4 ms·

I'm no fan of rent control, but your argument doesn't make any sense to me. Who is this landlord that's only charging more for one of their units because the ot

I'm no fan of rent control, but your argument doesn't make any sense to me. Who is this landlord that's only charging more for one of their units because the other units are rent controlled? If they could charge more for a unit, why wouldn't they? Can you imagine someone who says to themselves... "I could get someone to pay me $3000 a month for this unit. Thank God that rent controlled tenant moved out of one of my other unit. Now I only have to charge $2500 for this one to make ends meet. I didn't want that extra $500 anyway." Rent control is bad because over time it screws up supply and demand, and increases the the rent that the market can bear. Not because it gets in the way of the landlords' natural charitable instincts.

username90 6y ago
People are willing to pay more for rent controlled units. So when laws forces everyone to buy rent controlled it screws over those who don't intend to stay long since they pay the premium without getting anything for it.
rsj_hn 6y ago
market power means you can capture all of the benefit for yourself - e.g. you charge what the market will bear for a service rather than what it costs you to provide that service. So you cannot argue that you will make a unit more valuable, thus increasing demand for the unit, but that a landlord who has market power will not be able to raise prices to fully capture that benefit. Rent control is such a benefit that makes a unit more valuable, and landlords are able to charge more, fully capturing the benefit to the average renter. This means long term renters underpay, short term renters overpay, the landlord does not pay any more, on average, given the mix of short and long term tenants, but the short term tenants subsidize the long term tenants. So all of these plans to pass laws preventing or obligating landlords in some way will always result in higher rents to fully push the value of that benefit onto tenants, assuming that landlords have market power, which is a safe assumption in constrained areas like San Francisco.

username90 6y ago

People are willing to pay more for rent controlled units. So when laws forces everyone to buy rent controlled it screws over those who don't intend to stay long since they pay the premium without getting anything for it.

rsj_hn 6y ago

market power means you can capture all of the benefit for yourself - e.g. you charge what the market will bear for a service rather than what it costs you to provide that service. So you cannot argue that you will make a unit more valuable, thus increasing demand for the unit, but that a landlord who has market power will not be able to raise prices to fully capture that benefit. Rent control is such a benefit that makes a unit more valuable, and landlords are able to charge more, fully capturing the benefit to the average renter. This means long term renters underpay, short term renters overpay, the landlord does not pay any more, on average, given the mix of short and long term tenants, but the short term tenants subsidize the long term tenants. So all of these plans to pass laws preventing or obligating landlords in some way will always result in higher rents to fully push the value of that benefit onto tenants, assuming that landlords have market power, which is a safe assumption in constrained areas like San Francisco.