Rent Control Hurts Everyone
Dear AOA:
Peter Reitz, in his November 2012 article “Rent Control”, is quite right that rent control is an illegal taking of the landlord’s assets. Costs continue to rise, but the allowed rent doesn’t keep up with the costs. Suddenly the landlord is working for nothing. He may even be losing money and nobody cares as long as he continues to provide accommodation.
Nobody should waste much time or money trying to get liberal judges to stop ingratiating themselves with tenants by giving the landlord’s assets to them. Judges will always find a way to justify their position and continue rent control.
So what can be done? A few years ago theCalifornialegislature froze auto insurance premiums. Insurance carriers could no longer make a profit from selling auto insurance so within a year all major carriers had leftCalifornia. Auto insurance was no longer available at any price. Suddenly the state politicians were finding a way to let market forces control insurance premiums.
The lesson to be learned is that as long as landlords continue to rent to tenants in a rent controlled market, rent control will continue to be the law. But what if landlords refused to rent and tenants couldn’t find a place to live.
If landlords decided to allow 10% of their rent controlled units to remain vacant suddenly there would be a shortfall in available accommodation of about 1 million units. Many tenants would not be able to find accommodation at any price. Tenants would be irate and City council would bear the brunt of their anger. If City council understood the housing shortage was going to continue as long as rent control was in force, they would be happy to relent.
The City is desperately short of money and they are cutting jobs and services. Property assessments have fallen so tax bills fall and revenue decreases.
One of the forces driving down City revenue is rent control. Rent control holds rents and income from properties down. Property values are proportionally decreased. The assessment is less and the property taxes are less. The City sees a decline in revenue.
We should all be writing city council members to point out that when they support rent control, they are the causing their own financial crisis. They should be reminded that a vote for rent control is a vote to decrease City revenue and a vote to reduce City services for everyone. When they see that rent control controls their income too, they will find a way to change this unjust and harmful policy.
Home owners don’t realize that their property taxes are higher than they need to be, or City services are less than the could be, because apartment properties pay less property tax than they would if their rents floated in response to market forces. When home owners become aware that they are paying for rent control in their elevated tax bill they will demand that that the City eliminate this expensive and damaging policy.
Rent control is a very regressive social policy that hurts almost everyone it touches.
Yours sincerely, Darcy Bolton