everyone except the lucky few who can get
rent controlled apartments
No, that's not the problem. As you say, rent control can't be both pervasive and rare at the same time. The real problems with rent control are:* It's hard to move. Say you change jobs and now work in a different part of the city, or your kids move out, or you'd like to move in with a partner. Normally one of the benefits of renting is that you can move, but with rent control that means switching to a place that's much more expensive. * Landlords benefit from having their long-time tenants leave. Without rent control landlords love long term tenants because they're reliable and they mean less work finding people for the apartment. Rent control reverses this, and the landlord loses the incentive to upgrade the apartment and otherwise keep the tenant happy. Yes, the landlord is being a jerk when they do it, but sometimes the best fix for widespread jerk-ness is changing the incentives. * It keeps out outsiders. People who want to live in your city enough that they're willing to give up their existing local connections and start over in your city are really valuable, and rent control means they pay a lot more than people who've lived in the city longer. * It depresses new construction. Yes, I know new buildings aren't subject to rent control, but in a place where everything is already built out you can't put up a new building without taking down an old one. Rent control means you either have legal restrictions saying you can't replace buildings, or you have protests against people doing this and displacing existing tenants. But in a growing city, without new construction housing is going to get more and more expensive. * Rent control puts off dealing with the problem of housing costs. If everyone in SF rented, and everyone had to pay market rates, then there would be the political backing for changes that would make housing more affordable. Rent control means that the long-time community members who would be best at this political change don't really feel much urgency because they have nice cheap places with rents set a decade or two ago. (But to be fair, homeownership is also a problem here, because rents and property values move together and homeowners want their property to become more valuable.) RE investors here, where a rent controlled 2br apartment
will set you back at least $3k a month in the city, are
doing quite alright. They don't seem too desperately in
need of expanded protections under the law.
Rent control hurts renters. I don't care about real estate investors. That $3k isn't why we need rent control, it's because we have rent control. |
Perhaps in a market where there is sufficient supply for demand, but in a market where demand is sufficiently high, many property owners don't do more than what is legally required and keep raising their rents.
You would not believe some of the dumps I've been shown by smiling realtors or owners that wanted thousands of dollars per month -- I'm talking about $2500+ a month for a two-bedroom apartment with boarded-over holes in Windows, holes in walls, a terrible smell and carpet that looks like it was last replaced decades ago.
Time after time, the pattern I've seen from experience in the Bay Area has been that owners will do whatever the market will bear -- in a market with severely constrained supply, the market is forced to bear quite a bit.