There are areas full of empty houses/apartments that still charge far more than what the median employees there could pay; which seems to defeat that logic.
The argument that there’s no incentive to build housing under rent control seems to suggest the only reason you’d build housing is for year-over-year constant increases in profits - and that a simple constant revenue stream has no value at all. Even if large housing companies believed this, smaller competitors might not.
But those high rent areas… Okay I don’t know first hand, but in my reading I’ve been led to believe that it’s because companies like Black Rock come in and buy all the available properties, and whenever a property becomes available they buy it. They can then charge whatever they want and nobody has a choice because they bought all the available inventory, and they have deep enough pockets to outbid any competition. They don’t care if a unit goes vacant because they’re making it up on another unit. You can rent two units for $100, for rent one for $100 and leave the other one vacant; the revenue is the same but you’re actually better off leaving one vacant because you don’t have to pay for maintenance on it, and it’s one less property you have to actively manage. They could actually save money by leaving units vacant.
There are areas full of empty houses/apartments that still charge far more than what the median employees there could pay; which seems to defeat that logic.
The argument that there’s no incentive to build housing under rent control seems to suggest the only reason you’d build housing is for year-over-year constant increases in profits - and that a simple constant revenue stream has no value at all. Even if large housing companies believed this, smaller competitors might not.
But those high rent areas… Okay I don’t know first hand, but in my reading I’ve been led to believe that it’s because companies like Black Rock come in and buy all the available properties, and whenever a property becomes available they buy it. They can then charge whatever they want and nobody has a choice because they bought all the available inventory, and they have deep enough pockets to outbid any competition. They don’t care if a unit goes vacant because they’re making it up on another unit. You can rent two units for $100, for rent one for $100 and leave the other one vacant; the revenue is the same but you’re actually better off leaving one vacant because you don’t have to pay for maintenance on it, and it’s one less property you have to actively manage. They could actually save money by leaving units vacant.