Thursday, April 17, 2014

Rent Control Does Not Work




The following is an email I sent to the author of an article in the Los Angeles Times about the problems tenants face due to evictions as developers buy old properties and take them to a better and higher use.
Dear Mr. Khouri,
I would like to respond to your L. A. Times article on Sunday, “Out of Rent Control.”

My first concern is how you use the numbers in the article:
“…owners filed to remove 378 rent-controlled units from the market last year, 40% more than in 2012.”
A 40% increase makes it seem we should be concerned about such a large increase. However, the total units being filed, not removed, is only .0005924 of the 638,000 rent-controlled units. At the current rate it would take 1,688 YEARS to remove all the units from rent control. That’s about 24 lifetimes.

Next, I am one of the mom and pop owners with only 35 units and 20% of them are under rent control. One of my tenants pays only $450 per month for an apartment that rents at market rates for $1450 per month. It is on MY back that this tenant is benefiting by $1000 per month. Neither the city, state or federal government is helping her enjoy decent housing. I am the one paying for that. Nowhere in your article are you telling readers that landlords are the ones who pay for rent control.

Next, it has been proven by study after study* that rent control does NOT provide the outcome of affordable housing that is supposed to be the point of restricting the property rights of owners. Even Jerry Brown understands this and vetoed the most recent legislation to reduce property rights.

Why not push our government to take the actions needed instead of placing the burden and economic consequences on the back of other citizens. Let’s ask our government to put up the money to provide for decent affordable housing for our citizens, all of whom deserve a decent and safe place to live. Isn’t that what our taxes are for?

Please try to write a balanced article next time.
Rennie Gabriel

Rennie Gabriel, CLU, CFP is a UCLA Instructor and the author of the award winning best-selling book Wealth On Any Income.


National Bureau of Economic Research: http://www.nber.org/digest/oct12/w18125.html
And many more

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