As a landlord (in a different city where things are sensible and I can raise my rent or evict my tenant any time I darn well like because it's my fricking property) this kind of thing makes me really angry.
I'm not happy with the concept as a tenant either. It distorts the economy and artificially reduces the supply of properties that are available to rent.
>> "I can raise my rent or evict my tenant any time I darn well like because it's my fricking property"
Of course you're going to think that - it's in your best interest. But it's not fair to a tenant. Without regulations on evicting people asshole landlords could make families homeless for no reason. I don't think you should have to pay to evict someone but if you rent your property out there should be regulations in place to protect the tenant. If there weren't I think you find the market for rental properties start to diminish. People who could afford to buy (and that's true of a lot of renters) would to avoid the risk of their lives being turned upside down overnight.
Your hypothesis about rental markets diminishing in areas without rent control isn't supported by empirical evidence. Quite the opposite in fact. Essentially all studies have found that markets without rent control have much more robust and stable housing stocks.
How is it unfair to tenants? Tenants sign a lease for a period of time with a fixed price. The lease's fixed price protects both parties. When that lease is up, the landlord and tenant should be free to negotiate a new price.
If tenants want stable prices over a longer period of time, then they should negotiate a multi-year contract with the landlord. All of the protections you're discussing are already built into the concept of a lease.
If either the tenant or landlord is not willing to agree to a longer contract, then that should be their right. (Why should anyone be forced to lock in the rental price of their property for years, even while the circumstances of the city are changing -- e.g., receiving investment or decaying; people moving into the area or out of it.) If one party wants a longer contract and the other does not, then the party who desires the longer contract should offer something in exchange for lowering the other party's flexibility. It all plays into the price of the contract.
I personally prefer to rent month-to-month because I value my ability to pick up and leave any time more than I worry about the uncertainty of being randomly evicted. Someone who wants a five year lease should negotiate differently and get a different price than I do (whether higher or lower depends on the circumstances).
Plenty of properties will advertise "no pets", but you can negotiate with the landlord about that. For example, you might offer an additional deposit against pet damage, or offer to pay a cleaning fee when you leave. I have pets and I have always been able to talk landlords out of their "no pets" policy.
If you offered the landlord double the lease price in exchange for a 2 year contract, will they take it? Almost certainly. Few contracts of that type are truly take it or leave it. My point is not that 2x would be fair, just that you have the ability to negotiate, which means the question of whether you can get a contract with the terms you want depends on your ability to negotiate a price for those terms.
Many landlords value stability and will be happy with a longer term lease at the same price, or even a lower price. And that's where the negotiation comes in. If the landlord believes prices in the area will rise steadily, then he may or may not want to offer a fixed price over a 3 year lease. Perhaps he will offer a longer lease, but with a stipulation of 3% price increase per year. You don't believe prices will rise that much, so you counter with 1% YoY. It's like buying a housing future. You're locking in the price of housing now as insurance against it changing in the future. That should properly have a different price than a lease with no such provision.
If a person believed in rent control, why not go further? Fix the price of property itself so that it may not rise more than 1% per year. If you buy a house from someone, the sale price may not be greater than the last sale price increased by 1% YoY. Would this be desirable? A law like this will have all sorts of negative consequences on the economy. For example, imagine a house owner who no longer wishes to live in the city. If prices were allowed to rise, then he's incentivized to sell his house, cash out on the increased price, and move somewhere else, enabling a person who wants to live in the city can do so. But if prices are not allowed to rise, then he's stuck selling is house for the same price he bought it; he has no incentive to move. Someone is willing to pay him much more for that house, but they can't. This is what it means for resources to be allocated efficiently, and it depends on the ability of prices to change over time.
Fixing prices also affects investment. For example, if I believed that prices were likely to rise in some area, then I'm incentivized to buy property there, build housing or fix it up, and sell or rent it to capitalize on that price increase. The rising prices bring investment: I might build an apartment building to take advantage of rising rents. By comparison, if I know that my property will be rent controlled, then that limits my financial upside from investment, and removes my incentive to invest, which is also bad for the economy if it would otherwise happen naturally.
