Impractical
How would this be implemented?
If I have a rental property that I want to rent for $1500 a month what happens is a person with an income that states they can only pay a rent of $1000 A month. Would I be forced to lower the rent or could I refuse to rent to them? If I could refuse then this policy would be useless.
If I could not I would get out of rental units very quickly.
I want to hear everyone's thoughts about this. We have had minimum wage laws for decades now, and we've had plenty of debate about it and we know more or less where everyone stands. I want to talk about another price control, and that is rent. What if we passed a law stating that landlords could charge no more than 25% of a household's income as rent. That is, a family that makes $4000 per month could be charged no more than $1000 per month in rent.
The immediate reaction I hear is that this will just increase homelessness, but let's think this through. Is that really true?
For the rich the impact is negligible, at least on their primary residence. Now what about the poor? Well, they're already paying 50%+ of their income toward rent. Are we really expecting for all of them to be homeless? That's quite doubtful, just like minimum wage increase don't cause unemployment rates to skyrocket to 15%. On the margins there are effects, but they're never as large as detractors make them out to be. So landlords would take a hit, yes, but the poor would also have more money to spend, helping other industries to have a larger market.
So let's think this out and have a real debate on the issue. Or, are you totally oblivious and fine with the fact that massive numbers of Americans are being absolutely fleeced just to have a roof over their heads?
When we bought a house to rent out the rent we charged was the cost of the mortgage payment, taxes and insurance, and a small amount put aside for maintenance. We made our profit on the increase in the value of the property. If we hadn't been able to make back those costs the house wouldn't have gone on the rental market.
There are too many other factors involved in rent control on a universal basis - the cost of ownership being just one. No one, not even the government, can require me to lose money in my business for the benefit of others. Price controls do not work on market segments that have broad tentacles into other markets and can impact the overall economy so vastly. The only way true rent control can work, is for the government to own the housing - all of it.
I want to hear everyone's thoughts about this. We have had minimum wage laws for decades now, and we've had plenty of debate about it and we know more or less where everyone stands. I want to talk about another price control, and that is rent. What if we passed a law stating that landlords could charge no more than 25% of a household's income as rent. That is, a family that makes $4000 per month could be charged no more than $1000 per month in rent.
The immediate reaction I hear is that this will just increase homelessness, but let's think this through. Is that really true?
For the rich the impact is negligible, at least on their primary residence. Now what about the poor? Well, they're already paying 50%+ of their income toward rent. Are we really expecting for all of them to be homeless? That's quite doubtful, just like minimum wage increase don't cause unemployment rates to skyrocket to 15%. On the margins there are effects, but they're never as large as detractors make them out to be. So landlords would take a hit, yes, but the poor would also have more money to spend, helping other industries to have a larger market.
So let's think this out and have a real debate on the issue. Or, are you totally oblivious and fine with the fact that massive numbers of Americans are being absolutely fleeced just to have a roof over their heads?
What, specifically, would go wrong?
And where would it have gone instead?
I want to hear everyone's thoughts about this. We have had minimum wage laws for decades now, and we've had plenty of debate about it and we know more or less where everyone stands. I want to talk about another price control, and that is rent. What if we passed a law stating that landlords could charge no more than 25% of a household's income as rent. That is, a family that makes $4000 per month could be charged no more than $1000 per month in rent.
The immediate reaction I hear is that this will just increase homelessness, but let's think this through. Is that really true?
For the rich the impact is negligible, at least on their primary residence. Now what about the poor? Well, they're already paying 50%+ of their income toward rent. Are we really expecting for all of them to be homeless? That's quite doubtful, just like minimum wage increase don't cause unemployment rates to skyrocket to 15%. On the margins there are effects, but they're never as large as detractors make them out to be. So landlords would take a hit, yes, but the poor would also have more money to spend, helping other industries to have a larger market.
So let's think this out and have a real debate on the issue. Or, are you totally oblivious and fine with the fact that massive numbers of Americans are being absolutely fleeced just to have a roof over their heads?
I want to hear everyone's thoughts about this. We have had minimum wage laws for decades now, and we've had plenty of debate about it and we know more or less where everyone stands. I want to talk about another price control, and that is rent. What if we passed a law stating that landlords could charge no more than 25% of a household's income as rent. That is, a family that makes $4000 per month could be charged no more than $1000 per month in rent.
And what would happen with those rental units?
Well, we wouldn't have bought it and my guess is someone would have bought it to live in it.
Point is, there has to be enough money in the deal for it to be worthwhile for someone to rent it out.
Besides the costs, being a landlord is a giant pain in the butt. We'll never do it again.
I want to hear everyone's thoughts about this. We have had minimum wage laws for decades now, and we've had plenty of debate about it and we know more or less where everyone stands. I want to talk about another price control, and that is rent. What if we passed a law stating that landlords could charge no more than 25% of a household's income as rent. That is, a family that makes $4000 per month could be charged no more than $1000 per month in rent.
The immediate reaction I hear is that this will just increase homelessness, but let's think this through. Is that really true?
For the rich the impact is negligible, at least on their primary residence. Now what about the poor? Well, they're already paying 50%+ of their income toward rent. Are we really expecting for all of them to be homeless? That's quite doubtful, just like minimum wage increase don't cause unemployment rates to skyrocket to 15%. On the margins there are effects, but they're never as large as detractors make them out to be. So landlords would take a hit, yes, but the poor would also have more money to spend, helping other industries to have a larger market.
So let's think this out and have a real debate on the issue. Or, are you totally oblivious and fine with the fact that massive numbers of Americans are being absolutely fleeced just to have a roof over their heads?
Should Chevy be forced to charge the same for a Corvette as a Malibu? Should Steak and Lobster cost the same as a Big Mac and fries?
I think the point is that these things have a price on them to begin with. If I understand the argument correctly, food, shelter and medical care are all necessities of life and should be provided freely to all who need them.
Remember the 2008 Housing Crisis? That was nothing compared to the market crash that would occur.
Well, we wouldn't have bought it and my guess is someone would have bought it to live in it.
Government price controls are NEVER a good idea...whether applied to the price of labor (minimum wage) or the price of housing (your idea). Price controls always artificially disrupt the natural dynamic of supply and demand. This always results in reduced supply.
If you want the government to make housing available to low income people, then use taxpayer funds and have the government get into the rental business.
A family shouldnt look at apartments that are more than 25% of their income then.
I know we've been around and around on this and you just believe landlords are parasites.
But to demonstrate further your lack of accepting reality...how would your proposal work? Someone has a nice garden apt with 3 bedrooms/2 baths for rent. A family that cant afford anything close to what it's worth applies to rent it...does the landlord have to take $250/month when it's worth $1200/month?
What about the family that applies and $1200 IS 25% of their income? Do they get turned away?
They would be sold for full market value.
Still placing them out of reach of the low-income.
In the scenario I provided the landlord can turn away whomever they want.
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