Contact Your Legislator: Continue Rent Control Ban
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
https://realtorparty.realtoractioncenter.com/site/...
A bill is in committee to repeal the Rent Control Preemption Act. I invite all of my fellow investors to follow the link above and send a message to your local legislator that they vote NO. Up for hearing March 8th so act fast.
http://www.chicagonow.com/getting-real/2018/03/chi...
Rent control in chicago. Government price controls almost always end in shortages and decrease in availale housing according to almost all economists.
Share this with your government officials. Same thing is happening in Los Angeles, San Francisco, Sacramento, Houston, Seattle, Portland, Boston, New York City etc
http://www.gazettechicago.com/index/2018/04/voters...
There go our property rights https://www.jacobinmag.com/2018/04/chicago-housing...
Good call. I heard about this but hadn't thought to call our state rep. Rent control in my neighborhood would absolutely kill me.
Thank you for posting this @Matthew Olszak
The bill is scheduled for a March 15 hearing in the committee, now with 5 co-sponsors. If you haven't already, click the link above to contact your legislator and tell them NO. If you have time, try to contact at least 1 of the following bill co-sponsors and tell them you DON'T agree:
And click the links below to contact each of the "Real & Personal Property Subcommittee" members:
The bill is scheduled for a March 15 hearing in the committee, now with 5 co-sponsors. If you haven't already, click the link above to contact your legislator and tell them NO. If you have time, try to contact at least 1 of the following bill co-sponsors and tell them you DON'T agree:
Matthew you are absolutely correct I hope it's went well up there in Illinois.
http://www.economist.com/blogs/economist-explains/...
Rent control ruins local economies, creates slum cities, ruins housing for tenants and landlords, ruins home owners value. It's bad for any community
@Susan O. Thanks for bumping this thread. I was just looking at the bill's status last night. Since the bill didn't get sent to a vote in time, its been re-referred to the original committee, hopefully to die. But...it could get re-referred to the sub-committee again and then get sent up the line for a vote.We can't let up!
2 other co-sponsors have been added, Rep. Silvana Tabares and Rep. Carol Ammons. Let's make sure they know our position on this bill. As long as my rental income is taxed, you can bet I'll make noise about preventing these rent controls that are inevitable in Chicago should the ban be lifted.
@Lucas Hammer @Jerry N. @Erica Rodriguez Thank you for the support! Keep on pressing the legislators to kill this effort.
Unfortunately, this bill may again be returning. I've seen multiple tenant advocacy groups scheduling events recently to discuss the rent control topic to try to build momentum.
More unfortunately, despite the bill having no activity since March, Representative Theresa Mah of the 2nd district which includes all/some of Pilsen, Bridgeport, McKinley Park, Brighton Park, Back of the Yards, Chinatown, and University Village, has signed on as a co-sponsor on 08/28/2017. YOUR VOICE NEEDS TO CONTINUE TO BE HEARD! Especially if you live in this district.
Rep. Mah's campaign contact info can be found here: http://www.theresamah.com/contact_us and office contact here: http://www.ilga.gov/house/rep.asp?GA=100&MemberID=2492 . Show her that we as investors and landlords are a strong voice, large in number, and despite all of her other positive work in our communities, this will be a deal-breaker come election time if she and the others continue to support these efforts at repealing the rent control prohibition. A quick call, email, or letter is all it takes to protect your business.
I'm a block west of her district, but I'm going to be damn sure to let her know how I feel about it.
FYI
This is not at all politically motivated - it is financially motivated. For everyone in Illinois, some of the gubernatorial candidates have rent control as part of their platform. We live/own in Chicago and it is a topic of many of the local representative races too.
Contact Jane Garvey at the Chicago Creative Investors Association.
http://www.chicagonow.com/getting-real/2018/03/chi...
Rent control in chicago. Government price controls almost always end in shortages and decrease in availale housing according to almost all economists.
Share this with your government officials. Same thing is happening in Los Angeles, San Francisco, Sacramento, Houston, Seattle, Portland, Boston, New York City etc
http://www.gazettechicago.com/index/2018/04/voters...
There go our property rights https://www.jacobinmag.com/2018/04/chicago-housing...
Assumption - I'm viewing each market as a whole - not taking into account specific neighborhood dynamics.
