7 ms·

Rent control doesn't apply to new construction in California.

• WalterSear 7y ago
  Requiring a portion of builds be below market rate is an equivalent disincentive from builders perspective.
  • lostdog 7y ago
    Interesting point. It would only apply to the 15%-25% of below-market-rate units, so yes it would reduce supply, but not as much as making the entire building rent controlled (or below market rate).
    • WalterSear 7y ago
      Building is quite a risky proposition, mostly due to the large investments required, the time to recoup them, and the uncertainty of the costs. Delays and unforeseen issues quite often turn a construction into a money-losing venture. Once those risks are factored in, despite the large return on successful investments, the profits aren't great. So, it doesn't take much to make a proposition unattractive. Luxury apartments tend to be more attractive to builders not simply because they can make more money, but because the increased profit result in lower risk.