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Rent control means base rent is set when the tenant moves in, not when the building is built. Its therefore reset with new tenants. It also doesn’t lock you int
by kjkjadksj 3y ago
Rent control means base rent is set when the tenant moves in, not when the building is built. Its therefore reset with new tenants. It also doesn’t lock you into this rate, but simply to a rate better pegged to wage growth. E.g. outside covid extreme measures rent control could mean rent can be raised 4-5% a year sometimes. Rent control really just prevents huge price gouging more than anything.
- seanmcdirmid 3y agoThey are limited to 60% of CPI growth, so over ten years that adds up to much cheaper rents than market. It still turns into a huge benefit that no one would want to give up, you have winners (who have rent control apartments) who don’t want to give them up to allow for more density.
- kjkjadksj 3y agoHow they are structured depends on municipality. Right now in SF its apparently set at 3.6%. Imo CPI is hardly relevant here, what is relevant is wage growth and typically thats always lagged behind. SF interestingly has stated going forward minimum wages will be based on some cpi calculation. Realistically if you applied rent control over the entire bay area any concerns regarding its ability to disadvantage building is moot at that point. The true limiting factor is probably a combination of zoning as well as onerous permitting and review processes. People in rent control units do get developed upon, they often readily accept buy out offers for example that are a rounding error for multimilliondollar apartment development projects. I believe redevelopment or renovation would count as just cause to evict but ianal.