My brief observation:
In Los Angeles, the impacts of investing in rent-controlled areas are offset by consistent, appreciation % YOY (since 2012) - median home sales prices have increased by 64% from $393K in Sept 2012 to $644K in Sept 2017. It is not uncommon to see buy-and-hold investors take on negative/break-even cashflow properties, while relying solely on appreciation. The fix and flip market (especially for high-end, luxury properties) is so hot because wider margins exist.
In contrast, Chicago has seen median home sales prices increase 32% from $167K to $221K during that same time period. Cashflow is still possible in certain neighborhoods, but the projected appreciation is no where close to LA.
Unless Chicago experiences similar appreciation as LA, which I don't see based on pre-recession vs. post-recession median home sales price numbers, the implementation of a Rent Stabilization Ordinance will discourage investment from buy-and-hold investors, who will start to see a squeeze on cashflow (restricted rents w/rising property taxes) supplemented by sub-par appreciation gains. I see this having downstream impacts on the fix and flip market as well. This combination makes the Chicago market much less appealing.
Garcetti really is begging for votes
http://abc7.com/politics/garcetti-backs-statewide-...
He doesn't care if it hurts the economy and stability of neighborhoods. Rent controls ruin neighborhoods by setting prie caps and lowering the investing in communities
@Lucas Hammer @Jerry N. @Erica Rodriguez @Susan O. @George Skidis @Nathan Yee @Frank S. - PLEASE PLEASE PLEASE tag at least 1 connection in Illinois.
So HB2430 died out in committee. BUT - they've one-upped it w/ SB3512: http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=91&GA=100&DocTypeId=SB&DocNum=3512&GAID=14&LegID=111613&SpecSess=&Session=
Seriously, every real estate investor in Illinois and their family and friends needs to speak out against this bill. SB3512 would repeal the rent control prohibition and establish Rent Control Boards in EVERY county in Illinois (102 total) w/ 10 members EACH. So beyond the obvious impact on us landlords by limiting our income while not restricting our expense growth like property taxes and utilities, we'd be paying for 1020 new committee members. @ $60k/yr salary each (not including any benefits), the straight labor cost would be more than $600MM over 10 years, again, ignoring benefits and overhead costs. Imagine the # of people that could become homeowners and better their community with that $$$ instead of paying it to connected salaries and relegating folks to becoming lifelong renters.
To put things in perspective - in the past 12 months, just under $5MM of SFHs were sold in North Lawndale. Literally, the gov't could gift every SFH sale in North Lawndale to someone for the next 120 YEARS for just the labor cost of 10 years of these committees. Oh, and the gov't will somehow pay that extra cost w/ less tax income, as the total collected from commercial properties via real estate taxes will be reduced since these properties are valued based on income (which will be reduced by way of rent control). Where will the extra $ come from? It will come by way of tax increases for EVERYONE - including SFH owner-occupants. Where else would the $$ come from?
So what can you do?? First - get everyone you know involved. Next, file a Record of Appearance in OPPOSITION to this bill at: http://my.ilga.gov/Hearing/HearingDetail/16324?SCo...
AND If you really want to make a difference - file an oral appearance and speak at the senate hearing on Sept. 27th downtown (I'll be doing so). Let our legislators know we all aren't multimillionaire REI corps. We're mom's and dad's trying to invest to pay for our kid's college. We're long term owners who were counting on our rents as a small part of our retirement. We're established community members looking to improve the status-quo. Come out and let your legislators know YOU individually are their constituents and the ones who's vote they depend on, and absolutely do not support this bill or anything related.
@Matthew Olszak thanks for taking the time to put this post together. I went ahead and opposed this. I can't think of anything that would be more disastrous for our state right now.
Your efforts are much appreciated. I will be in attendance.
Filing a Opposition Appearance Witness Slip is very simple, it takes less than a minute. Please, go ahead and do it.
http://my.ilga.gov/Hearing/HearingDetail/16324
Frank
@Matthew Olszak Thanks for bringing this to our attention. I'm going to try to make it down there for the meeting, but I don't know if I can get the morning off work yet.
This has to be the single worst bill I've seen this state attempt (and that's saying something). I'm not sure what the median is for Cook County, but forcing me to raise rent less than either 2% or 5% in a neighborhood like Little Village that has low enough rents as it is would be disastrous. Also, renting to someone over 60% of the median income and not being allowed to raise rent for 3 years while the county keeps upping my taxes would take me out of the rental game in Chicago and force me to look for greener pastures. I'll be opposing it either way, but hopefully can make it down to voice my opposition in person.
