Rent Controls - Statewide - These people are insane

15 Replies

There goes the neigborhood:  Oregon Defies Logic With Statewide Rent Control

It is often said by cynical economists and political commentators, usually of the right or libertarian persuasion, that the road to hell is paved with good intentions. There is no more odious and damaging economic policy that comes from the heart than rent control. For years, limiting the cost of living spaces was done at the local level, but one West Coast state aims to be the first to implement statewide rent controls.

Rent Control Hurts the Poor

First, it is important to examine the justification for rent controls. Advocates contend that it is immoral for someone who has lived in a neighborhood his entire life to be suddenly priced out of it. It is also wrong, they assert, that landlords are just sitting on their rear ends, enjoying higher rents, because there is a greater demand to reside in New York, San Francisco, or Boston than in Jerome, AZ, or Bonanza, CO.

Proponents will ignore the unintended consequences of rent control. New properties are not erected, vacancy rates plunge, existing landlords exit the market, and the small supply of housing diminishes. Landlords will try to evade regulations by transforming their units into condominiums, luxury apartments, furnished suites, or offices.

https://www.zerohedge.com/news/2019-02-05/oregon-d...

Whether a state (or locality) should or should not enact rent control is a different question than "Will rent control work?" It's a philosophical question that encompasses the political system and values of the citizens involved.

"Will rent control work?" is an easier question to answer. Usually the answer is "No", because it's a math equation. You cannot influence one side of the equation without influencing the other side. Think about agricultural price controls (another philosophical question). It works because both sides of the equation are affected. Farmers are guaranteed a floor price on crops, and programs exist to address crop disasters and other situations. Price controls for agriculture allow farmers to experiment with increasing yield (i.e., building more apartments), because if yield increases too heavily and prices collapse there's a backstop. Note I didn't say we should or should not have price controls here.

In any case, you are right in that the controls typically don't work, but they don't work because no one wants to spend any money on the other side of the equation to balance it; thus, the market is forced to balance itself, and that typically shows up as you said - no vacancies, no turnover, degradation of existing stock, etc. 

It will be interesting to see how many people start moving out of Oregon based on higher costs of housing caused by rent control versus moving out of OR based on the declining interest of investors in the state. I can imagine the practice of rent control migrating to Washington which is a like minded state. The difference in WA is that there are much higher paying jobs and more tolerance for government intrusion into all aspects of life.

Rent controls are driven by "poverty pimps". Those that make a living from dealing with or representing the poor, tenant organisations and other interest groupes have engaged powerful lobby groups that target air head socialist politicians to control government decisions. If you have rent controls you have poverty pimps making money of the backs of the poor.

Rent Control is an extreme policy that impedes upon the rights of private property owners. 

I grew up in Oregon. It's a beautiful state with a lot of good people that has slowly been ruined by a few major population centers, just like every other crap state.

I am no fan of "real" rent control: CPI locked with no market price on vacancy, but what I read does not sound like the end of the world. 7% + CPI rent raises allowable, with vacancy decontrol. I've never exceeded this envelope with free market units in a gentrifying area. I have a hard time seeing the conditions requiring more than a 8 or 9% rent hike per year on a tenant.

Hard to feel bad because They do it to themselves . Folks You have the power everytime you vote . Sadly People are so dumb that they will vote to slit their own throat in the name of fairness and equality then complain why their taxes went up and insane overbearing regulations come to their town .

Maybe I can make you feel better.

NYC ALONE has over 1 Million Rent Controlled/Stabilized apts.

The population of Oregon is 4.1 Million. So we have 1 apt that is rent controlled for every 4 residents in Oregon!

YET.... I've made millions.

What matters isn't necessarily the politics..... it is how flexible your strategy is to change when the politics changes as well.

I like to tell Investment Students, you are buying an Investment Vehicle. You must steer it away from danger.

Either steer it away, or build it so that it can withstand the hurricane that's coming.

Originally posted by @Johann Jells :

I am no fan of "real" rent control: CPI locked with no market price on vacancy, but what I read does not sound like the end of the world. 7% + CPI rent raises allowable, with vacancy decontrol. I've never exceeded this envelope with free market units in a gentrifying area. I have a hard time seeing the conditions requiring more than a 8 or 9% rent hike per year on a tenant.

 Sorry, but this is an election year and due to rising rents we're going to have to suspend all rent increases for the next 12 months. No 7% + CPI for you greedy bastards. 

Did we say 7%? Sorry, that is way too much of an increase. We meant 2%. We'll be amending that shortly.

