A worth-while read and/or listen. Several of the points about the unintended consequences (e.g. incentivizing people to stay put even when they no longer need as much house) were new to me.

freakonomics.com/podcast/rent-control/

The comments were an interesting read. Some of them really resonated. I liked one in particular--

"The real solution is to encourage these companies to spread out. We need major companies to build satellite offices in smaller cities. We have tons of space in the US, we just aren't using it. In an era where tools to work remotely with others are so incredible and the ability to jump on a plane and be anywhere in the world in a few hours. We just need to spread out."

As well as--

"I found this discussion incredibly bizarre because there was no discussion of supply. The laws and rules regarding zoning, construction, land availability And the like with all seem to be incredibly important to consider when discussing rent control. Rent control might look very different in San Francisco if you could actually build apartments in San Francisco! What of ending rent control in Cambridge occurred concomitant with more lower rent apartments coming onto the market and then phasing out rent control?"

Obviously, places like Boston or San Francisco differ from Houston/Atlanta, in that one of them is 50 miles inland/250 miles inland, and the other ones are right on the coast---!

But for anyone who's ever looked at a zoning map of their town to see where anything bigger than a duplex is allowed/not allowed, or looked at their code of ordinances restricting rooming houses/unrelated individuals/parking/etc--- a lot of these problems have been brought onto communities by themselves.

I've owned apartment buildings in Rent-Controlled Los Angeles, West Hollywood and Santa Monica. Each City plays their games stealing from the landlord and to redistribute their hard earned wealth to the tenants in the form of restricted control over their properties.

CA also has analogous form of rent control for homeowners, in the form of Proposition 13. Just like rent control caps rent increases for existing tenants but rent is uncapped for a new tenant, Prop 13 caps increases of property taxes for the current owner. When a sale occurs, the property tax is uncapped and based on the sale price.

It is movement and change which keeps the economy rolling.

Moving to a new home? Rent a truck, buy fuel, buy stuff for it.

Seasons changed? Buy stuff for the new season.

Tired of your old car? Buy a new one.

BRAD

every landlord in CA needs to raise their rents NOW to avoid the compounding loss of every dollar not taken in 2019 since we will not be able to raise higher than about 8% annually in the future - no matter what our costs are .... letter to my tenants rent increase notices today :

RE: Rent Increase’s / 2019 Annual

The state is pending approval of RENT CONTROL legislation that will limit the annual rent increase in a year’s period to a flat 5% and a CPI rate. The past few years this would be about 8% total. Oregon passed a law at 7% and CPI – and the operating costs for rentals in that state is much lower!

Rents must be reasonably adjusted to insure the revenue is coming in to pay the ever-increasing costs and bills. Rents not rising to the maximum allowed annually, will result in lost revenue compounding over the years. In five years that revenue lost is 25% + for every dollar of rent not charged in 2019. This is because the effect of NOT raising the rent compounds every lost dollar annually.

Unfairly, this law does not apply to those properties built in the past 15 years. Most of these were built by large corporations and will continue to raise their rents as they wish, while the older properties that are mostly owned by families and are more lenient with applicants will require steadfast attention to aging infrastructure and be sure maintenance will not suffer.

While it may seem like rent is high, remember that every landlord has to pay a lot more expenses than most people think. The costs to operate the property have risen by more than 8% annually since 2015. Not having the flexibility to raise rents in the future, as needed to cover the operating costs covered, is problematic. Insurance costs, property taxes, PG&E costs, licenses and fees to operate, maintenance and repairs, gasoline tax, bookkeeping & accounting costs, legal fees, tenant turnover and vacancy days, and increased state and federal taxes on any income left over.

Additionally, there are “regulation related expenses” transforming annually in this state, that require unfaltering compliance and likely at significant cost.

In the past, I have “shared” the annual rent increase with longer term / lower rent rate families in an effort to keep their rent increase smaller. With the potential passage of the statewide California rent controls law, not raising the rents as allowed and the compounding effect of even minimal revenues lost over the years, I have no choice but to invoke another rent increase the 2019 year for those families whose rent was held below 8% increase in Spring. This additional increase will raise your rent rate to not more than 7% higher than you paid in December 2018.

If rent control does NOT pass and become law, this increase will NOT go into effect, and the notice attached will be rescinded.