@Matthew Olszak Thank you for calling attention to this legislation. The RLTO already puts landlords at a disadvantage, adding this to the mix would be disastrous for the commercial market in Chicago.
The "Illinois Rental Property Owners Association" (of which Illinois REIA is a member) has been working on this for some time. We are an association of associations. Everyone should join. They even have a lobbyist. PM me for m ore details.
Asinine bill.
1. Massively increase headline rents for units ahead of bill becoming law. Insist that tenants pay by check. Rebate part of that rent down to a reasonable amount -- rebate paid by check -- to your good tenants. That means your headline rental, on which increases will be based, will be high enough for your numbers to work.
2. Can't increase rent for unregulated tenants for three years if "previously" rented by a tier 1-2 tenant? How is that going to work? Can I rent to an unregulated tenant for a year, and then raise rent after that year when the new tenant leaves, because it was rented "previously" to an unregulated tenant and therefore the three year proviso doesn't apply?
3. Never rent to an unregulated tenant who is near retirement. Never rent to an unregulated couple who might divorce. Never rent to a young unregulated couple who might want to start a family. Why? Because their incomes will fall and they might then become tier 1 or 2 tenants and you'll have rent control imposed on you.
4. If I have .75 median income and I move my girlfriend (also .75 median income) in, are we now a 1.5 median income unregulated tenancy?
State Senator Mattie Hunter introduced this bill. I looked at her biography. She is obviously intelligent, by no means stupid. She is, however, ignorant of economics, as proven by this bill.
@John Clark There is no logic or sense to it, just pure emotions by caving to the tenant advocacy groups.
One note on your "increase rents" suggestion. Better act fast if your rental is in Chicago as Ald. Moreno is trying to get support for an ordinance that will create required notice periods as high as 120 days (which is contrary to the CRLTO that we cannot require a tenant to renew sooner than 90 days prior to lease end, but don't let that get in the way) for rent increases above 15%. Might sound like a high % but its only 800 vs 920. And if you don't give proper notice of the rent increase, the tenant can stay for up to 120 days past their lease and continue to pay the same rate as it was originally.
@Matthew Olszak Thanks for bringing this to our attention. I'm going to try to make it down there for the meeting, but I don't know if I can get the morning off work yet.
This has to be the single worst bill I've seen this state attempt (and that's saying something). I'm not sure what the median is for Cook County, but forcing me to raise rent less than either 2% or 5% in a neighborhood like Little Village that has low enough rents as it is would be disastrous. Also, renting to someone over 60% of the median income and not being allowed to raise rent for 3 years while the county keeps upping my taxes would take me out of the rental game in Chicago and force me to look for greener pastures. I'll be opposing it either way, but hopefully can make it down to voice my opposition in person.
See here for the median income limits: https://www.cityofchicago.org/city/en/depts/dcd/su...
Tier 2 for a family of 4 (mom, dad, 2 kids) is $101k. Now lets reverse it out. 101k/12 = $8416 income per month. Stringent rental standards call for 3x income, so 8416/3 = $2,805 rent/month qualification. Is that really the face of a tenant they want to use as the "struggling, work-only-for-rent-money" tenant that the proponents want to paint? I mean wow, if you make 101k/yr and and renting in Chicago by "necessity" and not choice, call me so I can turn you into a homeowner in the next 30 days.
This bill puts so many people into the rent-controlled category that essentially the market rate will shift downward even for non-rent controlled tenants. Hopefully you can make it out to speak about your experience or at least watch and support!
Thanks for the numbers regarding a family of four.
Even New York City ceases rent control on apartments renting for something just over $2,700 a month (less than $2,800 a month).
This bill is not aimed at rent control. It is aimed at stopping and freezing gentrification in its tracks. Gentrification needs cheap rents that can be swiftly raised. With rent control designed like this, gentrification never takes place.
There was a good article in the Economist a few months ago about gentrification. Someone should find it and give it to Senator Hunter. Her bill will suck out any dynamism Chicago has and make it much less vibrant than it could be. Far better to have expanded, targeted, subsidies for tenants. A local Section 8 if you will. Guaranteed it won't subsidize $101k a year families in $2.8K/mo. rentals.