Message from the Executive Director October 2024

Absolutely! Rent Control is Stealing

Rent Control: A Personal Struggle for Property Owners

It is the same scenario for most of us “don’t call me landlord anymore – call me a rental housing provider” folks. For years, we work at our careers and sacrifice and save, and then save and sacrifice. Along the way, we skip probably way too many vacations throughout various stressful careers and teach ourselves not to spend extravagantly and only buy the necessary “things.” For years, we work hard to provide support for our family’s needs and care, and we provide our children with often costly educations. Also, somewhere along the way, we had made the choice to take some of our hard-earned savings and invest in income properties – we made the choice not to invest in stocks and bonds on Wall Street but purchased rental housing.

The Investment in Income Property Over Wall Street

This investment decision that so many of us have chosen, income property over Wall Street, was made to provide us with what we had hoped would be low risk, somewhat stable income in our retirement years. Investment in income property was also supposed to provide the added benefit of giving ourselves the satisfaction of providing the badly needed “roofs over the heads” of other members within the communities in which we live. There was always meant to be a certain satisfaction out of handing over keys to individuals and families in need of a place to live, and we took such great pride in doing so.

Government Support for Property Owners Has Disappeared

However, in today’s environment, whatever appreciation and support that had existed in the minds of government officials years ago, is today completely gone. So seemingly upside down has our situation become, no matter the level of government we are dealing with (e.g., state, county, or city), it seems we are treated like caged animals with the walls slowly collapsing in on us.

Stricter Regulations and Increased Risk

So tough has our situation seemingly become and our management of our properties made so difficult, there continues to be an ongoing ratcheting-down of regulations so that the rule book is stricter and stricter to the point of being inoperable and more and more difficult to comply with. Our risk profile for remaining in this business has massively increased as we face ongoing habitability and discrimination lawsuits, overzealous city inspectors, the insurance crisis, and higher and higher costs and government-imposed regulatory fees and taxes. It is nearly impossible to breathe with the constant pressure of the government’s knee pressing down on the necks of landlords.

The Unfair Burden of Rent Control

It should come as a complete embarrassment to all our renters that elected officials feel a need to “babysit” so many adults who choose to be renters. Why should “we” have an obligation to provide rent control subsidies taken from our own pockets to these perfect strangers when we ourselves have mouths to feed, children to educate, retirements to sustain, and future generations of our families to consider?

Why should renters, those adults who may be needy or not, be allowed to thrust their hands in our pockets and take what rightly belongs to us and our families, and those others who we choose to share with? There’s no such thing in these United States of America as a private welfare system, yet somehow rent control subsidies for all, need it or not, has become a private welfare system. Housing affordability can and should be through government-provided rent subsidies targeted at those who are in need and qualify for assistance, and not a burden imposed on private citizens by virtue of private property ownership. Rent control is stealing.

Rent Control and Its Many Consequences

Unfortunately, it does not stop with rent control and suppressing our pricing, making it difficult for us to keep up with rapidly rising supply and maintenance costs, newly imposed and ongoing taxes and government fees, an insurance crisis, and so much more. Today, we have fewer and fewer rights to choose who we can rent our units to, and even far fewer rights to exclude those who fail in their legal promise to abide by lease agreements for a variety of infractions such as not paying rent, damaging property, and carrying out criminal activity at our properties, among others.

The Challenges of the Eviction Process

And what little recourse do we have going on here? We have a constitutional right to “exclude,” but that route, the eviction route, is purely a worse-case scenario and absolute last resort. So much has the road to eviction become a minefield, so few of us dare venture down that path. Doing so could remove tens of thousands of dollars out of your wallet or retirement account, may take up to six months of court battles plus up to two months before the sheriff does the lockout, and literally tear one apart at the seams with uncertainty, frustration, and anger.

Hope for the Future: Ending Rent Control

Nevertheless, I still hold out hope. Some of us continue to enjoy a reasonable return on the investments we have made, particularly those who have been long-term players. There are attempts being made today and many that are planned to challenge the many rent control regimes at both state and federal levels, and I believe that someday one case with one cause of action and the right plaintiffs will begin to chip away and then eventually snowball into the destruction of rent control and all of its related restrictions and regulations. That day will eventually come, I am sure of it. I can only “hope” that the day comes very soon.

Rent Control as a Destructive Entitlement Program

Rent control is stealing. It is robbing “Peter to pay Paul,” and “stealing from the [perceived] rich to give to the [perceived] poor.” It has become like any other entitlement along with food stamps, free healthcare, and other government programs. However, what makes rent control different from other government programs is that “we,” the private property owners, take on the sole burden as if to say there’s a “private welfare system” here in this country.

The Negative Impact of Rent Control on Cities

For over 40 years since the inception of rent regulations in our once-great cities like Los Angeles, Santa Monica, San Francisco, and others, we have seen the adverse effects of strict and long-lasting rent control regimes, like declining housing supply, increased (and some of the highest in the U.S.) populations of homelessness, gentrification, and rapidly rising rents due to lagging housing supply. As Socialist, Swedish economist Assar Lindbeck asserted, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”

Advocacy and Legal Efforts Will Turn the Tide

Don’t give up the ship just yet. I’m telling you, things will eventually turn around, but it takes effort and advocacy from all of us, and of course, a lot of money and maybe some guns, but most certainly, superior legal firepower.