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> No-one would move, ever. People wouldn't be able to change jobs even for much higher salaries or better conditions. Children would live with their parents for

by lexs 7y ago

> No-one would move, ever. People wouldn't be able to change jobs even for much higher salaries or better conditions. Children would live with their parents forever. Many people would live precariously in illegal sublets with inadequate fire exits etc. Why?

lmm 7y ago
Because anyone who's been living in the same place for a while is paying well below-market (by design, otherwise there'd be no point in the rent control). Actually it's worse than that: the market rate rises much faster because landlords have less upside so there's little reason to build, and existing buildings can make more money as offices rather than residential. And when there's a huge gap between what a new tenant would have to pay and what the current tenant pays, that creates a huge incentive to do illegal sublets, and if your sublet is already illegal then why bother spending money complying with fire regulations or any other safety regulations?
- djd20 7y ago
  This depends how you implement rent control. The UAE market has rent controls - the landlord is only allowed to adjust rents within a % and if the rental index of the area is more than 10-15% higher than what you are currently paying. They are also building plenty of new housing to help keep rents stable. This second part is key - and needs to be there for this to work. Your comments assume a rental market that is not increasing in supply.
  - lmm 7y ago
    I'm assuming a rental market that isn't increasing in supply because that's the case that rent control is designed to address. If you're building enough supply to keep market-level rents low then rent control becomes irrelevant.
- Beldin 7y ago
  Wait: the regulation would not apply to new rentals? Yeah, that creates obvious problems. If the policy were to apply to all leases, new as well as existing ones, would the problem be somewhat mitigated? (That's basically how things work here for student housing. Far from perfect, but more sane than housing in the Valley)

by lexs 7y ago

lmm 7y ago

Because anyone who's been living in the same place for a while is paying well below-market (by design, otherwise there'd be no point in the rent control). Actually it's worse than that: the market rate rises much faster because landlords have less upside so there's little reason to build, and existing buildings can make more money as offices rather than residential. And when there's a huge gap between what a new tenant would have to pay and what the current tenant pays, that creates a huge incentive to do illegal sublets, and if your sublet is already illegal then why bother spending money complying with fire regulations or any other safety regulations?

djd20 7y ago
This depends how you implement rent control. The UAE market has rent controls - the landlord is only allowed to adjust rents within a % and if the rental index of the area is more than 10-15% higher than what you are currently paying. They are also building plenty of new housing to help keep rents stable. This second part is key - and needs to be there for this to work. Your comments assume a rental market that is not increasing in supply.
- lmm 7y ago
  I'm assuming a rental market that isn't increasing in supply because that's the case that rent control is designed to address. If you're building enough supply to keep market-level rents low then rent control becomes irrelevant.
Beldin 7y ago
Wait: the regulation would not apply to new rentals? Yeah, that creates obvious problems. If the policy were to apply to all leases, new as well as existing ones, would the problem be somewhat mitigated? (That's basically how things work here for student housing. Far from perfect, but more sane than housing in the Valley)