3 ms·
Financial incentives stop aligning because of two things: * Rent control means that tenants are paying less than market rate. * Extremely low property tax rat
by mapt 2y ago
Financial incentives stop aligning because of two things:
* Rent control means that tenants are paying less than market rate.
* Extremely low property tax rates combined with anti-development policy mean that asset price appreciation exceeds rents by a significant amount.
Stop controlling rents, tax the hell out of these people, and one way or another spend it on residents, and you are exacting a redistribution of wealth that doesn't distort the market in a way that leads to slumlords.
- pixelatedindex 2y agoYes, but without rent control landlords will charge as much as they want to charge. The price of what the market will bear just goes up because everyone will raise prices. Software like RealPage will become even more prevalent. It really only helps the landlord, who is already well off to begin with. Additionally, I can’t think of any homeowner who will vote to increase their property tax, especially if it’s already based on a $1M house.
- htss2013 2y agoLandlords require a certain multiple of rent in proven income. So the rent is automatically capped by local wages. It's pretty black and white - either the landlord asked a price in line with local wages or they didn't. If they go too far,the landlord gets punished with expensive vacancies, or they loosen rent/income requirements and get punished with even more expensive evictions. Point is, landlords aren't gangsters who can demand whatever number they pull out of their arses. They have to keep rent a reasonable ratio of local wages or they feel the pain.
- mapt 2y agoThey aren't individually gangsters. But collectively, it is equivalent to a form of extortion.