Rent Control: A Nightmare To Avoid

Parking rules raise your rent

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In case you are not yet convinced about the damaging effect of rent control, I invite you to internet read this article from the Library of Economics & Liberty. Now that we have established how terrible rent control is for real estate investment and therefore quality of housing that is available in a given area, I’ll be talking about another type of rent: interest charged on debt. Interest rates effect the amount of rent you must pay on money you are borrowing. A central banking system such as we have can, and has, artificially lowered the interest rates across the board and this rate has become distributed across most assets and therefore investments. Imagine if city A is implementing rent control, forcing returns on investment properties to drop from say 8% to 5%, investors will start investing in city B that does not have rent control. This flood of investors in city B will push down returns from 8% to 7% or 6%, even if this city enjoys no rent control, just because there are more competing buyers pushing the prices up, and returns down.
For the original version including any supplementary images or video, visit http://www.safehaven.com/article/31054/rent-control-a-nightmare-to-avoid

Rent Protest

You sit down with your architect and start laying it out for apartments. The more apartments, the more housing you can provide, and the more money you can make. So the architect fills the lot with housing, right out to the city-required set-back boundaries near the edges of your property. She builds it as tall as the legal height limit for that zone too. You can erect 50 one-bedroom apartments, she announces, each of about 550 square feet.
For the original version including any supplementary images or video, visit http://grist.org/cities/parking-rules-raise-your-rent/

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