That's why you sign a lease. You can't raise rent for the duration of the lease. Your landlord should give you notice that the rent will be going up, thus giving you ample time to find a new place. If a tenant wants more stability, then they should consider buying a place.
Also, as a counterpoint, Seattle has no rent control, and the fastest growing population of any large American city yet is able to provide good housing options to people of all incomes. This of course may be due to more liberal zoning laws allowing new housing to be built.
I'm not really in favor of rent control, but your attitude is precisely why it exists. Who wants to enter into a contract with someone so avowedly uncooperative?
If there were an infinite supply of housing, and tenants could choose landlords, I'd agree with you. In the city I live in, it's common practice for tenants to work entirely through agents, and a severe housing shortage means that landlords can get away with pretty much anything. We were not even told who our landlord would be prior to signing the agreement.
Thats how slumlords come to exist... landlords that nobody wants to do business with, but some people (usually poorer people) are forced to by necessity. Basic housing isn't a luxury good - when you need a place to live, you need a place to live, and you're limited in your ability to wait until a unit with a better landlord comes available.
People often do things they don't want to outside the confines of economic models of perfect competition. That's why contracts of adhesion are sometimes found to be unconscionable.
That's a troublesome definition of "wanting" something. I don't want to rent a Honda Civic, in the sense that I would much rather rent a Ferrari if that were an economically feasible option. But I do want to rent a Honda Civic in the sense that it's the best option that is economically feasible for me.
There's a significant difference between wanting to enjoy top-of-the-market luxury and wanting to avoid nasty financial shocks related to (probably) your largest economic expense. Landlords can buy eviction insurance for only around $10 per month but I don't see the market offering any equivalent for tenants.
And I'm pretty sure you don't want a rent a Honda Civic from a company that might decide to jack up the price half-way through your rental period, or lock you out of it regardless of where you happen to be at the time.
> As a landlord (in a different city where things are sensible and I can raise my rent or evict my tenant any time I darn well like because it's my fricking property) this kind of thing makes me really angry.
It would be interesting to see how quickly your attitude would change if you weren't wealthy and were living under a landlord such as yourself.
Any day, for any reason or no reason, your entire life can be turned upside down. You can be effectively made homeless and given a very limited amount of time to find a similar alternative place to live that may or may not exist and may or may no be close to your work (which matters when you're poor and cannot afford public transport).
The power imbalance in this type of situation is just horrifying. Even if the tenant pays their rent on-time the landlord could still easily utilise the eviction threat in order to control the tenant (e.g. "your apartment is untidy, clean it or I'll evict you." "You went to a protest last week that I disagree with, goodbye!" "Give me your postal vote or I'll evict you.").
It might be your "property" but it is someone elses HOME. Their basic rights trump your property rights.
That's why regulation has to exist to stop people like you, so people (particularly poor people with fewer choices), get basic rights and the power imbalance is corrected.
I'm not referring to rent control: I am talking about privacy of the tenant (inspection notification periods, etc), notice for evictions (e.g. 30 days), written understanding of both the tenant and landlord's responsibilities (or default ones under the law if they lack), and so on.
It is your property, but when you rented it to someone to be their HOME part of that transaction is taking money but in exchange knowingly enabling someone else's basic rights. Those basic rights don't start and end at a rental cheque.
> You seem to be postulating a landlord that owns all the property. If you don't want to rent to me I can always find someone else.
I am not postulating anything, it is a hard cold fact: If a landlord evicts a tenant with no notice they're at that point homeless (as in "with no home").
They might be able to find another property, maybe, but they also might not. It doesn't take a single landlord to own all properties in order to make it difficult for a tenant to find no place to live on literally 0 days notice (particularly when a lot of tenants living in rental accommodation are very cost constrained).
> Most poor people don't have a job but do have a car.
People in general don't have cars in the city, poor or rich.
If someone is living on near minimum wage, and their home is moved from 10 minutes away to 20+ minutes away that is a big financial blow. That's more money, which they likely don't have, going to transport.
