Would like to buy, but many properties are over priced, interest rates aren’t favorable, and don’t have the money for the required down payment, so stuck renting, and landlords/leasing agents are taking advantage. We need rent control.
Duluth, Minnesota, tried to do some control for absent landlords, requiring that landlords live within or have a representative within X miles of the rental. Unfortunately, all that did was make management companies more overbearing when owners turned to them to be the local contact.
Unfortunately, rent control does have issues in the long run. Less profit for landlords does mean less money invested in new construction by people looking to make a profit. Less new construction eventually leads to shortages. It’s great for those who already have housing, but those searching for a place to live have it more difficult under strict rent control. Though with how long construction projects take from planning to opening, this effect takes decades for any change to be noticeable.
Hypothetically, could a city or other regional government, or even larger scale one, create a state run development company, under mandate to build up the housing supply in a given area even if investors won’t do it?
Yes, but without money from investors they’d have to cover the construction costs from taxes, so it’s not free either.
And government run initiatives have to be very careful with how they set their goals. If the legal mandate is to maximize the number of apartments constructed, and the people in charge are rewarded based on the number of apartments they created on paper, then the result will likely be the bare minimum of what counts as “apartment”, even if it’s not something most people would want to live in. That means that government initiatives need to specify in high detail what the quality of the apartments should be.
Investors have the goal of getting their money back through rent, so they will usually ensure that what they pay to build is something people will actually want to live in and pay money for. If the housing shortage is severe enough they too can get away with pretty crappy places, but if there’s enough housing available that renters can be a little picky, any investor who built bare minimum apartments would regret their choice.
Would like to buy, but many properties are over priced, interest rates aren’t favorable, and don’t have the money for the required down payment, so stuck renting, and landlords/leasing agents are taking advantage. We need rent control.
We need landlord control. Y’know, like pest control.
Duluth, Minnesota, tried to do some control for absent landlords, requiring that landlords live within or have a representative within X miles of the rental. Unfortunately, all that did was make management companies more overbearing when owners turned to them to be the local contact.
Unfortunately, rent control does have issues in the long run. Less profit for landlords does mean less money invested in new construction by people looking to make a profit. Less new construction eventually leads to shortages. It’s great for those who already have housing, but those searching for a place to live have it more difficult under strict rent control. Though with how long construction projects take from planning to opening, this effect takes decades for any change to be noticeable.
Hypothetically, could a city or other regional government, or even larger scale one, create a state run development company, under mandate to build up the housing supply in a given area even if investors won’t do it?
Yes, but without money from investors they’d have to cover the construction costs from taxes, so it’s not free either.
And government run initiatives have to be very careful with how they set their goals. If the legal mandate is to maximize the number of apartments constructed, and the people in charge are rewarded based on the number of apartments they created on paper, then the result will likely be the bare minimum of what counts as “apartment”, even if it’s not something most people would want to live in. That means that government initiatives need to specify in high detail what the quality of the apartments should be.
Investors have the goal of getting their money back through rent, so they will usually ensure that what they pay to build is something people will actually want to live in and pay money for. If the housing shortage is severe enough they too can get away with pretty crappy places, but if there’s enough housing available that renters can be a little picky, any investor who built bare minimum apartments would regret their choice.
We need more housing.