Rent Control/Prices

[phkrause]

New Report Claims Blackstone Group is Buying San Diego's Affordable Housing, Hiking Up Rent Prices

Blackstone purchased thousands of San Diego's affordable housing units in 2021, then raised rent for some units between 43-64% in just two years, the report says

https://www.nbcsandiego.com/news/local/new-report-claims-blackstone-group-is-buying-san-diegos-affordable-housing-hiking-up-rent-prices/3195265/?

[phkrause]

YOU LOVE TO SEE IT: Rent Control Lives (For Now)

Good things are happening! The Supreme Court won’t listen to landlords, California incorporates labor rights into their curriculum, touring musicians get a big break, and consumer protection regulators get some much-needed help.

https://www.levernews.com/you-love-to-see-it-rent-control-lives-for-now/

[phkrause]

A record number of Americans can’t afford their rent. Lawmakers are scrambling to help

DENVER (AP) — Single mom Caitlyn Colbert watched as rent for her two-bedroom apartment doubled, then tripled and then quadrupled over a decade in Denver — from $750 to $3,374 last year.

https://apnews.com/article/affordable-housing-rent-eviction-price-harvard-congress-f5411012e10fa78d0257c137e60c1be3?

[phkrause]

A loophole got him a free New York hotel stay for five years. Then he claimed to own the building

NEW YORK (AP) — For five years, a New York City man managed to live rent-free in a landmark Manhattan hotel by exploiting an obscure local housing law.

https://apnews.com/article/new-yorker-hotel-fraud-free-room-loophole-6505cb6df084002401aab9f6eaecf452?

[phkrause]

Softer rents for the rich

Data: CoStar; Note: CoStar rates multi-family buildings on architectural design, structure, amenities, site and certifications; Chart: Alice Feng/Axios Texas renters with the deepest pockets are more likely than others to score a deal. Why it matters: A flood of new construction is pushing down U.S. rents at the high end, where there are often more apartments than renters who want them. Demand for more affordable apartments is helping to keep middle-of-the-road rent prices from slipping as far. Zoom in: That's the case in Dallas, Austin and San Antonio, according to real estate firm CoStar Group, which rates buildings based on design, amenities, location and certifications. Rent for middle-tier apartments in Houston and nationally was ticking up at the end of 2023. State of play: While the country needs more housing, most new apartments are loaded with amenities in prime locations. The high-rises that Texas' biggest metros built in recent years include perks like electric vehicle chargers, rooftop bars and towel service. Be smart: U.S. rents generally are still above pre-pandemic levels, analysts say. Prices you see in the headlines are asking rents, meaning new leases only. What's next: It could be a few years before there's enough demand to soak up the excess supply that's overwhelming some metros such as Austin, says Jay Lybik, CoStar's national director of multifamily analytics. What they're saying: "We've got to get these buildings finished, and start filling them, without having more come online," Lybik tells Axios. The pipeline for new projects is already slowing as developers find it harder to get financing, he says. The intrigue: It's not just rent deals. Another way to help fill fresh apartments is to hire an influencer. Dallas-based content creator Kenzie Elizabeth recently promoted a local high-rise, and some off-campus apartments near UT-Austin use student ambassadors.

[phkrause]

?️ Postcard from Austin

The Waterloo (right), a highrise apartment complex across from the Sheraton on 11th Street, shown in this photo from 2022. Photo by George Rose/Getty Images

Those Austin rent cuts are no joke. Here's how the metro's major surplus of apartments helped me lock down a lower monthly rate. Why it matters: Rents usually don't come down for those who aren't moving, Axios' Emily Peck reports. The big picture: When my agreement came up for renewal last month, I was thrilled to see my rent didn't increase a dime. Context: I live in a studio in Central East Austin near several new, amenity-packed buildings. (Mine was built in 2013.) Two years ago, my rent for a different apartment in my complex went up a few hundred dollars. What I did: I checked my building's website and saw another unit with the same specs listed for nearly $60 less per month, across 15 months. The leasing office was quick to match that rate when I asked. Zoom out: It's expensive for landlords to turn over an apartment — especially now when new tenants pay less than those who just moved out, according to Lybik, with CoStar. I spotted swanky buildings in Dallas and San Antonio offering weeks of free rent. A former colleague in Houston says her apartment complex offered to extend her lease for six months at no extra cost. The bottom line: Experts tell me Austin is the poster child for over-building. While that's driving down rent for new leases, current apartment residents might gain some bargaining power. More negotiation tips

[phkrause]

Biden to call for 5% cap on annual rent increases, as he tries to show plans to tame inflation

WASHINGTON (AP) — President Joe Biden is ready to propose a 5% cap on annual rent increases for tenants of major landlords as he tries to show he’s doing something about the high cost of housing, according to a person familiar with the plan.

https://apnews.com/article/biden-housing-rent-cap-apartment-election-e60dde4e3dee48ee6790bf713466ae18?