It will be harder to find the "right" apartment if you have 0 days notice within which to do so. If you had a month or more to look for a new apartment you might be able to find something more suitable to your needs and budget.
> Incidentally, your concern about poor people being unable to commute to work is a bit silly.
There are people who can barely afford to put food on the table, my concerns about public transport costs are quite valid I assure you.
If you are worried about finding a place with 0 days notice, ask that your lease include a "30 days notice" clause. I've never seen a lease agreement that didn't have one.
Most lease contracts are 12 months. That gives you 1 year of warning.
There are people who can barely afford to put food on the table
Poor people are typically fat.
The typical poor person has no job, if he does have a job it isn't minimum wage, and he has a car. He would also be healthier if he put less food on the table.
Why do you keep discussing these completely atypical poor people, and extremely uncommon rental contracts?
That link doesn't claim what you claim it claims. It talks about impact, and excludes a large chunk of the population for different reasons that it doesn't go into great lengths to justify (see page 597 (6 on the PDF)).
Also the definition that they use for povery is extremely literal, see here for more info on that:
Even with their massive amount of exclusions it still impacts almost 10%.
>> There are people who can barely afford to put food on the table
> Poor people are typically fat.
That's an incredibly ignorant thing to say. It is like responding to global warming by saying "it is snowing outside!"
Obesity is a side-effect of poverty. One person being obese doesn't exclude another from starving.
> The typical poor person has no job, if he does have a job it isn't minimum wage, and he has a car. He would also be healthier if he put less food on the table.
That's just raw bigotry now. You have given up the pretence even, you just hate poor people.
> Why do you keep discussing these completely atypical poor people, and extremely uncommon rental contracts?
They aren't atypical, they're extremely typical. Even according to your own link they make up around 10%. According to less exclusionary sources they make up more.
That link doesn't claim what you claim it claims. It talks about impact,
The focus of the paper is on impact, and along the way it counts people (including poor people) with wages between the current minimum wage and a proposed increased minimum wage. I have no idea what you mean by "massive amount of exclusions".
That's just raw bigotry now.
If so it's bigotry on the part of the BLS and Census. I guess you assert they are lying? If all the statistics (or at least the ones that disagree with you) are lies, there is no point continuing the discussion, since we can't get anywhere.
>
You seem to be postulating a landlord that owns all the property. If you don't want to rent to me I can always find someone else.
So, you pay off all the utility bills at the old property. You maybe get some of the deposit back. You maybe get some rent back if you were paying in advance; or you have a debt if you were paying late.
You then need to pay a month's rent in advance, and a deposit on the new property. Some utilities (at least, in England) want advance payments.
There's a disturbing number of people who would not be able to pay all that. Including people with full time reasonably (for the not IT sector) paying jobs.
Most landlords have a loan and haven't fully paid for their property. If the property goes into foreclosure, do you want to owner to go to debtors prison until they pay off their debt because obviously is the banks/investors money? Fact is as a property owner you have gotten certain concessions from society and similar ones are given to renters.
>It would be interesting to see how quickly your attitude would change if you weren't wealthy and were living under a landlord such as yourself.
It's funny because I do live under a landlord such as myself, in a different city. I'm both a landlord and a tenant.
>Any day, for any reason or no reason, your entire life can be turned upside down. You can be effectively made homeless and given a very limited amount of time to find a similar alternative place to live that may or may not exist and may or may no be close to your work (which matters when you're poor and cannot afford public transport).
Sure, that would be inconvenient, but I'd get a reasonable amount of notice (60 days in any case where I haven't done anything wrong) which would be sufficient for me to line something else up.
>I'm not referring to rent control: I am talking about privacy of the tenant (inspection notification periods, etc), notice for evictions (e.g. 30 days)
Oh, so we're actually in agreement. I agree, there certainly needs to be notice if you feel like kicking your tenant out. That's just a matter of practicality.
"but I'd get a reasonable amount of notice (60 days in any case where I haven't done anything wrong)"
Tangential trivia: in some states, even "progressive" states like Washington, this number can be as low as 20 days.
