Rent Control Remains the Wrong Solution to Housing Woes

“They point out that restricting the price of housing discourages owners from maintaining and improving their property. It can also make it attractive for landlords to pull apartments from the rental market and put them up for sale as owner-occupied dwellings. Those enjoying deals on housing costs might also find themselves in the equivalent of golden handcuffs.
“Tenants in rent‐controlled units become less mobile to avoid losing access to below‐market rents,” add Miron and Aldighieri.

The authors point to studies finding that rent control has reduced the supply of rental housing in communities as far apart as Cambridge, Massachusetts, and San Francisco.”

“the 2019 study cited last month by Miron and Aldighieri looked at a 1994 law change in San Francisco that suddenly extended rent control to housing constructed before 1980. Sure enough, tenants benefiting from controlled rents became less likely to move, while landlords subject to restrictions converted their properties to condos and co-ops or redeveloped them to escape regulation.

Rent controls “reduced the supply of available rental housing by 15 percent,” the study concluded. “This reduction in rental supply likely increased rents in the long run.” Contrary to housing activists’ intentions, “the conversion of existing rental properties to higher-end, owner-occupied condominium housing ultimately led to a housing stock increasingly directed toward higher income individuals.””

https://reason.com/2024/05/03/rent-control-remains-the-wrong-solution-to-housing-woes/

California Is Trying To Drive Landlords Out of Business

“What do the state’s insurance and housing crises have in common? Obviously, homeowner policies have an impact on housing costs, but I’m referring to something different, namely the concept of open-ended risk. Insurers are exiting the market because state policies limit their ability to price policies to reflect the risk of a major wildfire season. They rather pull out of California than risk the destruction of their assets.
I’d argue the same thing is happening in the rental market, thanks to a fusillade of pro-tenant laws that subject landlords to an incalculable level of risk. Landlords have freely entered the business and understand the various ups and downs. They can calculate the costs of mortgages, taxes, insurance, and maintenance. They expect to, say, replace carpets and paint between tenants. They know the cost of the eviction process in those instances where it’s necessary.

But the Legislature’s anti-property-rights crusade—done in the name of protecting tenants in a tight housing market—has not only increased those easily calculated costs, but also the costs that are potentially devastating. It’s one thing to realize it might require x-number of legal fees to remove a bad tenant and quite another to wrap one’s head around the possibility of someone staying in a rent-controlled unit forever.”

https://reason.com/2024/04/19/california-lawmakers-are-trying-to-drive-landlords-out-of-business/

Squatters Invaded His Mom’s House—so He Fought Back

“What if you come home and find strangers living in your house?
I assumed you order the squatters out, and if they resist, call the police, and they will kick them out.

Wrong.

Pro-tenant laws passed by anti-capitalist politicians now protect squatters. If a squatter just lies about having a lease, the police won’t intervene.

“It’s a civil matter,” they’ll say. “Sort it out in court.”

Great. Court might cost $20,000. Or more. And courts are so slow, eviction might take years.

In my state, New York, homeowners can’t even shut off utilities to try to get the squatter out. That’s illegal. Worse, once a squatter has been there 30 days, they are legally considered a tenant.

This month, New York City police arrested a homeowner for “unlawful eviction” after she changed locks, trying to get rid of a squatter.

“Squatter rights,” also known as “adverse possession” laws, now exist in all 50 states. As a result, evicting a squatter legally is so expensive and cumbersome that some people simply walk away from their homes!”

https://reason.com/2024/03/27/squatters-invaded-his-moms-house-so-he-fought-back/

Biden’s Plan To Subsidize Homebuyers Won’t Work

“Higher rents and home prices are a natural consequence of local and state zoning laws, labyrinthine approval processes, federal restrictions on mortgage financing, and environmental reporting laws, to name a few.
All these laws limit the supply of new housing, which drives up the price for any given level of demand. That’s a diagnosis the Biden administration itself has endorsed in various housing briefs and “action plans.”

