Chip Ahlswede – San Bernardino Sun https://www.sbsun.com Mon, 08 Apr 2024 05:48:44 +0000 en-US hourly 30 https://wordpress.org/?v=6.5.2 https://www.sbsun.com/wp-content/uploads/2017/07/sbsun_new-510.png?w=32 Chip Ahlswede – San Bernardino Sun https://www.sbsun.com 32 32 134393472 Rent control is ‘a ludicrous idea,’ and so is blocking housing https://www.sbsun.com/2024/04/07/rent-control-is-a-ludicrous-idea-and-so-is-blocking-housing/ Mon, 08 Apr 2024 05:48:35 +0000 https://www.sbsun.com/?p=4249574&preview=true&preview_id=4249574 For the third time in four election cycles, Michael Weinstein is using the AIDS Healthcare Foundation’s (AHF) money to try and attack apartment owners.

Weinstein says he wants to do this to protect renters – despite being labeled a slumlord himself by the Los Angeles Times because of the condition of the properties AHF owns.

AHF and Weinstein’s political tactics have been so caustic that the foundation has lost millions of dollars in grants and contracts from the state and federal government.

So, the notion that Weinstein has any “strange bedfellows” as Politico reported this week is a stretch. But not as much of a stretch as their article’s title – “Republicans… for Rent Control?”

Housing is a non-partisan issue – this is not about which party supports what policy because any honest politician knows that supporting rent control is merely pandering to constituents who call for the policy. Historically, it is a disastrous approach to affordability.

It does not produce any more housing – in fact, the opposite, as Minneapolis recently found out and had to amend their laws to try and encourage housing development.

It does not curtail the demand for housing – as populations are still growing.

It does not make housing any more affordable – California rents declined everywhere last year – except in rent-controlled communities.

It does not assist those in need – the blanket approach to housing policy ends up keeping rent-controlled units in the hands of those who know how to take advantage of the laws. Ask Berkeley how many professors “live” in rent-controlled units during the week only to go back to the houses they own in exclusive communities like Marin, Tahoe, and Monterey on the weekends.

However, that is not what Politico focused on, it is not what Weinstein cares about, and it was not what council member Strickland said – which they even included in their story: “Statewide rent control is a ludicrous idea, but the measure’s language goes further. It gives local government ironclad protections from the state’s housing policy and therefore overreaching enforcement.”

Strickland goes on to explain that the city’s interpretation of components of “The Justice for Renters Act” removes the state’s ability to force the city to build housing if they impose steep affordability requirements on housing.

These requirements, presumably, would be so steep that building new housing units is not financially viable. The result being developers would look elsewhere to create new housing opportunities.

Intentionally using the state’s laws against itself in a way that prevents housing from being built just to prove a point may score points for partisanship, but it will hurt Californians.

The housing crisis in California will not be resolved with sound bites. Housing affordability can’t be achieved with regulatory burdens that make it harder to build more housing.

California’s ability to solve these issues will only come when our elected representatives are pressured to address the problems that exist first.

Admittedly the back-and-forth gotcha approach to housing policy can be entertaining to watch.

However, Californians need to prioritize long-term vision over short-term gains and value real-world growth over theoretical power struggles to create viable and sustainable housing policies.

Chip Ahlswede is vice president of external affairs at the Apartment Association of Orange County.

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Rent control is the wrong solution to the problem of high housing costs https://www.sbsun.com/2023/05/30/rent-control-is-the-wrong-solution-to-the-problem-of-high-housing-costs/ Tue, 30 May 2023 17:21:33 +0000 https://www.sbsun.com/?p=3775691&preview=true&preview_id=3775691 Helping our neighbors is one of the core foundations of American life. Whenever possible we want to find ways to ease the burden of those around us. Which is why so many people feel inclined to support policies such as “rent control.” Stability in housing pricing sounds like a positive solution.

The problem is — sustainable legislative solutions are never that simple.

Renters and homeowners alike can look at that stable housing cost concept and find sympathy for those who are rent burdened and do not see the downside to rent control policies. Taking an optimistic view of people trying to solve a problem is laudable but often noticeably short sighted.

Unanswered questions

One of the key reasons given for pursuing rent control as a policy is that it benefits those in most need. However, these policies never include methods to identify needs, qualify beneficiaries, or ensure future protections.

Who receives the benefits of rent control?  What standards exist in order to qualify for rent control? What reviews exist to ensure beneficiaries remain in need? The policies fail to address the needs of the beneficiaries. The result of which is a problematic policy in many ways.

First, housing is not a one size fits all product, regulations should not be either. Second, examining West Hollywood, Santa Monica, and Berkeley show many rent controlled units are not primary residences. Third, housing policies such as section 8 require beneficiaries to qualify and requalify to continue receiving benefits — rent control policies have no similar metric to ensure the benefit matches the beneficiary’s need.

The result is residents lease rent controlled units longer than they need – forcing those in need into more expensive or over-crowded units. If rent control seeks to assist those in the most need, the policies implemented should address these failures seen elsewhere.

Unintended consequences

Everyone’s neighborhood has houses in need of some work, but in general things seem fine. Our individual experiences often shape what we see as normal.

Well, what happens when your neighbor can no longer afford to maintain their property? What happens when the people across the street need to care for a sick family member? What happens when the neighbors’ kid that has been away at college moves back home and needs more space?

The lack of mobility created by rent control forces people into living conditions that do not meet needs. Rent control’s outcome leaves people stuck and unable to address the changes they face in life — lessening their quality of life, and the neighborhood’s overall stability.

Losing affordability

Affordability is a primary reason given for rent control. The factor most cited by proponents is that the costs are predictable. They’re right, but not in the way they think.

Capping rents provides predictability for the residents but does nothing to cap the costs to maintain the property. Caps also fail to predict how future inflation, salaries, or maintenance will be impacted. Last, property valuation is based on the income to debt ratio. This leaves the only option of increasing rents every year as much as possible to ensure the property can be maintained to the resident’s standards.

In the instances where the owner doesn’t take that tact, the result eventually is that the property is too costly to maintain, upgrade, and provide quality housing. Forcing the owner to sell an undervalued property with little to no chance of becoming an attractive property to most investors. That is except for large corporations that can either afford to bring the units up to market, or sustain the losses until they outlast the residents paying low rent rates.

The last option is to build new housing. Rarely are new products of any kind the most affordable option, but more so with the inability of cities to process housing starts in a timely manner — this isn’t a real option until there are significant changes in local planning… everywhere. But that said, who wants to build housing when they know they can not get a reasonable rate of return on their efforts?

In other words rent control guarantees maximum rent hikes, consolidation of the market to corporate investors, and a lack of opportunity.

Rent reality

Montana became the 33rd state in the country to ban rent control this week.

Two-thirds of the states in our country have seen the negative consequences that rent control brings and acted to protect their communities. Orange County needs to do the same.

The truth is addressing the cost of housing is multi-faceted and requires a great deal of cooperation and coordination between government, business, non-profit housing, and steadfast community leadership to overcome.

There is no “one size fits all” approach, and there is no “singular magic bullet” solution. And lazy approaches that seem good but create more problems than they solve… is not going to help.

Chip Ahlswede is vice president of external affairs at the Apartment Association of Orange County.

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