That can be a burden: "Quick, find a new house, move, come up with at least first month's rent and a security deposit that is usually equal to a month's rent, in less than three weeks".
You can't "evict my tenant any time I darn well like because it's my fricking property)", as you have to give "a reasonable amount of notice (60 days in any case where I haven't done anything wrong)".
Rent control was an attempt to correct for an even worse government policy. If we repeal both CA prop 13, which freezes property taxes at a certain value when the property is sold, we can repeal rent control as well. But both need to happen. And both are excellent examples of the "I've got mine, f#@K everyone who doesn't have theirs" thinking that's so pervasive in California.
If California were serious about fixing it's housing problems, it would:
1) Repeal prop 13. Yes, some grannies would be forced to sell their homes because their property taxes would go up beyond their ability to pay from their fixed income, but the overall effect would be positive. A side benefit of this would be that we could fund our schools again.
2) Cities could repeal rent control laws. If owners are forced to pay property taxes that reflect the true value, there's less likely to be an imbalance between the value they get from renting and from selling the property.
3) Cities should allow the building of more housing regardless of complaints of existing residents. Repealing prop 13 will also help with this, since there will no longer be a direct financial benefit to existing homeowners to block new construction at all costs. But the underlying problem that's evicting poor people from ares like San Francisco is that there's a severe imbalance between housing supply and demand. No amount of government meddling will fix that problem...the only thing that will is correcting that imbalance by increasing the supply of housing.
> If we repeal both CA prop 13, which freezes property taxes at a certain value when the property is sold, we can repeal rent control as well.
As a non-American I think that property taxes are an abomination anyway.
Tax people on their income if you must, but not on their wealth, especially not on non-liquid wealth. Otherwise you have retired people being forced out of homes they've owned for decades just because prices in the area have gone up.
Oddly enough, I think in the US you would get more support for increasing taxes on wealth and decreasing taxes on income, at least at the lower ends of income.
That's essentially the idea behind Georgism, which has slightly influenced more mainstream political economic thought. In Georgism, natural resources (namely, land) are the only thing that is taxed, because natural resources are not created by human effort or ingenuity and thus should be taxed to avoid the land holders earning economic rent. Proponents argue that it is the only tax that is economically efficient.
That's because wealth, particularly land and other limited resources that provide a benefit to the owner without any effort on their part, should be taxed. If you don't tax it, that's what leads to monied elites that sit on their asses without providing any benefit to society. Untaxed property leads to property owners that mooch their existence off the rest of society.
I've seen excellent arguments for taxing only those specific types of wealth because it maximizes the amount of productivity that each member of society is contributing to the group whereas taxing income has the effect of deterring productivity...granted, at the levels that we currently tax income, the deterrence factor is very small, but it's still there.
It sounds like the problem with Prop 13 was that it applied to all property owners. Florida has a very aggressive value increase cap, but it is tied to homestead. If the property is not your primary residence, no cap for you. As soon as you move and rent the place, your value jumps up to market. Commercial property of all stripes is completely uncapped. This protects grandma who has been living in her house for 30 years while not allowing the apartment building owner who has owned a building for 30 years to rake in the dough because the taxes are absurdly low.
My tenants benefit from a well maintained home, which I pay professional property managers to do, and I make every effort to insure their rent is near the low end of market rates. I do this because I was a renter once, a very poor/low income one, and I know what it's like to be in their shoes. Unfortunately the overwhelming majority of landlords are from privileged backgrounds and have little or no idea what it's like to live a life that isn't filled with privileged middle-class or better conditions.
Regulations exist because of attitudes like yours, and frankly they ought to be stronger everywhere. Eviction ought to be difficult, and not merely based on the owners' whims.
I would love to see decent research about the benefits to the landlord of a well maintained property.
Because my landlord does (polite!) extra inspections on top of the legal minimum I feel fine telling them when water's coming in or plaster is falling off.
(It's an old building. And the derelict building next door causes some problems. And the demolition of an old cinema is a bit disruptive too.)
I think the problem with this analysis is the assumption that rental units and owner occupied units are identical to one another.
