A speaker argues rent control policies backfire, citing research showing frozen rents force small landlords to cut maintenance or sell properties, ultimately reducing affordable housing. Massachusetts politicians pushing rent control also support higher property taxes, creating an impossible squeeze for mom-and-pop owners.
you are going to have to be at least moderately political, all right? Because we have major policy decisions that are happening, and I don't know that there is a very loud outcry going on. Now in this one, we're talking about Massachusetts where they're looking at statewide rent control. For those of you who don't know the history on rent control, it has never worked. You can look at all the research. It doesn't matter if the institution is left-leaning or right-leaning. All of the data, all of the white papers, historically rent control does not work and here's why. When you tell the market what it can and can't choose to charge, then the market assumes it's controlling every other input. However, when you have a situation where rents are frozen, what happens when property taxes go up? 'Cause in general, hmm, notice this, the same politicians who want rent control are also the same ones that want higher property taxes. What a coinkydence. Isn't that so cute? And we know that if you freeze rents and a property owner gets increased property taxes, they're just expecting that landlord to eat it. Why? Why? Well, they make the assumption that every landlord is a BlackRock. Well, they're not. The bulk of your affordable housing units in the country that are for rent are owned by mom-and-pops. They're not owned by big hedge funds. The hedge funds like the A-class apartments. Big shiny ones with floor-to-ceiling glass and hardwoods and granite countertops. They don't want the stuff that mom-and-pop investors buy. And when rent freezes come into place, those landlords are not operating on huge margins, y'all. Property management and owning rental properties is a very low-margin business because you have a lot of inputs you're dealing with. You got property taxes, you've also got maintenance. And by the way, those same units that tend to be the most affordable in every marketplace are also the ones that need the most maintenance work. Good landlords do their maintenance. They are not slumlords. They do take care of properties. But if they're facing increased cost of labor and materials to fix things like roofs and leaks from a plumber and the water heater that's not draining into the crawl space, it's draining onto the kitchen floor, stuff. Stuff that has to get fixed. So it costs them more to fix it, and their taxes are up, and the tenants are frozen on rents. What's going to happen is that those landlords are either gonna let the properties go down and create a blight, and frankly create a worse living situation for those tenants, or they're going to sell the properties and walk away. So who buys them?