Rent increases on the poor? Hell no! You may now only increase rent on people who have annual incomes of 2X the median. 

And the changes to this law will keep rolling in...

Originally posted by @Greg M. :
Originally posted by @Johann Jells:

I am no fan of "real" rent control: CPI locked with no market price on vacancy, but what I read does not sound like the end of the world. 7% + CPI rent raises allowable, with vacancy decontrol. I've never exceeded this envelope with free market units in a gentrifying area. I have a hard time seeing the conditions requiring more than a 8 or 9% rent hike per year on a tenant.

 Sorry, but this is an election year and due to rising rents we're going to have to suspend all rent increases for the next 12 months. No 7% + CPI for you greedy bastards. 

Did we say 7%? Sorry, that is way too much of an increase. We meant 2%. We'll be amending that shortly.

Rent increases on the poor? Hell no! You may now only increase rent on people who have annual incomes of 2X the median. 

And the changes to this law will keep rolling in...

Sorry, that "slippery slope, any regulation will lead to complete regulation" seems a bit tired from over use in the 2nd Amendment arguments.  NJ has a serious "anti-eviction" statute that requires leases be renewed, but its been like that for decades with no draconian incremental changes like you would fear. Most cities do not tinker much. In NYC and Jersey City nothing under 5 units is regulated, has been that way for many decades, and you'd think that would be a prime target for tinkering. Most of the tinkering in NYC over the past 20 years has been to make it easier to deregulate units!

Originally posted by @Johann Jells :
Originally posted by @Greg M.:
Originally posted by @Johann Jells:

I am no fan of "real" rent control: CPI locked with no market price on vacancy, but what I read does not sound like the end of the world. 7% + CPI rent raises allowable, with vacancy decontrol. I've never exceeded this envelope with free market units in a gentrifying area. I have a hard time seeing the conditions requiring more than a 8 or 9% rent hike per year on a tenant.

 Sorry, but this is an election year and due to rising rents we're going to have to suspend all rent increases for the next 12 months. No 7% + CPI for you greedy bastards. 

Did we say 7%? Sorry, that is way too much of an increase. We meant 2%. We'll be amending that shortly.

Rent increases on the poor? Hell no! You may now only increase rent on people who have annual incomes of 2X the median. 

And the changes to this law will keep rolling in...

Sorry, that "slippery slope, any regulation will lead to complete regulation" seems a bit tired from over use in the 2nd Amendment arguments.  NJ has a serious "anti-eviction" statute that requires leases be renewed, but its been like that for decades with no draconian incremental changes like you would fear. Most cities do not tinker much. In NYC and Jersey City nothing under 5 units is regulated, has been that way for many decades, and you'd think that would be a prime target for tinkering. Most of the tinkering in NYC over the past 20 years has been to make it easier to deregulate units!

I won't speak for the east coast, but living in California I can say that without a doubt the slope is extremely slippery. All sorts of temporary measures are enacted, but don't worry it is temporary. Then when they are about to expire, we need to extend them since the world didn't end. A temp tax increase, but it is only for one year. Year's up, so let's keep the tax since people are used to it. Sorry, but our slopes out here are extremely slippery, being consistently re-greased by the blood, sweat, and tears of of the alleged rich.

@Dennis M.

And then they move to Florida, after they messed up their own state. Then start voting for socialists, so they can mess up that state too. A socialist almost won the Governor's Mansion. One of my favorite places on earth and it will be destroyed by the same mentality. 

Originally posted by @Kristopher Hanks :

@Dennis M.

And then they move to Florida, after they messed up their own state. Then start voting for socialists, so they can mess up that state too. A socialist almost won the Governor's Mansion. One of my favorite places on earth and it will be destroyed by the same mentality. 

Yep better Hang on to your hat because they are running for the most important job in the land as well . the good news is most people can see through the insanity .i would be inclined to believe a free people would want less regulations and control in our lives but sometimes it doesn’t seem that way 

We have not seen anything yet! Please do yourself a favor and DO NOT READ "The Coddling of the American Mind" What we have coming in our future is very concerning. Very little balance from the newly minted academia. If you love a challenge (you invest in real estate), this will be a great one. I have read the suggested (noosely, I mean loosely) rent control items- we have never done any of these to our tenants. How about if you want to follow the State mandated rent control- that they do not raise your property taxes? I guess if they make it harder- there will be less competition. Sorry for the downer- I still live in America and it amazes me how many opportunities are still open to every. I am grateful for what is here and hope to make it better. I am going to get back to work and find my next project! (High end tiny home Resort/RV park STR- from a converted/preserved golf course in wine country)