In most places, rental units have more basic fixtures an amenities and tend not to be upgraded. It can easily cost of $100K to upgrade a kitchen or bathroom with high quality cabinetry and appliances. And this happens all the time with $1M+ units.
I have a house for sale in Mexico and I'm intentionally not renting it out. Why? Because renter occupied units are perceived by buyers as having more wear and tear and low-end than a place that's owner occupied.
I am totally fascinated by the concept of a $100k kitchen renovation. What does that even look like? Where I live you can build a small house for $100k.
Depends heavily on materials (also on size). Granite countertops are in a totally different price range from Corian or laminate, for example (in both cost of materials & cost of installation). Tile floors are also expensive-ish compared to lineoleum, though not as expensive as stone.
It's basically a $100k diamond ring, except with more granite countertops.
The stock kitchen for a middle-class house in suburban USA and a kitchen with $100k of work done to it are functionally identical for 98% of people who buy them, but the one with $100k spent on it looks like $100k was spent on it (if you're in the know).
Less sardonically: "professional-grade" appliances, granite countertops, redone cabinets which were custom-built by artisans out of exotic-but-sustainable wood as opposed to something which came out of a factory in China, etc, will all let you spend arbitrary amounts of money in a kitchen.
$100k is going way overboard, but I do think a nice kitchen with nice materials makes a significant difference in usability and comfort (a nice kitchen can be had for in the $10-20k range). I've lived in all three of: 1) an all-linoleum cheap suburban house; 2) a nice apartment where the kitchen had tile/stone surfaces; and 3) a recent prefab-via-IKEA wooden-countertop kitchen ensemble. Of those, #2 really was the nicest to use, followed by #3 and #1. Lineoleum and wood are just much less practical countertop materials than any kind of stone. They're fragile and mark easily, so you have to be really careful with knives and hot items. Of the two, linoleum is worse on heat-sensitivity, while wood is worse on picking up stains. Granite has the advantage of being hard to stain or mar, so even though I don't like the look of those black-granite countertops, they are nice to use and maintain. Marble can be cheaper in many places (esp. Europe) and imo actually looks nicer, but is more porous so has to be frequently resealed to avoid stains.
If a kitchen is cheap enough, granted, it could be a reasonable strategy to just treat it as disposable and replace the surfaces every few years, if you don't mind it always looking beat-up. I grew up in a home with all linoleum and we did exactly that right before we sold it: put in all-new countertop and floor when we were about to sell and then avoided using it to avoid marring it, so it'd look quite misleadingly nice for the realtor showings. But it wouldn't be my first choice in surface, if I had any spare cash.
... to explain, kinda painfully, that you can't use a sharp knife on a stone counter or you'll dull the knife. You need a cutting board. Or a wood countertop.
I understand the concern about heat but I've cooked with linoleum counters for my entire life, mostly as a baker, and I don't remember damaging one. It's just a question of not getting into the habit of setting hot objects on arbitrary surfaces. I and every cook in my family has a nice little collection of trivets, which cost a few dollars each and often come with college logos or bad jokes on them. Of course, this probably makes us look lower-class. See above under "status symbol".
We also have the confidence that, should we make a mistake, we can always buy a second or even a third linoleum countertop and still be saving money over granite or engineered stone.
That said, there's a good chance I'll end up owning a stone counter someday anyway just because, in the Massachusetts market, status symbols matter, and signals of recent renovations matter even more. We have a lot of lead paint, buried asbestos, hidden knob-and-tube wiring, and sixty-year-old hack-job plumbing around here, and anything you can do to suggest that your kitchen's walls have recently been opened and pronounced up-to-code is worth doing.
Sure you can get by with many things, and I mostly have. But if I had some money, I'd buy something more durable. Admittedly, I might not actually buy granite: tile countertops are cheaper, and have many of the advantages I'm looking for.
