectly if it adds a lot of value to society.
- pg_bot 8y agoA lot of people ignore the cost of discrimination to the person who is discriminating. When you discriminate against someone you are eliminating the profits you would gain from doing business with them. In highly competitive markets with low profits you have limited ability to discriminate as your company will go out of business if it chooses to do so. In less competitive markets (monopolies) you are more likely to see discrimination since there is less of a cost paid by the discriminator. There is no magic wand to end discrimination entirely, but encouraging highly competitive markets is the best way to bridge the gap. If you want more detailed information about market discrimination, I suggest you read "Product Market Structure And Labor Market Discrimination"[0] The same principles apply to the housing market. [0]: https://www.amazon.com/Product-Market-Structure-Labor-Discrimination/dp/0791466248 https://www.amazon.com/Product-Market-Structure-Labor-Discri...