From: Mermaid (hidden@lucifer.com)
Date: Mon Oct 27 2003 - 07:58:56 MST
Rent controls were introduced by the govt as a measure to combat raising rents in cities. Why do rents soar? As land and housing in urban areas become scarce, landlords increase rents to exploit the growing demand. While a sensible rent control policy is desirable, rent controls in places like nyc is just plain ridiculous. The wisdom of rent control is shattered when the rent is enough to pay the property taxes, costs of maintaining and repairing housing units. Also, in a controlled rent environment, many people cannot find housing units as people stay too long in their old digs to milk the full worth of rent control. Note that rent control does not always mean that the rents are kept under market levels. In some places just outside san francisco(not necessarily san francisco, but in the bay area), rent control is in the form of making it illegal to rise the rent by more than 5% for an old tenant.(or something like that..in theory) This is probably a more sensible form of rent control. Rent controlled apart
ments have little investment potential and if it is imposed on an entire neighbourhood, it will affect the building of new structures and the upgrading of the rent controlled housing units. When rent control is abolished and rent reaches market values, excess demand for housing units as the old tenants will move out and new tenants willing to pay market rents will move in leading to more efficient use of housing space. Do I approve of rent controls? Not all the time. Can rent controls be effective? Only rarely, but it is possible. I just cant come up with an example off the top of my head.
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