8 ms·

I don't know how it is in Germany, but in the US, rent controlled buildings can only have the rent increased if the landlord upgrades the building, so it actual

I don't know how it is in Germany, but in the US, rent controlled buildings can only have the rent increased if the landlord upgrades the building, so it actually incentivizes them to do upgrades, as that's the only way they can increase rent.

Kalium 6y ago
In the US, rent control is regulated by states and enacted by cities. Each state and city is free to do so differently. As such, it can and does vary quite significantly place to place. This means it's impossible to offer an informed comment about rent control in the US.
- lotsofpulp 6y ago
  I don’t think any US state has laws about rent prices. It’s all up to unit cities.
  - Kalium 6y ago
    Some states (California and Oregon come to mind) place limits about the terms of rent control that may be imposed by cities.
    - lotsofpulp 6y ago
      Interesting, I had never heard of that. I've always only seen specific city's rent control policies. Edit: Wow, OR and CA recently capped rental price increases statewide: https://www.oregonlive.com/business/2019/03/how-does-oregons-first-in-the-nation-rent-control-law-work-a-quick-guide.html https://www.oregonlive.com/business/2019/03/how-does-oregons... https://www.nolo.com/legal-encyclopedia/statewide-rent-control-has-arrived-california-s-tenant-protection-act-of-2019.html https://www.nolo.com/legal-encyclopedia/statewide-rent-contr... Meanwhile WA prohibits rent controls by any local government: https://apps.leg.wa.gov/rcw/default.aspx?cite=35.21.830 https://apps.leg.wa.gov/rcw/default.aspx?cite=35.21.830
edbob 6y ago
That adds even more upward pressure on housing prices. That's pretty much the last thing my generation needs.
bdowling 6y ago
In California the way this works is that a landlord takes a rental property off the market for 5 years, kicking out all of the existing tenants and leaving the property vacant, then remodels the building and rents the new luxury units to new tenants at market rate. The process is called "Ellissing", after the Ellis Act that allows it. When a property is full of rent-controlled tenants paying far below market rate, it has a low value to most real estate investors. With the Ellis Act, however, the value of the property can actually go up as rents go out of sync with the market because it becomes an attractive investment to investors who would Ellis it.
- rsj_hn 6y ago
  The Ellis act allows you to convert the unit to a live in residence, and it can no longer be used as a rental. Thus it is not attractive to investors who are developing rental stock, it is attracted to investors who are developing homes for owner-occupants.
  - refurb 6y ago
    Ellis Act allows you to remove the unit(s) from the rental market and remove the tenants. In an apartment building you may do this before condo conversation but cities like SF have almost stopped condo conversions. If you Ellis Act you can re-rent the units are market rate but only after 5 years (or else you have to rent it back to the original tenants at their old rate or new tenants at the old rate).
    - rsj_hn 6y ago
      <strike>Ellis act</strike> Owner movein is for moving yourself or a relative into the unit so you can live in it. Condo conversion is separate from Ellis act and Owner* Move in, it has to do with splitting off units to sell them independently, for example turning a TIC into a condo. Units that have been Ellised* or Owner Occupied* find it much more difficult to do a condo conversion, as there are laws about how long you need to wait and where you go in the lottery that determines if you get to condo or not. That lottery is itself a complex affair that involves giving more tickets to houses that failed in the past, and for all I know now, giving extra tickets based on victimhood points or something. Although right now I am hazy about the laws. SF housing laws are a labyrinth of absurdity, micromanagement, and graft. They are not even funny. *updated for correction
rsj_hn 6y ago
It does not, in fact incentivize upgrades. Because the landlords wait until the tenant moves out, then they can raise the rent to the (high) market rate and that is when they make improvements. Rent control is widely acknowledged to lead to a lower quality housing stock as maintenance and upgrades are deferred. The provision for some capital offset for improvements is not, in practice, sufficient justification for making the improvements as the offset is only partial, and you want to encourage the long term tenant to move out so you are not going to provide upgrades to the unit.
kelnos 6y ago
There is no "in the US" here; regulations vary by state and city. For example, in San Francisco, landlords can usually pass on some portion of the cost of capital improvements on to their tenants, but not all of it, and only until that portion is paid off, after which the rent reverts to the previous amount. So yes, the landlord gets the improvement done at something of a discount, but still has to shell out cash, and for not much benefit since the rent will still revert to the previous level. So there's not much incentive to do it until after the tenant moves out, if at all.
perl4ever 6y ago
In the US, (e.g. NYC) landlords do very nasty things to get their rent controlled tenants to move out so they can raise rent to market rate. And then, if the tenants sue because of course that is illegal, then the public court records can be and are used by all the landlords in town to avoid renting to them, who would dare to exercise their rights. I happen to know this, not because I've ever lived there or had firsthand experience or anything, but I once happened to see a court document on the internet, in which the judge considered an emergency request from a plaintiff to not release information about their lawsuit at an early stage, because it would prevent them from having anywhere to live. In other words, this corrupt system is well known enough that the housing courts acknowledge it as a matter of course.