I don't cut on countertops, and agree that's bad for knives (I use cutting boards, as is traditional even in countries like Italy and Greece where stone countertops are the norm). But I do often have sharp things in the kitchen. The last time I dinged a counter it wasn't even due to a knife, but because I accidentally dropped a corkscrew. Would've been no problem with stone or tile, but since I don't have those, it caused a permanent mark where the tip hit! With wood countertops I've found myself paranoid about even setting a coffee cup or wine glass down without a coaster, lest it leave stains that are hard to remove. And with linoleum I'm always paranoid that even a bowl taken from reheating in the microwave will leave a ring-shaped heat-mark.
In addition to tile as a stone alternative, I am somewhat curious about the newer generation of synthetic countertops. I have heard that modern Corian countertops (or generic brands making Corian®-style countertops) are quite durable, and somewhere in price between linoleum and stone.
For what it's worth: we just renovated, and we have linoleum floors now. They're great; grippy, still pleasant to walk on, and, most importantly, easy to clean.
You'd need to be way, way overpaying to end up spending mid-5-figures on countertops.
Forget "exotic but sustainable wood" and "artisans". Just put the word "custom" next to "cabinet". Five figures. That is what custom cabinets cost.
We were back-and-forth on custom cabinets versus IKEA cabinets. We weren't looking to make a vanity cabinet purchase. We just couldn't get the storage --- particularly the pullouts --- that we wanted from IKEA.
Well lets start with the appliances, Miele double oven $6,000, sub-zero refrigerator and freezer, $8,000. Wolf range $4,000. Kohler faucets, $400, dual in-sink-erator disposals $500, dual dish drawer dish washing machines $5,000, granite counter tops $8,000, red oak cabinets, $8,000. Tile floor and back splashes, $5,000, microwave $1,500. Note I've not added any installation costs or contracting costs or demolition costs.
If you want a kitchen that looks like it would be at home in Sunset Magazine its going to cost you quite a bit of money. That said, Sear's appliances, linoleum floor and countertops and Home Depot cabinets? You can do the whole thing for probably $20K tops :-).
You are correct, I blew it on that one. My memory of the bid we got way back when they were the new hotness was $2,500 but presumably that was both drawers not each drawer of a two drawer unit. Looking at the Fisher Paykel site they seem to have come down a bit in price too, which is nice.
How do you like your Bosch dishwasher? I was pretty disappointed using some of their laundry products I didn't even seriously consider their dishwasher when we remodeled.
I absolutely love it. It really is quiet - to the extent that you can be standing in the kitchen and not know it's on (other than the under door light).
To me, the sole downside (and it's subjective, because I actually like it) is that the design of the the cutlery try is not particularly flexible - it has an opinion on how it should be loaded.
But everything is great. Low water consumption. Excellent cleaning. Good looks.
There's a lot of silly stuff in this list. A separate Miele oven? An $8k in-the-wall fridge? A dual dish drawer washing machine? A FIFTEEN HUNDRED DOLLAR MICROWAVE?
You don't have to do any of this silly stuff to rack up huge bills for a kitchen. Like I said: just gut it, and get custom cabinets. Or buy a Lexus. Similar price.
Labor costs in CA are also very high. In the area I live, the general price for a new build custom home starts at $300/sqft. Obviously professional builders building a tract pay less than that due to economies of scale, but not dramatically less.
Get unfascinated, because it's easy to spend $100k on a kitchen. I don't know how close we just came to that, but it probably isn't far. I would be embarrassed by the cost, but the stuff that dominates that cost is so basic that none of it seems extravagant. Kitchens are just expensive. In order of cost significance:
1. We demolished the entire HVAC stack, including knocking out an old chimney, and replaced a furnace and hot water heater. The new appliances were nice bonuses, but were a rounding error compared to the labor. That work got us a range hood sufficient for our new stove.
2. We tore the kitchen down to the studs and replaced the windows and backdoor, and created a pass to our dining room.
3. Cabinets. Holy fuck are cabinets expensive.
[ huge dropoff in expense happens right about here ]
4. We had an architect plan all the details of the renovation, which sounds silly except (a) the kitchen is better as a result, (b) it prevented us from fighting over feasibility of things we wanted in the kitchen, and (c) it made it easy to get permits.
