Prop 10 (Rent Control) in California

[Michael Zuber]

So California has a measure on the up coming ballet that likely strikes fear in every landlord and investor and it is Called Prop 10 (aka Rent Control).

First I want it clear that I think any time "Government" interferes with the free market that bad things happen and most of the time the people that get hurt the most are the people the "Government" is looking to help.

Second while I think Prop 10 is a horrible idea and I will vote NO, I fully expect it to pass as it is too sexy a story to say lets freeze rents, lets stick it to the landlords, etc.

So if I think it is going to pass what am I doing to get ready for it and what do I expect to happen?

What I expect first.

I expect it to pass

I expect cities to very quickly pass their flavor of rent control

I expect small landlords to say I give up and kick their tenants out, remodel unit and then sell to owner occupants and first time buyers

I expect California Real Estate in high priced markets to get a lot cheaper at least in the short term

I expect builders of expensive homes to be out of luck as they can't pass on increased costs from tariffs, etc because of a large jump in remodeled inventory 

I expect prices in High Priced Owner Occupant areas (LA, Bay Area, etc) to drop 

I expect Renters to have less choices and they will be hurt the most by Prop 10 in 12 months (Very Sad)

I expect Rents to go up and max out in lots of markets that normally wouldn't because of the Supply problem Prop 10 creates

I expect Cheap Affordable Rentals to see Rental Rates RISE

I expect the negative news cycle to kick in and keep buyers and investors on the side line further hurting prices

I expect to be a very active buyer as listings jump, prices drop and rental rates on Affordable Housing goes up

Should be interesting to watch the dominoes fall and profit from a HUGE buyers market that I see coming

What do you think happens? What am I missing? Do you see a flaw in my outline? 

Please let me know if you see another outcome as I would love to see what I am missing.

Z