[phkrause]

? The post-pandemic rent spike is softening

By Sami Sparber, Andrew Keatts and Jacque Schrag

Data: CoStar; Chart: Jacque Schrag/Axios The average asking rent in San Diego is slightly below where it was a year earlier, but it's still up nearly 25% from the end of 2019, according to CoStar Group data. The big picture: A surge in new apartments is helping to ease rent hikes across the country. But the national average rent remains 19% higher than pre-pandemic levels, the data shows. Zoom in: Another way to see the subtle cooling in the market is in the amount of property managers that are offering rent sweeteners such as free weeks or months of rent or free parking, per a recent Zillow report. 34.3% of San Diego listings included a concession in July. That's up 12.4 percentage points from where it was a year ago. Analysts at Moody's say concessions are at the highest level on record. Catch up quick: San Diego last year issued more permits for new homes than it had in any year in decades. The region as a whole issued 20% more permits in 2023 as it did in 2022, even as statewide permitting declined by 5%. What's next: Landlords could raise rents as construction slows and people postpone home purchases. Tell a friend

[phkrause]

? America's rent bite

Data: Census Bureau. Chart: Axios Visuals Just over a quarter (25.6%) of U.S. renters are spending more than half their income on housing, Axios' Alex Fitzpatrick and Kavya Beheraj write from Census data out this week. Why it matters: An excessive rent burden can make it harder to afford other basic needs, like groceries and transportation — or to save for a down payment. By the numbers: Florida is home to several especially rent-burdened metros. That could be due to the state's large number of retirees, who may have relatively less current income. On the other side are Ogden, Utah (17.9%), Northwest Arkansas (18%) and Wichita, Kansas (18.7%). ? Between the lines: Geography is only part of the equation here — race plays a role, too. 30.6% of Black renters are spending more than half their income on rent, compared to 23.4% of white renters. Stunning stat: The real median gross cost of renting — that's rent plus utility and energy costs — grew faster annually (+3.8%) than real median home values (+1.8%) last year for the first time in a decade, the Census Bureau points out.

[phkrause]

? Rent is eating up our paychecks

By Kate Murphy, Alex Fitzpatrick and Kavya Beheraj

Data: U.S. Census Bureau; Chart: Axios Visuals About 30% of San Diego County renters are spending more than half their income on housing, according to Census data released last week. Why it matters: An excessive rent burden can make it harder to afford other basic needs, like groceries and transportation — or to save for a down payment. Zoom in: Rent in San Diego is slightly below where it was last year, as the post-pandemic rent spike has calmed down. But prices are still up nearly 25% from the end of 2019. By the numbers: Median rent for a studio apartment in the city is about $2,000, according to Zillow. 1 bedroom: $2,400 2 bedroom: $3,200 3 bedroom: $4,200 Zoom out: Florida is home to several especially rent-burdened metros, which could be due to the state's large number of retirees, who may have relatively less current income. On the other side are Ogden, Utah (17.9%), Northwest Arkansas (18%) and Wichita, Kansas (18.7%). Nationally, 30.6% of Black renters are spending more than half their income on rent, compared to 23.4% of white renters. That's according to the 2023 1-year American Community Survey, and among metros with at least 200,000 households. Stunning stat

[phkrause]

? No-rush renters

Data: Cushman & Wakefield analysis of CoStar and Fed data. Chart: Axios Visuals The cost of homeownership isn't worth the squeeze, some renters say. Why it matters: Home shoppers' budgets don't go as far as they did a few years ago, Axios' Sami Sparber writes. Taking the plunge could mean giving up big-city living or an amenity-packed building for 30% less house, says Sam Tenenbaum of Cushman & Wakefield, a real estate services firm. ?️ Case in point: Chicago renter Casey Moore and his wife inherited money for a down payment, but they're not rushing to buy a home. Spending an extra several hundred dollars monthly on a mortgage payment and HOA fees "just to own something" nearby "seems ludicrous," Moore tells Axios. Instead, the couple redecorated their two-bedroom apartment, which boasts a shared basketball court and pool. Keep reading.

