The real question is how much to think before action is warranted,
and what are the unintended consequences of various actions?
national/world investor market of institutional monies? Or
how about the geographic dysfunctions as one jurisdiction
creates rent control while across the highway the next
jurisdiction does not? One could create a real “have and
have nots” scenario in visual comparison over time.
Maybe Oregon has considered it? Oregon recently
passed legislation known as Senate Bill 608 limiting rent
increases to 7%, in addition to inflation. Subsidized rent
would be exempted, as would new construction for 15
years. If tenants leave their residences of their own volition,
landlords would be able to increase the rent without a cap.
Note based on the rent change table, the Oregon bill would
smooth out rent increases if they got frothy.
Another scenario to contemplate, for the smaller rental
communities, say 30 to 50 units, maybe the economic
reaction is to convert them to condos? There is concern
there are not enough condos at affordable prices. Would the
adoption of rent control lower the attractiveness to investors
for these communities, and lower the sales prices and justify
conversion to condo. I hope we stir the debate, the emphasis
of “think, before action makes sense”.
Ron Throupe is an associate professor at the Burns School of Real Estate and
Construction Management, Daniels College of Business. He is the co-author of the
AAMD Vacancy and Rent Report.
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Free estimates | in business since 1970
Free estimates | in business since 1970
MAY 2019
TRENDS | 23