4 ms·

Is it worse if now there is a special class of people who happened to be in the right buildings at the right time when this law passed who will now forever get

Is it worse if now there is a special class of people who happened to be in the right buildings at the right time when this law passed who will now forever get discounted rent, leaving everybody else to pay full price?

rbranson 6y ago
This sounds a lot like land ownership.
- DamnYuppie 6y ago
  Well in most of US you can pay off the land but you still have property taxes which can go up. Also the tax basis can be adjusted based on the market value of similar properties in your area.
  - rbranson 6y ago
    Not in California.
- BurningFrog 6y ago
  It turns renters into a kind of owners, yes.
  - foolinaround 6y ago
    a kind, that enjoys the upsides, but can run away when there are downsides without any consequences?
    - sudosysgen 6y ago
      Which downsides can they run away from? They pay for maintenance, property taxes, and so on. And still pay a premium over that.
      - compiler-guy 6y ago
        They don't pay for these things if their rent is fixed.
        sudosysgen 6y ago
        The vast majority of rent controlled cities have rent control boards where landlords can request and increase in rent in case of exceptional circumstances. In those cases, the landlord must show that the rent is not enough to cover maintenance, and the increase is granted. In general though, maintenance on average only costs ~150-300$ a month, so it's not necessary.
    - La1n 6y ago
      >enjoys the upsides, but can run away when there are downsides without any consequences? Isn't that why landlords argue they should make profit, because they carry the risk?
    - rbranson 6y ago
      I don’t know why I have to explain this, but I’m not aware of any situation in which a renter builds equity in the underlying asset either. Under rent control the situation goes from being extremely advantageous to the landlord to just being regular advantageous.
sudosysgen 6y ago
You mean, exactly like people who have enough money to buy instead of rent as real estate values keep climbing? In Berlin, people that already have social relations and support structures are the one that get discounted rent, which is what we want! This is better than if wealthy people get to pay less for housing. It's not as if the alternative made it cheaper.
crote 6y ago
Exactly, it should be extended to all rental units. An important part of the regulation is that the landlord cannot raise the rent when a new tenant moves in - the rent is locked for the unit, not the tenant. This prevents situations like New York, where you are essentially unable to move.
- ggreer 6y ago
  > An important part of the regulation is that the landlord cannot raise the rent when a new tenant moves in - the rent is locked for the unit, not the tenant. This prevents situations like New York, where you are essentially unable to move. Mumbai did this and it was a disaster: https://marginalrevolution.com/marginalrevolution/2017/04/twisted-tale-rent-control-maximum-city.html https://marginalrevolution.com/marginalrevolution/2017/04/tw...
- PeterisP 6y ago
  The consequence of that, as claimed in the article, is that when the old tenant leaves, it often ceases to be a rental property - it's not offered for rent but put on sale for someone who'll live there as an owner. Already there are half as many spaces available for rent as it was a few years ago, and the number is still shrinking. If this goes on, most of the rental stock will get converted to non-rental and you'll be able to move only if you can get sufficient credit to buy the dwelling.

rbranson 6y ago

This sounds a lot like land ownership.

DamnYuppie 6y ago
Well in most of US you can pay off the land but you still have property taxes which can go up. Also the tax basis can be adjusted based on the market value of similar properties in your area.
- rbranson 6y ago
  Not in California.
BurningFrog 6y ago
It turns renters into a kind of owners, yes.
- foolinaround 6y ago
  a kind, that enjoys the upsides, but can run away when there are downsides without any consequences?
  - sudosysgen 6y ago
    Which downsides can they run away from? They pay for maintenance, property taxes, and so on. And still pay a premium over that.
    - compiler-guy 6y ago
      They don't pay for these things if their rent is fixed.
      - sudosysgen 6y ago
        The vast majority of rent controlled cities have rent control boards where landlords can request and increase in rent in case of exceptional circumstances. In those cases, the landlord must show that the rent is not enough to cover maintenance, and the increase is granted. In general though, maintenance on average only costs ~150-300$ a month, so it's not necessary.
  - La1n 6y ago
    >enjoys the upsides, but can run away when there are downsides without any consequences? Isn't that why landlords argue they should make profit, because they carry the risk?
  - rbranson 6y ago
    I don’t know why I have to explain this, but I’m not aware of any situation in which a renter builds equity in the underlying asset either. Under rent control the situation goes from being extremely advantageous to the landlord to just being regular advantageous.

sudosysgen 6y ago

You mean, exactly like people who have enough money to buy instead of rent as real estate values keep climbing? In Berlin, people that already have social relations and support structures are the one that get discounted rent, which is what we want! This is better than if wealthy people get to pay less for housing. It's not as if the alternative made it cheaper.

crote 6y ago

Exactly, it should be extended to all rental units. An important part of the regulation is that the landlord cannot raise the rent when a new tenant moves in - the rent is locked for the unit, not the tenant. This prevents situations like New York, where you are essentially unable to move.

ggreer 6y ago
> An important part of the regulation is that the landlord cannot raise the rent when a new tenant moves in - the rent is locked for the unit, not the tenant. This prevents situations like New York, where you are essentially unable to move. Mumbai did this and it was a disaster: https://marginalrevolution.com/marginalrevolution/2017/04/twisted-tale-rent-control-maximum-city.html https://marginalrevolution.com/marginalrevolution/2017/04/tw...
PeterisP 6y ago
The consequence of that, as claimed in the article, is that when the old tenant leaves, it often ceases to be a rental property - it's not offered for rent but put on sale for someone who'll live there as an owner. Already there are half as many spaces available for rent as it was a few years ago, and the number is still shrinking. If this goes on, most of the rental stock will get converted to non-rental and you'll be able to move only if you can get sufficient credit to buy the dwelling.