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Rent control has never worked, NY and San Francisco and other cities are prime examples, where rent control is the cause for housing shortage & high rents, as it discourages developers from building when there is little or no incentive. More diliapitated & run down properties as Landlords have no way to recoup their operating expense. Instead the govt could offer a tax credit for low income families. Let the free market dictate the price with supply and demand.
This proposal is not traditional rent control, large apartment owners could still set rent at whatever rate they wanted (and their local law permits), and they would simply lose the benefit of certain tax breaks should they exceed the 5% threshold rate increase. In some very hot rental markets, it could make sense to set higher rents and forgo the tax breaks, but the loss of the tax breaks would still factor in to the decision of how high to raise rents.
A tax break is a public subsidy, and if a business is receiving a public subsidy, then it is reasonable to expect they provide a public benefit. If they do not want to have certain expectations placed on them, then they can give up their tax break and be subject to *the same* tax rules as everyone else.
Also, the cause of housing shortages in New York and San Francisco, even according to developers is primarily due to (1) the very high cost of labor and construction materials, (2) very *high interest rates* that make financing new construction difficult, (3) zoning restrictions that sharply limit where new housing can be built and how dense or large projects can be, and (4) very complex and lengthy permitting processes for even zoning-compliant projects that can add years to the development timeline.
And yet, even with all that, new housing can and does get built in both cities, though it tends to be either at the luxury end or publicly subsidized affordable housing not targeted to the middle-class.
Maybe he can just put a cap on building costs.
Another last minute gimmick!
I’m not sure who is running our country but I’m sure fixing rents will eventually lead to more urban blight, shuttered apartments, less new apartments. It’s more Democrat failed policies but as always it sounds good.
Price controls have worked – never.
Lots of people like to complain about rising costs but offer no remedies or actions of their own and only criticize those proposed by others.