Are Landlords Holding Us Hostage?

Cartoon of a house caught in a tornado with a caption saying, ‘I know, but have you seen how tight the housing market is?!

Every effort to make housing affordable is met with the same refrain. If we control rents, then it will be unprofitable, and no one will build. At even cursory inspection, this argument falls apart. The most obvious fallacy is that rent control would apply to new construction. Except it never does. The most ambitious rent control proposals exempt new buildings for 15 years. Fifteen years is enough time to pay down loans, raise rents on existing tenants, or get hefty increases when a tenant leaves.

After 15 years of market rates, not only has the landlord collected a lot of rent, but the building has appreciated in value. The depreciation of a property is tax deductible, but in actuality, the property will be worth much more over time.

Real estate is not primarily a short-term investment based on the immediate collection of rent but rather a long-term investment based on increases in real estate values. By its very nature, the outlay from building something new cannot be made up in the very short term.

Guaranteeing unlimited upside to a tiny group of billionaire corporate landlords at the expense of millions of renters is a bad deal for our society.

If we start with the premise that shelter is a necessity that everyone must have, then adopting policies that take it out of the reach of millions is foolish or cruel. The higher up the food chain you go, the less protection people need. If you can pay a king’s ransom for a fabulous penthouse, then you don’t need society’s help. If you are on disability or Social Security or work a minimum wage job, then maintaining a reasonable rent is your only lifeline.

New York has the strongest rent control laws in the nation, and yet construction has boomed there in recent years. At the same time, rent control has kept many poor and working-class people in their homes.

Charging unaffordable rents to people who can’t afford them is not a birthright. Exploiting a scarcity to jack up rents should be subject to regulation. The social contract that we must collectively provide for the most disadvantaged should not be sacrificed on the altar of corporate greed.

Landlords should not be allowed to hold us hostage. Their threats to disinvest should be discouraged by removing the unfair advantages they derive from zoning exemptions and tax breaks that further feather their nests.

The opinions expressed here are solely the author’s and do not reflect the opinions or beliefs of the LA Progressive.

Michael Weinstein is cofounder and president of AIDS Healthcare Foundation (AHF), the largest global AIDS organization, which currently provides medical care and prevention services to 2 million individuals in 47 countries worldwide in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region, and Eastern Europe.