Despite that insight, the president’s proposals to subsidize home buying will, all else equal, increase demand while leaving supply constraints in place. That will only raise prices further.”

https://reason.com/2024/03/07/bidens-plan-to-subsidize-homebuyers-wont-work/

Rent Control for the Rich

“Documents shared with Reason show the rents paid by several New York City tenants at their rent-stabilized apartments. Other documents shared with Reason, as well as public property information, show the same tenants own additional property worth north of $1 million. Some of these rent-stabilized tenants are themselves landlords who rent out their properties for more than what their rent-stabilized apartments cost.
That includes a married couple with a four-bedroom home in the tony community of East Hampton, New York. The husband is a wine broker. The wife is a real estate associate with Sotheby’s International Realty. A county document show their East Hampton property has an appraised value of $2 million.

The couple’s address on that same document is a rent-stabilized apartment in Lower Manhattan where the legal rent as of September 2023 is $931 a month. Online rental listings show market-rate one-bedroom apartments in the same neighborhood renting for anywhere from $3,000 to $7,000.

Another woman, an anthropologist with her own consultancy firm, is listed as the lessee of a Brooklyn Heights apartment with a legal monthly rent of $2,436. Market-rate one-bedroom apartments in the same neighborhood go from $4,000 to $5,000 a month.

County property records show that the same woman owns a home in the Long Island community of Greenport, New York. She advertises it as a vacation home for rent on her personal website, and it’s listed on several rental websites with a quoted monthly rental price of $12,000.”

“This is all perfectly legal. New York’s rent stabilization law has no means-testing requirements. That means people of any income can benefit from its suppressed rents.

Wealthy tenants are getting some of the best deals out of the state’s rent stabilization law. An in-depth Wall Street Journal analysis from 2019 found that regulated rents in richer Manhattan are around half that of market-rate rents. Regulated rents in working-class areas of Queens and the Bronx are at most few hundred dollars less than market rents.

Higher-income rent-stabilized tenants were paying 39 percent less rent on average than their peers in market-rate apartments. Lower-income rent-stabilized tenants were paying only 15 percent less than their peers in market-rate apartments.”

https://reason.com/2024/01/09/rent-control-for-the-rich-2/

San Francisco’s Can-Kicking on Zoning Reform Could See It Lose All Zoning Powers

“It takes San Francisco three years on average to fully approve new housing projects, the longest of any jurisdiction in California, according to an audit published by the state Department of Housing and Community Development (HCD) in October.
The very predictable result is that the Golden State’s fourth-largest city is also one of the nation’s most expensive, with median one-bedroom rents above $2,000 and a median home value of $1.4 million.

That San Francisco is expensive because it takes forever to approve new housing isn’t a new finding. Whether the city will actually get rid of the regulations gumming up home construction is now coming to a head.”

https://reason.com/2023/12/05/san-franciscos-can-kicking-on-zoning-reform-could-see-it-lose-all-zoning-powers/

Banning Criminal Background Checks Will Lead To More Housing Discrimination, Not Less

“top-down reforms like the one proposed by Pressley and Tlaib would shift more of the risk of housing ex-cons onto landlords. The result is both unjust and counterproductive.
Remember the Obama-era initiative to “ban the box”? Reformers sought to boost the job prospects of persons with criminal records by prohibiting employers from asking about applicants’ criminal histories. It was another well-meaning idea, but one that overlooked unintended consequences. Preventing employers from discriminating based on criminal history didn’t remove the desire of some employers to avoid hiring criminals; it just forced them to use poor information. More employers began discriminating against black and Hispanic applicants. Evidence suggests a similar outcome if criminal background checks of tenants are restricted. A study published by the Federal Reserve Bank of Minneapolis found that when the use of background checks and other information was restricted in that city, racial discrimination in housing increased relative to nearby St. Paul, where no such restrictions were in place.”

https://reason.com/2023/09/28/banning-criminal-background-checks-will-lead-to-more-housing-discrimination-not-less/