Posted by
Playful Walrus on Tuesday, January 29, 2008 12:10:09 PM
Shouldn't a property owner be able to charge what the market will pay for use of their property?
Patrick McGreevy,
Los Angeles Times Staff Writer,
reports on a ballot measure that would phase out rent control laws in California.
Having toiled in machine shops during World War II and worked for decades in other manual jobs, 84-year-old Mary Kubancik felt entitled to live out her years in a pleasant mobile home park in Sylmar.
Instead, the frail Kubancik is preparing to move out after 19 years. Her $919 monthly Social Security check won't cover her essentials and the $702 that her mobile home space will cost when the latest double-digit increase takes effect in April.
"I worked since I was 14 years old, and this is all I have," she said, tears vying with anger in her eyes. "I had to sell. And this was supposed to be my golden years."
It is typical for these stories to pick “hard luck” stories. But I have to wonder what Ms. Kubancik did with her earnings, since she was working since age 14? Why wasn’t she living within her means with some money left over to save and invest? It’s too bad she was paying into Social Security. She would have been better off investing that money herself.
Across town is Robert Kubota, 66, a pharmacist and chief executive of a family firm that operated a mobile home park in Chula Vista for 44 years. He blames rent control laws for six years of financial losses on the park. A Bankruptcy Court judge agreed that the business was not sustainable and approved a plan that led to the closure of Jade Bay Mobile Lodge last year.
So the place gets closed down entirely. How does that help anyone?
In the spring, voters will decide whose interests prevail. More than 100 owners and operators of apartment buildings and mobile home parks spent nearly $2 million to put an initiative on the June 3 ballot to phase out California's rent control laws. About 1.2 million people statewide are covered by such laws.
Los Angeles, which has 626,600 rent-controlled residential units, could be affected more than any other city if the measure passes.
There
is a private way to control rent. It is called leasing or buying.
Proponents tout the measure as one that would limit government's use of eminent domain, preventing the taking of private property for private development. Although that is the first provision of the measure, it goes on to phase out rent control. Opponents have dubbed the measure the "Hidden Agenda Scheme," in part because rent control is not mentioned in the ballot title.
"Homeowners want true eminent domain protections but will not be duped into enacting harmful and deceptive provisions that have nothing to do with eminent domain, said Ken Willis, president of the League of California Homeowners.
It’s all a matter of
protecting property rights.
The measure says rent control laws enacted before Jan. 1, 2007, would remain in effect for tenants who were living in the controlled units as their principal residence. When the tenant leaves, rent control would be removed from that unit.
See – that is an important aspect of this.
People won’t be thrown out onto the street, although I can see landlords doing whatever they can to encourage people to leave.
Generally, the laws allow landlords to raise rents by a limited amount -- in many jurisdictions by the amount of the consumer price index. Whenever a unit is vacated, the landlord can reset the rent at market level. But while the unit is occupied, rent increases are subject to controls.
"That sets a perverse incentive for landlords to charge the highest rent when an apartment is vacated," said Jon Coupal, president of the Howard Jarvis Taxpayers Assn.
Coupal said the long-term effect of rent control laws is to reduce the amount of affordable housing because developers won't invest in it.
Artificial government controls can have negative effects, no matter how good the intentions.
Tenant-rights advocates say that if rent control is phased out, many poor and elderly people will have no place to live.
How so? People can remain where they are and still have their rent controlled. Lifting rent control won’t suddenly make more people. There are only so many “wealthy” and “young” people seeking a place to rent. While the “poor” and “elderly” new to an area may not be able to live exactly where they want with as much room to themselves, they’ll likely still have a place to live.
A more free housing market will mean more investment in housing.