Rent Control Strategies

[Osazee Edebiri]

Hi BP,

Wondering if anyone has suggestions for rent control units? Rent control  Particularly in Oakland, California.  I have a unit at an excellent rate, and like to get my other units that are at low rents to at least market rate.

[DG A.]

The funny thing is, at the end of the day... rent control combined with NIMBY's against real estate development wind up reducing housing supply, and increasing market rate rents. 

That means when someone finally dies or moves in a rent controlled real estate market, the demand for housing by high income people drives up the market rate rent of a newly available unit. The people rent control is meant to make housing affordable for are priced out in that scenario. At least in California with the current Costa Hawkins laws. If rent control gets even more restrictive... like there's no market rate reset when someone moves out, then it will be REALLY hard for investors to ever be able to buy or sell their real estate. Who wants to buy a $700,000 property with a total $2,500 in rents, and no ability to raise rents to cover the mortgage?