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Rent Control - The Property Owners “Right to Life” Issue
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There are several issues that can illicit such passioned opinions as rent control. Okay let’s exclude abortion and illegal immigration and just stay focused upon the intent of this blog which is real estate. On June 3rd you will have the opportunity to state your opinion as this issue will go before the voters. As you can imagine the backers of this proposal are property owners. According to the LA Times, the sponsors of this initiative have spent about $2 million to put this before the electorate.
No Rent Control in Pasadena
There have been past attempts to put “rent control” on the ballot here in Pasadena. It has yet to be successful. 
This issue really has more to do with the City of Los Angeles and its 600,000+ units that are currently under the rent control provision. If the measure is passed in June it does not immediately impact the tenants who reside in a rent controlled building, but it would eventually phase out the cap, provided the tenant vacated the building. A property owner who owns a rent controlled property is only allowed an annual rent increase of 4%.
A Divisive Issue
Attempting to limit the amount of income a property owner can receive is the antithesis of capitalism and the free market system. An individual land owner has no obligation to guarantee the “life, liberty and pursuit of happiness” to a tenant. What we do have are activist city councils who in their attempt to “provide for the common good”, ignore the rights of owners to set their own rates and maintain their properties. Rent control provides no incentive to maintain and upgrade living standards, since you get what you get. Just ask the city. In the intent, we loose the translation. The same proponents of rent control are the same people who get the full benefit of Prop 13. I got mine, now you need to give up yours.
Why Not Intellectual Property?
If cities have a need to impose controls on rent and real property, then let’s go ahead and extend the same restrictions to intellectual property. I would like to see the city of Los Angeles or Santa Monica tell Microsoft that instead of charging $199 for a Vista upgrade, they are limited to only $99. And while we are at it, tell Warner Brothers and Sony that the new DVD’s can only retail for $9.99, not the suggested retail of $19.99. Now I think you begin to get the idea of how ridiculous this concept is.
Well Intended But Misdirected
Rent control in theory is a good concept. Due to the extraordinary cost of living in this area there should be a subsidy for those who can least afford it. You just cannot expect the small investor to tote the note. Cities should also explore more options for affordable housing. Unfortunately, these are complex issues with no easy answers.
Tags: rent control
February 4th, 2008 at 11:14 am
Cities should not be able to dictate rents in a given area. This infringes on property rights of individuals to make a property on their investment.
June 8th, 2008 at 11:50 pm
I’m for rent control. I teach in Pasadena, and honestly it’s quite expensive to live out here.
Rent especially is ridiculous. I’ve seen studio apartments that go for well over 1300 a month
(not counting utilities and of course basic living expenses).
Which is pretty hard to make when your only pulling 1700-1900 a month after taxes.
Property owners would not go broke by a cap, they could still raise their rent every year, it
would just force them to keep more in line with the cost of living for the rest of us.
July 2nd, 2008 at 3:03 pm
Mr Willis,
What is the maximum allowable rent increse in Pasadena (or California) for a property that is not under rent control? (Move in date was with in teh last two years - no rent increases in that time).
I was under the impression that the State of California had a maximum allowable.
I look forward to your reply. Thank you in advance.
Kind regards - Charles Kennan.
July 11th, 2008 at 12:13 pm
Charles, I spoke with an attorney with the California Assoc of Realtors. There is no maximum increase allowable on a non-rent controlled unit. She did however cite an example such as doubling a persons rent could be seen as an example of retaliation if a tenant had complained or ask tht something be cortrected.
August 6th, 2008 at 5:22 pm
I really don’t see rent control hurting landlords, but tenants can be hurt without it. This article seems to suggest that the landlord’s profits are somehow more important than the livelihood of the tenant. With rent control, the landlord can still increase the rent every year, but they are limited to an amount that can be fairly managed by the tenant. Rent control basically requires property owners to be REASONABLE about their rent increases. From a tenant’s perspective, if my rent suddenly went up more than I can afford, I would consider that a pretty unfair increase and would be forced to move. Besides, with rent control, a landlord can still charge whatever rent they want from NEW tenants, they would only be limited to a 4% increase every year thereafter.
I understand we live in a free market, but there are those few things in life that we can’t avoid relying on to maintain a modest living, one of those things being housing. I believe, to a reasonable degree, there needs to be some sort of regulation that keeps hard working people from being taken advantage of by greed. I certainly don’t feel entitled to live in a fancy place when I can’t afford it- that will come later in life after I have worked for it. However, I refuse to live in Section 8 housing amongst drug addicts and alcoholics who take advantage of welfare because they don’t want to work for a living. I don’t mean to stereotype here, I just know that my dad’s neighborhood started getting some pretty bad neighbors once Section 8 started moving in.
February 1st, 2009 at 4:02 am
Did rent control initiative pass in Pasadena?