What if something crazy happens to the economy, say the dollar gets devalued, and all you have is rental property for income? Realistically you would raise your rental price.... But wait, there's a cap, and you can't.
2) "legalizing backyard cottages" is actually against Big Government, and I'm with you there.
You're forgetting another option: deregulate and let the market compete.
In San Francisco rent control is indexed to inflation. If the dollar is devalued, inflation increases, and you get to increase your rent more. The same is true for Oregon's new law, which permits 7% increases in addition to inflation.
> You're forgetting another option: deregulate and let the market compete.
Rent control is about providing housing security and controlling volatility. Over the long-term unfettered markets may produce optimal supply, but in the short-term people can easily be pushed onto the street. As Keynes said, "economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again". (The more famous bit is, "in the long term we're all dead.")
https://www.bls.gov/regions/west/news-release/consumerpricei...
In fact, they're not selling because of market dynamics. Their property is becoming more valuable over time because no one else is selling, which means any property that does sell does so at an extreme premium. If you were an investor: Would you sell off your stock when your stock is performing strongly and continually growing?
Make no mistake. There is no free market happening here.
Tax them. Inefficient use of land is a good sign that the property tax is too low. If the government charged a property tax rate that roughly matched the property value increase, there would be no gain just by sitting on the property. You'd have to put the land to productive use to actually make a profit.
The criticism is that big government (state level) is blocking smaller governments (cities) from making policies that fit the smaller community.
- Laws can change in this case, as they have here. laws are a dynamic system
- If you are making money from rental properties only, that means you own properties (as well as your own house in theory). Not only are you more well off than almost all the population, but you have goods that are worth a lot of money that you can sell (maybe at a loss but you still have a roof over your own head).
"deregulate and let the market compete" is the right answer. It's the owners that don't allow for it.
When a currency is devalued, the price of things denominated in that currency increases.
> Laws can change in this case, as they have here. laws are a dynamic system
If you're going to pass a law allowing a rent increase every time the market would cause there to be a rent increase, I can suggest a much simpler alternative.
> If you are making money from rental properties only, that means you own properties (as well as your own house in theory). Not only are you more well off than almost all the population, but you have goods that are worth a lot of money that you can sell (maybe at a loss but you still have a roof over your own head).
That is not a valid assumption. Many small time landlords "own" the apartment building that they live in, but really the bank owns most of it and the rent is only enough to pay the mortgage and their own salary for managing the building. Require the rent to be capped at a level that causes the building to be worth less than the amount that you owe on the mortgage and there isn't anything for you to sell while you "still having a roof over your own head" -- you're just going to file for bankruptcy and have nothing.
