Posts Tagged ‘Rent Control’

The Economic Implications of Rent Control

Written by Landlord Property Management Magazine on . Posted in Blog

This article was originally published on the Resident Screening Blog.

Since the housing crisis, the demand for affordable rental housing has skyrocketed as Americans have shifted from a homeownership mentality to a renter mentality. As Richard Florida from CityLab might argue, the migration from suburban homeownership to renting has been increasing since 2006. In fact, from 2006 to 2014 the number of U.S. renter households did increase by 5%. With a large percentage of the renter population concentrated in or near urban areas, some of the most major cities in the U.S. lack the necessary housing supply to meet the demand.

Who? Me?

Written by Landlord Property Management Magazine on . Posted in Blog

by Jessica S. Weisman, Managing Partner of Client Education| Kimball, Tirey & St. John LLP

Many landlords often make the mistake of thinking that they do not need to worry about being up to date when it comes to fair housing law. “I’m an individual landlord” “I run a small operation” “I’m not a big fish” are common misconceptions. Regardless of property/company size, any landlord can find themselves on the wrong end of a fair housing claim and/or lawsuit.

Why Rent Controls Will Create Another Monster

Written by Landlord Property Management Magazine on . Posted in Blog

RentReport

Calls for rent controls to be enforced on Auckland’s heaving rental market to stop price gouging will only create another beast, says Auckland’s landlord association.

Auckland Property Investors Association is responding to this week’s news of a rental agency hiking its rents on vacant apartments by 5 per cent a week during a period when pressure from students surged to record levels.

APIA vice president Peter Lewis says despite people thinking rent control provides long-term security for tenants, and tilts the balance of power away from landlords towards the tenants, they also create a Pandora’s Box.

“People who advocate for controls think they make for a fairer market in which households with lower incomes cannot easily be pushed aside by landlords keen to upgrade their property to a higher specification with a commensurate rent increase,” says Mr Lewis.

“In our opinion, controls reduce the supply of lower-end property to the market because there is no money in creating affordable housing if landlords can never raise the rent to market rates.

“Slower supply growth then exacerbates the basic pricing problem. Those landlords who do rent out rent controlled properties tend to do minimal maintenance because, when supply and turnover in the market are limited by rent caps, landlords have little incentive to compete to attract tenants. Rent controls also mean that landlords may also become choosier, and tenants may stay in properties longer than makes sense as when they move to another rental property they may lose the benefit of the less-than-market rent that they have been paying.

“Once people move into a rent-controlled place, they are incentivised to never move out, because it is so cheap. A family may move into a large rent-controlled property. Over the years the kids grow up and leave, the husband dies. But the widow stays on alone in the property that is now far larger than what she needs, she stays on because it is cheap. In doing so she denies that property to another family that actually needs the space. Rent control doesn’t work. It doesn’t help the poor. It helps the middle class. There is some evidence that those living in rent-controlled flats in New York tend to have higher median incomes than those who rent market-rate apartments.”

Mr Lewis says that overseas experience shows stringent enforcement of rent control results in largely adverse outcomes such as undersupply, long waiting lists for tenancies, black market activity, little maintenance of rental properties, urban decay, and sometimes even eventual abandonment of such buildings.

Not convinced, take a look at the video below by Nicole Gelinas from the Manhattan Institute on why price ceilings on rent will only hurt renters. https://www.youtube.com/watch?time_continue=312&v=oJvTTGOHFkU

“In the local context, this proposal ignores the current law that restricts landlords to only charging a rent that is commensurate with other rents for a similar property within the area, and that tenants have the statutory right to appeal to Tenancy Services if they feel that their rents are unreasonably high.”

 

Lawmakers to Stall Evictions

Written by Landlord Property Management Magazine on . Posted in Blog

Senator& Mayor LeeCalifornia Senator Mark Leno joined San Francisco Mayor Ed Lee, other elected officials, tenant advocates, labor groups and business leaders to introduce legislation closing a loophole in the Ellis Act that allows speculators to buy rent-controlled buildings in San Francisco and immediately begin the process of evicting long-term renters.

Aiming to mitigate the negative impacts of a recent surge in Ellis Act evictions in San Francisco, Senate Bill 1439 authorizes San Francisco to prohibit new property owners from invoking the Ellis Act to evict tenants for five years after the acquisition of a property, ensures that landlords can only activate their Ellis Act rights once, and creates penalties for violations of these new provisions.

“The original spirit of California’s Ellis Act was to allow legitimate landlords a way out of the rental business, but in recent years, speculators have been buying up properties in San Francisco with no intention to become landlords but to instead use a loophole in the Ellis Act to evict long-time residents just to turn a profit,” said Senator Leno, D-San Francisco. “Many of these renters are seniors, disabled people and low-income families with deep roots in their communities and no other local affordable housing options available to them. Our bill gives San Francisco an opportunity to stop the bleeding and save the unique fabric of our City.”

Ellis Act evictions in San Francisco have tripled in the last year as more than 300 properties were taken off the rental market. This spike in evictions has occurred simultaneously with huge increases in San Francisco property values and housing prices. About 50 percent of the city’s 2013 evictions were initiated by owners who had held a property for less than one year, and the majority of those happened during the first six months of ownership.

“We have some of the best tenant protections in the country, but unchecked real estate speculation threatens too many of our residents,” said Mayor Lee. “These speculators are turning a quick profit at the expense of long time tenants and do nothing to add needed housing in our City.”

Enacted as state law in 1985, the Ellis Act allows owners to evict tenants and quickly turn buildings into Tenancy In Common (TIC) units for resale on the market. In San Francisco, the units that are being cleared are often rent controlled and home to seniors, disabled Californians and working class families. When these affordable rental units are removed from the market, they never return.

Senate Bill 1439 will be heard in Senate policy committees this spring.


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Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

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