5. New appliances. For normal people, you'd have to work pretty hard to find reasonable appliances that would significantly impact the cost of a new kitchen. It's not the "professional" appliances that make kitchens cost $100k.
6. Countertops (we wanted something cheap that ended up not working out, so this turned out more expensive than we planned).
7. Tile.
We live in a not-particularly-expensive part of town (there's a significant amount of section 8 on our block, which is directly adjacent to the West Side of Chicago). Our house isn't expensive relative to houses in Chicago. But renovation --- real renovation, not just replacing a fixture and putting in new backsplashes --- gets nosebleed expensive fast.
My impression is that people used to be able to do stuff like this regularly by taking out home equity loans, on the premise that improving the house increased its value and so was a little like investing on margin.
Incidentally: to anyone considering improving a kitchen: get a foot pedal sink. The plumbing for them is cheap (like, a couple hundred bucks installed). It makes a huge difference.
The rent control laws were known to the landlord at the time the lease was signed in most cases; the rent control laws in San Francisco haven't changed materially since 1994.
Condos do not have rent control- They are treated as single family homes- The new owner can simply raise the rent to market pricing at the end of the lease cycle. There are some rare outliers that can bypass this (such as if a tenant was present in the apartment when it originally converted to be a condo) but you should find that the vast majority of condos do not have this situation.
A much better analysis would have been on the sale of 2-4 unit buildings.
Oops - taxes were forgotten! They can differ wildly due to income level and legal loopholes, but it's pretty safe to assume an additional 130k in sales doesn't all go into the seller's pocket.
It would be more accurate to say 'can add over $100k to sale price.' In the case of legitimate owner move-in evictions, for example, compensation to the tenant is capped by a statutory formula. It's been a few years since I looked at it but I think it was in the region of $15k for the most complicated situation. There are additional constraints, like if a child is in elementary school you can't move in until the end of term due to the difficulty for parents of switching schools.
The US likes to think of itself as a deregulated, capitalist country, but still has a large amount of regulation (largely state not federal it seems). In the UK rent control was abolished by Thatcher in 1980, and while there is occasional talk of reintroducing some controls the basic premise seems unlikely to change.
Not all cities are like this and a large swath of the citizens in San Francisco seem exasperated by this issues on both sides. I had a friend who lived downtown by Union Square in a rent controlled apartment. The day he moved out (across the country) he couldn't even afford his own place to re-rent it out. It was pretty crazy.
NYC has not just rent control, but rent fixed apartments. Which leads to a rentocracy where people inherit 1500/mo leases for 10000/mo apartments and all manner of tricks and lies to make it happen. And then building owners install electronic locks to record visits and prove residents are only living part time in their apartment.
> "The US likes to think of itself as a deregulated, capitalist country"
Virtually all people in the US recognize that it's not. Some people think that's a positive; others think it's a negative. Many of the most significant issues in US politics are about whether we should enact new regulations, retract old ones, or revise them in place.
This isn't exactly my wheelhouse, but doesn't that completely gloss over stuff like time-value of money, and the fact that it's converting illiquid to liquid? Not sure why a landlord would go through the aggravation and uncertainty of buying out the tenant and then selling if it was only break-even.
As noted, the correct methodology would be discounted cash flows. Instead they're assuming the market has already done that analysis and that they can measure the result indirectly through sale prices. If option A sells for X and option B sells for X + Y, you should be willing to pay up to Y to take option B.
The market may not have done the cash flow valuation correctly, but the owner is selling in that market, not the ideal market, so it doesn't matter. The market prices also account for the "hassle factor" so it may even be more accurate than a spreadsheet calculation.
The amount a landlord should be willing to pay will be higher than this amount if your rent is substantially below the market rate, and lower if it’s only a little below the market rate.
...Why? I don't see how that conclusion follows from the data. The data only compared occupied vs unoccupied rent-controlled home sale prices. Nothing took into account how under-market said rents were. Unless I missed something...
You own it, you can do whatever you want on the property (within reason..). If you want to evict a tenant, that's your right and the state/city/federal government should not have a place in intervening.
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