Kalium 6y ago

In the US, rent control is regulated by states and enacted by cities. Each state and city is free to do so differently. As such, it can and does vary quite significantly place to place. This means it's impossible to offer an informed comment about rent control in the US.

lotsofpulp 6y ago
I don’t think any US state has laws about rent prices. It’s all up to unit cities.
- Kalium 6y ago
  Some states (California and Oregon come to mind) place limits about the terms of rent control that may be imposed by cities.
  - lotsofpulp 6y ago
    Interesting, I had never heard of that. I've always only seen specific city's rent control policies. Edit: Wow, OR and CA recently capped rental price increases statewide: https://www.oregonlive.com/business/2019/03/how-does-oregons-first-in-the-nation-rent-control-law-work-a-quick-guide.html https://www.oregonlive.com/business/2019/03/how-does-oregons... https://www.nolo.com/legal-encyclopedia/statewide-rent-control-has-arrived-california-s-tenant-protection-act-of-2019.html https://www.nolo.com/legal-encyclopedia/statewide-rent-contr... Meanwhile WA prohibits rent controls by any local government: https://apps.leg.wa.gov/rcw/default.aspx?cite=35.21.830 https://apps.leg.wa.gov/rcw/default.aspx?cite=35.21.830

edbob 6y ago

That adds even more upward pressure on housing prices. That's pretty much the last thing my generation needs.

bdowling 6y ago

In California the way this works is that a landlord takes a rental property off the market for 5 years, kicking out all of the existing tenants and leaving the property vacant, then remodels the building and rents the new luxury units to new tenants at market rate. The process is called "Ellissing", after the Ellis Act that allows it. When a property is full of rent-controlled tenants paying far below market rate, it has a low value to most real estate investors. With the Ellis Act, however, the value of the property can actually go up as rents go out of sync with the market because it becomes an attractive investment to investors who would Ellis it.

rsj_hn 6y ago
The Ellis act allows you to convert the unit to a live in residence, and it can no longer be used as a rental. Thus it is not attractive to investors who are developing rental stock, it is attracted to investors who are developing homes for owner-occupants.
- refurb 6y ago
  Ellis Act allows you to remove the unit(s) from the rental market and remove the tenants. In an apartment building you may do this before condo conversation but cities like SF have almost stopped condo conversions. If you Ellis Act you can re-rent the units are market rate but only after 5 years (or else you have to rent it back to the original tenants at their old rate or new tenants at the old rate).
  - rsj_hn 6y ago
    <strike>Ellis act</strike> Owner movein is for moving yourself or a relative into the unit so you can live in it. Condo conversion is separate from Ellis act and Owner* Move in, it has to do with splitting off units to sell them independently, for example turning a TIC into a condo. Units that have been Ellised* or Owner Occupied* find it much more difficult to do a condo conversion, as there are laws about how long you need to wait and where you go in the lottery that determines if you get to condo or not. That lottery is itself a complex affair that involves giving more tickets to houses that failed in the past, and for all I know now, giving extra tickets based on victimhood points or something. Although right now I am hazy about the laws. SF housing laws are a labyrinth of absurdity, micromanagement, and graft. They are not even funny. *updated for correction

rsj_hn 6y ago

It does not, in fact incentivize upgrades. Because the landlords wait until the tenant moves out, then they can raise the rent to the (high) market rate and that is when they make improvements. Rent control is widely acknowledged to lead to a lower quality housing stock as maintenance and upgrades are deferred. The provision for some capital offset for improvements is not, in practice, sufficient justification for making the improvements as the offset is only partial, and you want to encourage the long term tenant to move out so you are not going to provide upgrades to the unit.

kelnos 6y ago

There is no "in the US" here; regulations vary by state and city. For example, in San Francisco, landlords can usually pass on some portion of the cost of capital improvements on to their tenants, but not all of it, and only until that portion is paid off, after which the rent reverts to the previous amount. So yes, the landlord gets the improvement done at something of a discount, but still has to shell out cash, and for not much benefit since the rent will still revert to the previous level. So there's not much incentive to do it until after the tenant moves out, if at all.

perl4ever 6y ago

In the US, (e.g. NYC) landlords do very nasty things to get their rent controlled tenants to move out so they can raise rent to market rate. And then, if the tenants sue because of course that is illegal, then the public court records can be and are used by all the landlords in town to avoid renting to them, who would dare to exercise their rights. I happen to know this, not because I've ever lived there or had firsthand experience or anything, but I once happened to see a court document on the internet, in which the judge considered an emergency request from a plaintiff to not release information about their lawsuit at an early stage, because it would prevent them from having anywhere to live. In other words, this corrupt system is well known enough that the housing courts acknowledge it as a matter of course.