[phkrause]

The Housing Loophole That Lets Wealthy Investors Raise Rents on Poor Tenants

As the U.S. struggles with a housing shortage, investors continue to exploit a gap in an affordable housing law to raise rents on 115,000 apartments. Congress has repeatedly failed to act.

https://www.propublica.org/article/affordable-housing-investors-loophole-rent-tenants?

[bonnie1962]

We Never Learn    Milton Friedman said, "We economists don't know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can't sell tomatoes for more than two cents per pound. Instantly you'll have a tomato shortage. It's the same with oil or gas."^[31]

 

Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of goods even during shortages, and to slow inflation, or alternatively to ensure a minimum income for providers of certain goods or to try to achieve a living wage. There are two primary forms of price control: a price ceiling, the maximum price that can be charged; and a price floor, the minimum price that can be charged. A well-known example of a price ceiling is rent control, which limits the increases that a landlord is permitted by government to charge for rent. A widely used price floor is minimum wage (wages are the price of labor). Historically, price controls have often been imposed as part of a larger incomes policy package also employing wage controls and other regulatory elements.

Although price controls are routinely used by governments, Western economists generally agree that consumer price controls do not accomplish what they intend to in market economies, and many economists instead recommend such controls should be avoided;^[1] however, since the credibility revolution started in the 1990s, minimum wages have found strong support among some economists.^[2][3][4][5]

History

[edit]

The maximum retail price (MRP) of this bottle of water in Sri Lanka is 90 Rupees

The Roman Emperor Diocletian tried to set maximum prices for all commodities in the late 3rd century AD but with little success. In the early 14th century, the Delhi Sultanate ruler Alauddin Khalji instituted several market reforms, which included price-fixing for a wide range of goods, including grains, cloth, slaves and animals. However, a few months after his death, these measures were revoked by his son Qutbuddin Mubarak Shah.^[6] During the French Revolution, the Law of the Maximum set price limits on the sale of food and other staples. Within Spain in the 16th and 17th centuries, after the price revolution, a permanent regulation on the price of wheat (called tasa del trigo) was established. This intervention was discussed by theologians and jurists of this time.^[7]

Governments in planned economies typically control prices on most or all goods but have not sustained high economic performance and have been almost entirely replaced by mixed economies. Price controls have also been used in modern times in less-planned economies, such as rent control.^[1] During World War I, the United States Food Administration enforced price controls on food.^{[8][9][10][11][12][13][14]} Price controls were also imposed in the US and Nazi Germany during World War II.^[15][16]

Postwar

[edit]

Wage controls have been tried in many countries to reduce inflation, seldom with success. Since inflation can be caused by both aggregate supply or demand, wage controls can fail as a result of supply shocks or excessive stimulus during times of high sovereign debt (increases to the Monetary Aggregate System M2).

ing wage levels and price policies. It allowed the government to begin a process to scrutinise rising levels of wages (then around 8% per year) by initiating reports and inquiries and ultimately giving orders for a standstill. The objective was to control inflation. It proved unpopular after the 1960s.

United States

[edit]

A World War II-era shop display promoting price controls.

In the United States, price controls have been enacted several times. The first time price controls were enacted nationally was in 1906 as a part of the Hepburn Act.^{[17][page needed]} In World War I the War Industries Board was established to set priorities, fix prices, and standardize products to support the war efforts of the United States. During the 1930s, the National Industrial Recovery Act (NIRA) created the National Recovery Administration, that set prices and created codes of "fair practices". In May 1935, the Supreme Court held that the mandatory codes section of NIRA were unconstitutional, in the court case of Schechter Poultry Corp. v. United States. In 1971, President Richard Nixon issued Executive Order 11615 (pursuant to the Economic Stabilization Act of 1970), imposing a 90-day freeze on wages and prices. The constitutionality of this action was challenged and upheld in the case of Amalgamated Meat Cutters v. Connally.^[18]

The individual states have sometimes chosen to implement their own control policies. In the 1860s, several midwestern states of the United States, namely Minnesota, Iowa, Wisconsin, and Illinois, enacted a series of laws called the Granger Laws, primarily to regulate rising fare prices of railroad and grain elevator companies. The state of Hawaii briefly introduced a cap on the wholesale price of gasoline (the Gas Cap Law) in an effort to fight "price gouging" in that state in 2005. Because it was widely seen as too soft and ineffective, it was repealed shortly thereafter.^{[citation needed]}

