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I was recently having the opposite discussion re residential real estate: where I live, there are artifical limits on how rent can be raised, even between tenan
by version_five 5y ago
I was recently having the opposite discussion re residential real estate: where I live, there are artifical limits on how rent can be raised, even between tenants. Whatever one's opinion of that policy, it limits the upside of a landlord, but they keep their exposure to the downside.
I'd be curious to know if there are any common restrictions on commercial real estate that limit the upside in the name of some public interest, same as rent control. If this is the case, there may be more of a case for limiting the downside too.
Overall, I do agree with you, and what seems to be the common sentiment here, that investments are risky and the risk should be borne by the investor. But it becomes less clear when the investor is made to pay for some other policies out of their upside.
- spoonjim 5y agoMy policy preference for both commercial and residential real estate is that all rental contracts must include a 1% ownership transfer per year. That way if you rent a place for 20 years you own 20 percent of it. Yes it will shrink supply on the margins and maybe there needs to be some carve outs but I’m sick of seeing restauranteurs etc make a neighborhood cool and then get kicked out with all the value having accrued to the landlord.
- aidenn0 5y agoDoes that mean that if you rent a place for 51 years, you have a controlling interest and can set your rent to zero?
- spoonjim 5y agoNo, when multiple people own an asset the controlling shareholder generally has to act in the interests of all shareholders. The way this might work is that the minority shareholders would be paid out on a property sale.