4 ms·

This idea is absolutely going to backfire and drive up rents because they are about to massively constrain the supply of rentable houses.

by pfisch 8y ago

iagovar 8y ago
It depends if current tenant/investors are impacted or not. If they aren't, the supply of rentable houses won't change, or at least not decrease.
- pfisch 8y ago
  It can only decrease. As in someone buys an existing lot, knocks down the house and builds a new house on it. Or a house burns down, or any other house destroying event.
  - hannasanarion 8y ago
    Or you could build apartments. The law doesn't say you can't build rental property, just that you can't build houses as an investment.
    - Macross8299 8y ago
      The law doesn't mandate building apartments either, so if the same people who build/buy houses as rental properties are unwilling/unable to invest in apartments (because building a 400-person complex is a lot more expensive than a house), then rental property supply can only be constrained by this law or concentrated into the hands of management companies (who have a vested interest in constraining supply) Furthermore, I'm not completely convinced that restricting rental property ownership to property management companies who can afford to build apartment complexes is inherently more equitable than letting a middle class person with good credit buy an extra house and rent it out. Where I'm from originally (Alberta), it was common for electricians/plumbers/tradesmen to buy an extra property with a combination of credit and wages and maintain it. It's a relatively simple and time-tested path for moving from working/lower middle class to being upper middle class or even wealthy.
  - iagovar 8y ago
    You can build new apartments and sell them. I see no problem in there.
tom_ 8y ago
The limiting factor is, roughly speaking, wages. Assuming landlords actually want to rent their properties out, the rents will go up to the maximum people can afford/are willing to pay - I'm not sure the distinction matters - and then go no further. (And it's possible they are already at that level, or near enough. It is after all the price point that a seller always tries to hit...)

This idea is absolutely going to backfire and drive up rents because they are about to massively constrain the supply of rentable houses.

by pfisch 8y ago

This idea is absolutely going to backfire and drive up rents because they are about to massively constrain the supply of rentable houses.

iagovar 8y ago

It depends if current tenant/investors are impacted or not. If they aren't, the supply of rentable houses won't change, or at least not decrease.

pfisch 8y ago
It can only decrease. As in someone buys an existing lot, knocks down the house and builds a new house on it. Or a house burns down, or any other house destroying event.
- hannasanarion 8y ago
  Or you could build apartments. The law doesn't say you can't build rental property, just that you can't build houses as an investment.
  - Macross8299 8y ago
    The law doesn't mandate building apartments either, so if the same people who build/buy houses as rental properties are unwilling/unable to invest in apartments (because building a 400-person complex is a lot more expensive than a house), then rental property supply can only be constrained by this law or concentrated into the hands of management companies (who have a vested interest in constraining supply) Furthermore, I'm not completely convinced that restricting rental property ownership to property management companies who can afford to build apartment complexes is inherently more equitable than letting a middle class person with good credit buy an extra house and rent it out. Where I'm from originally (Alberta), it was common for electricians/plumbers/tradesmen to buy an extra property with a combination of credit and wages and maintain it. It's a relatively simple and time-tested path for moving from working/lower middle class to being upper middle class or even wealthy.
- iagovar 8y ago
  You can build new apartments and sell them. I see no problem in there.

tom_ 8y ago

The limiting factor is, roughly speaking, wages. Assuming landlords actually want to rent their properties out, the rents will go up to the maximum people can afford/are willing to pay - I'm not sure the distinction matters - and then go no further. (And it's possible they are already at that level, or near enough. It is after all the price point that a seller always tries to hit...)