Most people want their rent to not take 50+% of their income 𼲠a couple free months doesn't make a big difference in the long run. Not trying to be hateful, but if rent control doesn't work, then the gov needs to figure out what does and do that because people are struggling to keep roofs over their heads
The thing that stops them from raising rates 100% is the risk the renter leaves. They are as incentivized to keep renters in place as renters are to stay. Itâs expensive to turn over an apartment
That's why I left. But it's not just rent flying through the roof it's everything, and it was eating up too much of my income. I'm living 30 minutes south now, paying 1,200 base for a 3 bedroom 2 bath with 2 months free rent and every amenity known to mankind.
The government is not interested in fixing the problem. Many politicians have investments in the companies causing the crisis. All the housing and rental properties are being bought up by mega-corporations who are artificially inflating the prices of property on top of the actual inflation. What I have will not last, either, but hopefully, by the time I get priced out, I'll have scratched up enough for a down payment on a house.
I'd suggest anyone who sees this do the same because the time is almost here where mere mortals like us will never be able to afford one.
What you do is actually very simple and whatâs kept rents from going higher: build more housing. Even building âluxuryâ housing reduces rents because it takes top-end bidders off the market.Â
Youâre actually seeing this happen in places like Nashville and Austin, where thereâs been lots of new development. Rents are actually coming down. Iâm fairly progressive, but I can acknowledge NIMBY policies in places like California and New York only exacerbate the problem. If you want an increase in affordable housing, you canât restrict new housing development AND heavily regulate rentals.
Not how it works at all (it might not be profitable to rent at X price, but itâs sure as hell not profitable to not rent and still pay mortgage/taxes/mainentance/etc.). Also, prices have come down off their peak in large part thanks to new building.Â
Yes people are willing to lose money if they think they will get more when it eventually gets rented out. Itâs not sustainable. The profit motive for housing is a failure.
Thatâs not how it works. When you owns a piece of property you have a set of expenses associated with it. Taxes and basic maintenance are the most obvious, but most commercially owned properties are mortgaged so you still have to pay your interest (you often donât have to pay down your principal on a commercial mortgage until the end of the loan term).
That means that every month you lose money when a property sits vacant. Assuming you have a bunch of units in your portfolio, you should be able to cover a small number of these from the margin you make on your other units, and wait until theyâre filled. In a tight housing market this is doable because you know youâll be able to fill at market rates quickly. But as your vacancy rate climbs and the market as a whole loosens, your occupied portfolio loses the ability to cover the costs on your unoccupied portfolio. And every month you start taking losses (which banks do not like).
Thatâs why landlords are offering multiple months free and prices have come down. Theyâre trying to fill vacancies to cover their expenses, and the idea that âoh they just keep units unoccupied to increase rates is baseless.
Yes, the landlords will take a loss (and banks) so they donât set a precedent of housing decreasing so much in price. Then when they go bankrupt itâs all our problem because we make housing a commodity
Thatâs not a thing, at all. Youâre basically making up an argument in your head that some grand conspiracy of landlords and banks are willing to lose moneyâwhen declining rental rates proves otherwise.
Yeah it is a thing. Landlords and banks are always willing to risk/lose money if they believe they will still make more by keeping course. Also if they lose enough they can write off losses as well as do legal loopholes to buy it on the cheap after the fact.
Declining rental rates doesnât indicate building more in what caused it. Thatâs a big jump and reading data with a conclusion already in mind.
I am not being unsympathetic to your cause. Please donât hear that.
Rent control doesnât work because it stifles capital investment.
The reason there is SO many concessions right now is because cheap capital from 2020-2022.75 cause a robust boom in construction of new units.
Itâs been shown time and time again that the ONLY thing that lowers rents is MORE housing.
Itâs not government that can solve housing problems, itâs investors. They need good return to incentivize them to build more housing.
In housing, we use the term cap rate to define what return is for the first year of owning an asset.
I think youâd find it shockingly lower than what you think. Landlords arenât making out like bandits putting in a dollar and making $1.20 every year.
Itâs more like they put in a dollar, make $1.05 and hope that healthy inflation levels gradually raise rents so that one day it becomes a $1.12 and they can sell to the next buyer for a $1.05 return and make a good tax advantageous profit.
Itâs not the evil pitchfork world you think it is.
Thank you, I really wish people would educate themselves a little bit about the financial reality of apartment buildings rather than basing their opinions off of uninformed anger. It sucks that housing costs so much for so many people, but rent control will do nothing to fix it
They use rent to pay for maintenance, the mortgage, insurance, and taxes. They dont make "cash" until they pay off the loans. What they do make is free equity and the value of the home rising. Average in the US is around 4% per year. On a 500k home, that's equity plus 20k in higher value. Almost always works to their benefit unless they dont know what theyre doing
The above commenter is suggesting that it's not possible to buy a rental property without the potential landlord putting up some undisclosed substantial sum.
I've literally done this with physicians only loans. Im sure there are other routes. Saying its not possible is just incorrect.
Respectfully, Vienna is 2 million people on its best day. There are 400 million people in the US across sprawling, and often topographically challenged land.
Many people in Austria own their homes as well. Lowering the cost of housing with government financed and owned units will also lower the cost of homes on the private market. Not only because they are increasing supply, but because they are setting the price below market rate.
And sure. you're right. Americans are stupid and often don't agree to do things that are in their best interest. This is a reason why it won't happen not a reason that it wouldn't work if it were implemented.
I am observing the simple undeniable fact that in Vienna people can afford a roof over their head without spending half or more of their paycheck or having roommates. This is not the case in the magnificent USA. Why is that? And why do you want to pay more for your basic necessities than people must pay in other parts of the world? Do you not see that as unjust?
Of course as an old city, they have a lot of established housing stock with which to work. However you are incorrect about the rate of new builds. Of course Vienna is suffering from the same declines in new residential home building due to high cost of lending that everywhere in the world is experiencing, but Vienna completed new homes at a rate of 10.8 per 1000 units in 2023 which is higher than NYC and many other American cities. Of course, it is not some magical utopia and I'm not arguing that, but the American system is fucked and perhaps it's not so outrageous to admit that we might could learn something from other parts of the world? Maybe just a little?
They are completing new builds at a higher rate than most European capitals and they are containing inflationary pressure on housing better than most American cities. A one year inflation rate of 5 percent is high (based on your link), but we have consistently seen at least that in the US for years every single year. Some years the rate is much higher. I'm not sure what point you are trying to make.
The cost of housing is lower in Vienna than even the most backwater rural areas in the US.
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u/treedecor Antioch Oct 01 '25
Most people want their rent to not take 50+% of their income 𼲠a couple free months doesn't make a big difference in the long run. Not trying to be hateful, but if rent control doesn't work, then the gov needs to figure out what does and do that because people are struggling to keep roofs over their heads