Quote:
Originally Posted by ken0042
Actually I think you made a point in favour of rent control. Let me explain:
I bought my house in 2004 for 190K. Today its worth about 360K. So an increase of 90% over 2.5 years; or 36% per year. Why not put rent control of 36% in place? Obviously with the condition that you have the right to increase rent further with justification.
As a landlord, could you not live with 36% per year as the max? That way too- the people who are now complaining that their rent went up 100-200% will get some relief. The only people who would lose in this situation are the landlords who really are just gouging their tenants.
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That's not really an argument for rent controls, just an example of one way to do it that might be more acceptable, to landlords anyway. The people for rent controls would probably throw a fit
That makes the assumption that rents are somehow related to current market values, which it really isn't. I guess it might be in that if you purchase a new place at current market values you're going to set rents appropriately, but that doesn't always work either.
I have a specific situation myself even. I recently purchased a place where due to varying circumstances rents were VERY low, well below market value for the area. The owner had purchased long ago so was making money even at those rates. I however would be losing money hand over fist at that rate, and so I had to raise rents when I purchased it. In most of the cases, the increase was 40-50%. I only had two people move out, one person move out because they couldn't afford it and another because it made more sense for them to own at that price, the rest said "I knew it was coming, we've had such cheap rents for so long". They knew I was only going to market value.
That's the other part of rent control, it assumes the market is effecient (that rents are at market value, etc), but like my example it isn't, and rent controls don't take that into account. Unless there was a person involved to apply to to justify exceptional cases (like you say), but then you have to hire people to do it, etc.