Calls for rent control increasing across California

Calls for rent control are heating up across the Gilded State, and not just from Silicon Valley, either.  From Santa Rosa to San Diego to Alameda to even Sacramento, we are seeing the affordable housing rhetoric move even deeper into the suburbs.  Where once rent control was the province of high-density urban areas, it is becoming the next new push for the entitlement generation.  

Simply put, there are more voters as renters than landlords.  One thing government has become very good at as of late, especially in California, is beating up the ballot box minority.  Business owners are not the only ones.  Now add to that anyone with the audacity to attempt to earn a return on invested property.

This is dangerous ground.  

All advanced, civilized societies are predicated on the advent of private property suddenly being allowed into law, not seized.  And that is exactly what rent control is: the seizing of property outright by government. 

An argument could be made that taxes, too, are a seizing of private property in the form of your time and your life's effort, and that argument is right.  Property, however, beyond the annual taxes assessed, is tangibly affected as it is raked by statist price control agents and permanently impaired.  The asset value of a recently controlled property plummets almost immediately upon newly implemented legislation, sometimes dropping by 30% or more.  At least with eminent domain, the property owner is supposed to be given a fair market value.  Here, with rent control, a landlord is hemmed in and cannot sell.  He is essentially taken prisoner.  His property is permanently contaminated and made less investible.  Laws and regulations, too, make it almost immune from a change of ownership.  Sales slow down.  Other property owners just outside the artificially zoned ring can now inflate their prices as an offset to this coercion.  

There is an eerie similarity to the redistribution of land during Mugabe's "willing seller/willing buyer" sham that forcibly stole land from white African farmers.  In fact, it is the very same idea, except without the racial component, and no one gets murdered.  The redistribution is the same.  The landlord/landowner gets permanently impaired, while his tenant makes out like a bandit (insulated from all market forces) on lifetime cheap rent.  In some cases, that renter has zero motivation to ever move and lose his jackpot lottery win and can earn hundreds of thousands of dollars in the process as a protected tenant.  

These new toxic properties have less landlord engagement and reinvestment.  They become the next new wave of slums, as the imprisoned owner now wants to do only the legally obligated limit on any annual improvements.  Weeds, tree roots underneath cracking concrete sidewalks, rain gutters filling with leaves.  Without the true motivation to own or make a real return, these properties go south and are left to rot as investment always chases a return. 

Calls for rent control are heating up across the Gilded State, and not just from Silicon Valley, either.  From Santa Rosa to San Diego to Alameda to even Sacramento, we are seeing the affordable housing rhetoric move even deeper into the suburbs.  Where once rent control was the province of high-density urban areas, it is becoming the next new push for the entitlement generation.  

Simply put, there are more voters as renters than landlords.  One thing government has become very good at as of late, especially in California, is beating up the ballot box minority.  Business owners are not the only ones.  Now add to that anyone with the audacity to attempt to earn a return on invested property.

This is dangerous ground.  

All advanced, civilized societies are predicated on the advent of private property suddenly being allowed into law, not seized.  And that is exactly what rent control is: the seizing of property outright by government. 

An argument could be made that taxes, too, are a seizing of private property in the form of your time and your life's effort, and that argument is right.  Property, however, beyond the annual taxes assessed, is tangibly affected as it is raked by statist price control agents and permanently impaired.  The asset value of a recently controlled property plummets almost immediately upon newly implemented legislation, sometimes dropping by 30% or more.  At least with eminent domain, the property owner is supposed to be given a fair market value.  Here, with rent control, a landlord is hemmed in and cannot sell.  He is essentially taken prisoner.  His property is permanently contaminated and made less investible.  Laws and regulations, too, make it almost immune from a change of ownership.  Sales slow down.  Other property owners just outside the artificially zoned ring can now inflate their prices as an offset to this coercion.  

There is an eerie similarity to the redistribution of land during Mugabe's "willing seller/willing buyer" sham that forcibly stole land from white African farmers.  In fact, it is the very same idea, except without the racial component, and no one gets murdered.  The redistribution is the same.  The landlord/landowner gets permanently impaired, while his tenant makes out like a bandit (insulated from all market forces) on lifetime cheap rent.  In some cases, that renter has zero motivation to ever move and lose his jackpot lottery win and can earn hundreds of thousands of dollars in the process as a protected tenant.  

These new toxic properties have less landlord engagement and reinvestment.  They become the next new wave of slums, as the imprisoned owner now wants to do only the legally obligated limit on any annual improvements.  Weeds, tree roots underneath cracking concrete sidewalks, rain gutters filling with leaves.  Without the true motivation to own or make a real return, these properties go south and are left to rot as investment always chases a return.