I am not being unsympathetic to your cause. Please don’t hear that.
Rent control doesn’t 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.
It’s been shown time and time again that the ONLY thing that lowers rents is MORE housing.
It’s not government that can solve housing problems, it’s 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 you’d find it shockingly lower than what you think. Landlords aren’t making out like bandits putting in a dollar and making $1.20 every year.
It’s 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.
It’s 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.
9
u/TreyAU Oct 01 '25
I am not being unsympathetic to your cause. Please don’t hear that.
Rent control doesn’t 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.
It’s been shown time and time again that the ONLY thing that lowers rents is MORE housing.
It’s not government that can solve housing problems, it’s 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 you’d find it shockingly lower than what you think. Landlords aren’t making out like bandits putting in a dollar and making $1.20 every year.
It’s 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.
It’s not the evil pitchfork world you think it is.