Re:Consultants, The real reason it costs so much to build ne...
by refurb on Monday February 27, 2023 @03:53AM
(#34954384)
It most definitely backfires in SF.
When i gave up my rent controlled apartment my landlady said she was leaving it empty.
Why?
Because she was retiring soon and in a 4-unit building the value of it goes up by $100,000 - $250,000 for each unit that is empty.
Why?
Because rent control locks in rent and this future income. Evictions can takes up to a year or more and mandatory payouts are often in the tens of thousands if you do evict without cause (say owner wants to move into a unit).
If the unit is empty someone can move in right away or rent for market rent.
The units were renting for ~$3,000 per month, so as long as she sold it within 9 years she wad ahead of renting the unit out.
I agree that landlords need to go in eyes wide open, but the challenge is rules can change after you get tenants.
And the big lesson here is landlords respond to incentives too. If regulations make it cheaper to do something negative, they’ll do it. Most people would.
When i gave up my rent controlled apartment my landlady said she was leaving it empty.
Why?
Because she was retiring soon and in a 4-unit building the value of it goes up by $100,000 - $250,000 for each unit that is empty.
Why?
Because rent control locks in rent and this future income. Evictions can takes up to a year or more and mandatory payouts are often in the tens of thousands if you do evict without cause (say owner wants to move into a unit).
If the unit is empty someone can move in right away or rent for market rent.
The units were renting for ~$3,000 per month, so as long as she sold it within 9 years she wad ahead of renting the unit out.
I agree that landlords need to go in eyes wide open, but the challenge is rules can change after you get tenants.
And the big lesson here is landlords respond to incentives too. If regulations make it cheaper to do something negative, they’ll do it. Most people would.