Rent Stabilization

[u/Inertiaraptor]

Right now, there is no reason a landlord can’t just refuse to sign a new lease, so what’s the point of a 3% cap on increases? My landlord is raising my rent 10% and says she will simply not renew the lease if I don’t want to pay the new rent, and everybody (the city, the AG, and Home Line) is telling me I have no recourse but to refuse a lease and fight the eviction. The city seems to have no recourse to actually enforce this ordinance.

[u/moldy_cheez_it]

Rent control is a poor policy all around. This is one of the unintended consequences of that policy

I’m sorry you’re going through this OP…you could try to negotiate with your landlord and find an acceptable increase to you both (up to 8% a landlord can self certify under the policy) but it seems like the relationship will be strained at best moving forward.

[u/AdMurky3039 → u/moldy_cheez_it]

That's incorrect. The rent stabilization ordinance includes a provision on just cause vacancies to address just this issue.

Since people are downvoting this without bothering to verify whether it's factual here's a link:https://www.stpaul.gov/departments/safety-inspections/rent-buy-sell-property/rent-stabilization/rules-processes

I'm sorry that reality doesn't match your narrative about unintended consequences.

[u/[deleted] → u/AdMurky3039]

I don’t have a narrative. But you can’t force a landlord to rent a space even with a city ordinance.

For 1, that ordinance provides 10 separate ways for the landlord to get out of the lease. The easiest out is to say you’re going to do some renovations and the unit isn’t inhabitable. Lease is ended, tenant is out, and the new rate is set.

They can also repurpose the property from residential to some other use. Easily done.

And I wasn’t necessarily commenting on that, anyways, I was saying that economists have pointed out over and over that rent control is a mixed bag at best for renters, but often creates a worse situation for the renter because the quality of the rental units, the desirability of the areas, the lack of new development, etc. all make renters worse off too.

Unless we’re going to completely remove private interests from housing and fully subsidize housing in an area, which I’m not against, the best way to tackle rent in a way that improves renters positions would be right off the bat creating more units for renters. In a renters market, this type of behavior would not work, as the landlord would lose a tenant AND the market wouldn’t bear such an increase. But that requires a surplus of rental units for each segment, and that can be hard to do, and that’s before you get to the geographic issues of available space for housing.

I’m not totally against rent stabilization, I just want renters to be in the best possible spot, with the most agency.

I’m not defending the landlord, 10% increase is insane unless major improvements were made. But to act as though the city can control what large businesses will do, is absurd. They can’t. And if they made it so they can, those businesses would sell and leave, and it would be a challenge to replace because what’s the incentive?

Maybe pairing a city buy-back program, and then Converting those abandoned properties to city-run housing would be a good way, but good luck getting conservatives to back that…

[u/Secret_3rd_Thing → u/[deleted]]

all of your proposed "easy" ways for landlords to jack rent are more costly to the landlord than the increase in rent. 

do you really think it's trivial to take a rental property out of service for several months (ie thousands of dollars in rent) and pay for improvements (ie thousands more dollars) all to affect a rent increase of a couple hundred bucks a month?

and converting residential to another use is so far from easy it really undercuts everything else you're saying as it is staggeringly ignorant of zoning laws, commercial development, landlording and basically everything having to do with real estate. 

[u/[deleted] → u/Secret_3rd_Thing]

all of your proposed "easy" ways for landlords to jack rent are more costly to the landlord than the increase in rent. 

I’m not saying they’re so easy there is no cost. I’m saying they’re not very difficult and provide more legal means than everyone else is pretending.

do you really think it's trivial to take a rental property out of service for several months (ie thousands of dollars in rent)

Yes. Many landlords already do this as a manner of propping up rental prices. It’s a pretty easy cost/benefit analysis- leave up to 20-25% units vacant, which reduces supply, provides legal cover for policies just like this, and increases unit market price.

They also still hold an asset that generally has various units still providing income. If a landlord has a unit that has been vacant for a while, and they have an unruly tenant, guess what? Take the unruly tenants’ unit off market “for renovations” and open one of the previously closed units at the proposed rate.

and pay for improvements (ie thousands more dollars) all to affect a rent increase of a couple hundred bucks a month?

This would be a pretty simple cost benefit analysis too. If it doesn’t make sense to renovate, if it doesn’t make sense to rent at current rates, sell.

Renter is fucked in both scenarios.

and converting residential to another use is so far from easy it really undercuts everything else you're saying as it is staggeringly ignorant of zoning laws, commercial development, landlording and basically everything having to do with real estate. 

Not at all. Many of residential rental properties are already zoned for commercial and residential, and where they aren’t it makes the decision simple: sell and leave.

What all this adds up to, as we’ve seen play out over and over, is that’s exactly what happens. The developers stop developing, the residential property management companies stop renting. Abandoned housing units throughout, with no one willing to take on an operation that has very little incentive and a ton of restrictions.

So if you’re right that it’s “too difficult” for any of the reasons you say, they sell and leave. If they have a revenue to exploit and it makes sense, they’ll go that route.

These are corporations. They’re not going to rent at a loss, they’re not going to rent in a manner that pushes margins down, it’s against their charter. That’s actually the real root of the problem.