 

 

 

[edit]

Main article: Price ceiling

A related government intervention to price floor, which is also a price control, is the price ceiling; it sets the maximum price that can legally be charged for a good or service, with a common example being rent control. A price ceiling is a price control, or limit, on how high a price is charged for a product, commodity, or service. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive. Such conditions can occur during periods of high inflation, in the event of an investment bubble, or in the event of monopoly ownership of a product, all of which can cause problems if imposed for a long period without controlled rationing, leading to shortages.^[25]

Further problems can occur if a government sets unrealistic price ceilings, causing business failures, stock crashes, or even economic crises. In fully unregulated market economies, price ceilings do not exist. While price ceilings are often imposed by governments, there are also price ceilings that are implemented by non-governmental organizations such as companies, such as the practice of resale price maintenance. With resale price maintenance, a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices (resale price maintenance), at or below a price ceiling (maximum resale price maintenance) or at or above a price floor.

Criticism

[edit]

The primary criticism leveled against the price ceiling type of price controls is that by keeping prices artificially low, demand is increased to the point where supply cannot keep up, leading to shortages in the price-controlled product.^[26] For example, Lactantius wrote that Diocletian "by various taxes, he had made all things exceedingly expensive, attempted by a law to limit their prices. Then much blood [of merchants] was shed for trifles, men were afraid to offer anything for sale, and the scarcity became more excessive and grievous than ever. Until, in the end, the [price limit] law, after having proved destructive to many people, was from mere necessity abolished."^[27]

As with Diocletian's Edict on Maximum Prices, shortages lead to black markets where prices for the same good exceed those of an uncontrolled market.^[26] Furthermore, once controls are removed, prices will immediately increase, which can temporarily shock the economic system.^[26] Black markets flourish in most countries during wartime. States that are engaged in total war or other large-scale, extended wars often impose restrictions on home use of critical resources that are needed for the war effort, such as food, gasoline, rubber, metal, etc., typically through rationing. In most cases, a black market develops to supply rationed goods at exorbitant prices. The rationing and price controls enforced in many countries during World War II encouraged widespread black market activity.^[28] One source of black-market meat under wartime rationing was by farmers declaring fewer domestic animal births to the Ministry of Food than actually happened. Another in Britain was supplies from the US, intended only for use in US army bases on British land, but leaked into the local native British black market.

A classic example of how price controls cause shortages was during the Arab oil embargo between October 19, 1973, and March 17, 1974. Long lines of cars and trucks quickly appeared at retail gas stations in the U.S. and some stations closed because of a shortage of fuel at the low price set by the U.S. Cost of Living Council. The fixed price was below what the market would otherwise bear and, as a result, the inventory disappeared. It made no difference whether prices were voluntarily or involuntarily posted below the market clearing price. Scarcity resulted in either case. Price controls fail to achieve their proximate aim, which is to reduce prices paid by retail consumers, but such controls do manage to reduce supply.^[29][30] Nobel Memorial Prize winner Milton Friedman said, "We economists don't know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can't sell tomatoes for more than two cents per pound. Instantly you'll have a tomato shortage. It's the same with oil or gas."^[31]

U.S. President Richard Nixon's Secretary of the Treasury, George Shultz, enacting Nixon's "New Economic Policy", lifted price controls that had begun in 1971 (part of the "Nixon Shock"). This lifting of price controls resulted in a rapid increase in prices. Price freezes were re-established five months later.^[32] Stagflation was eventually ended in the United States when the Federal Reserve under chairman Paul Volcker raised interest rates to unusually high levels. This successfully ended high inflation but caused a recession that ended in the early 1980s.

[phkrause]

Airbnb sues New Orleans after it adopts sweeping regulations governing short-term rentals

NEW ORLEANS (AP) — Airbnb is suing the City of New Orleans for requiring the company and short-term rental platforms ensure properties they market are in compliance with city laws.

https://apnews.com/article/airbnb-lawsuit-new-orleans-f72e801422838e5686e54c2ac72ebcf1?

[phkrause]

? Offices = apartments

Data: RentCafe analysis of Yardi Matrix data. Chart: Axios Visuals The pipeline for new apartments in old offices is growing, Axios' Sami Sparber writes. Why it matters: Converting offices takes time, money, and, often, government help. But cities and developers see it as one of the best ways to repurpose vacant buildings. Keep reading.

[phkrause]

? Corporations are guilty of housing discrimination. Major corporate landlords are racially segregating Los Angeles with a “surgical and deeply disproportionate eviction of Black tenants” from non-Black neighborhoods, according to a new study of post-pandemic eviction patterns. Their research also argues that these consolidated firms have exploited algorithmic tenant screening technology to deny Black Angelinos housing.

[phkrause]

? Airbnb's high-end expansion

Illustration: Sarah Grillo/Axios

Airbnb is expanding well beyond vacation rentals, beefing up its "experiences" offerings and adding options for users to book massages and other services. Airbnb Originals which launched this week, are a more exclusive and more expensive set of experiences. Users can pay to spend the day with Patrick Mahomes or Sabrina Carpenter, for example. "These are once-in-a-lifetime kind of experiences because of who the host is and what they're offering. It's that combination of 'I can't believe I'm doing this with this person' and the fact you can only do it on Airbnb," Jay Carney, the company's global head of policy and communications, told Axios' Maxwell Millington. ?‍? The company is also rolling out Airbnb Services, allowing users to hire a chef, masseuse, personal trainer or photographer through the Airbnb app. You don't have to stay at an Airbnb to partake.

[phkrause]

Colorado’s governor vetoes landmark ban on rent-setting algorithms

Democratic Gov. Jared Polis has vetoed a bill that would have made Colorado the first state to ban landlords from using rent-setting algorithms, which many advocates have blamed for driving up housing costs across the country.

https://apnews.com/article/realpage-rental-algorithms-colorado-ban-veto-d1cddfa27f4e5dc46b34ad5f9c20d983?

[phkrause]

? Airbnb has entered the chat. Amid reporting that billionaire investor and Airbnb cofounder Joseph Gebbia is part of a new leadership team taking the helm at DOGE, the booking platform just spent $1 million on attack ads targeting New York City mayoral candidates who support the city’s crackdown on short-term rentals. Research shows that when Airbnb comes to town, communities see reduced housing supply and higher rents, which led NYC to effectively ban rentals shorter than 30 days in 2023. The move cost Airbnb 80 percent of its listings in the city within a year. 

• The New York Times reports that Airbnb will spend approximately $5 million in New York to support industry-friendly lawmakers in the coming years after spending $1 million in the state in the first 10 months of 2024. Already, they’re seeing results: The NYC council may soon reopen the Airbnb market to single and two-family homes.

[phkrause]

? Sub-$1K rent? Good luck

Data: Harvard Joint Center for Housing Studies. Chart: Axios Visuals Affordable apartments are disappearing as luxury rentals multiply, Axios' Sami Sparber reports from new research. ? Over the past decade, the number of units renting for under $1,000 a month (inflation-adjusted) fell by around 30%, per a report from Harvard's Joint Center for Housing Studies. ? Meanwhile, an upscale apartment building boom helped nearly triple the number of $2,000-and-up units. Yes, but: The high-end apartment boom can still benefit lower-income renters, the researchers noted. Areas with lots of new construction over the past few years saw slower rent increases, or outright declines. ? And when higher earners move up, older, cheaper units may become available. Go deeper.

[phkrause]

New limits for a rent algorithm that prosecutors say let landlords drive up prices

Landlords could no longer rely on rent-pricing software to quietly track each other’s moves and push rents higher using confidential data, under a settlement between RealPage Inc. and federal prosecutors to end what critics said was illegal “algorithmic collusion.”

https://apnews.com/article/realpage-doj-lawsuit-settlement-rent-data-4d8985a50c28b6322b8f82a2fbb5c79e?

[phkrause]

🏗️ Mapped: Where rents are falling

Data: Apartment List. Map: Axios Visuals A building boom across the South and Mountain West has cooled rents — but that relief could fade as new construction slows, Axios' Sami Sparber writes. The median rent in Austin — a building hot spot — was down nearly 6% this February from a year earlier. It fell roughly 5% in San Antonio, New Orleans and Denver, according to data from Apartment List, a rental site. Phoenix (-4%), Tampa (-4%) and Salt Lake City (-2%) also posted big declines. 📍 The other side: Rental markets are tighter in the Midwest, Northeast and parts of the West Coast, where building is harder due to zoning restrictions and a lack of space.