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 Posted: Wed Nov 28, 2012 3:59 pm Post subject: Rent Control |
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While I hate the thought of this rent control has been discussed in Newfoundland and Labrador recently, and for good reason. While I hate the thought of the government getting involved in the economy in such a way we have a serious issue, mostly in Labrador West, with people and companies taking advantage of a major housing shortage.
Rent control was brought up by the Mayor of Labrador City in August, and was again mentioned over the last two days after a company bought an apartment building in that area and is increasing the rent of a two bedroom apartment from $900 a month to $2200 a month. I believe older homes are being rented for as much as $6000 a month. There have been some horrible stories come out of the area with regards to rent and people losing their apartments. While I am a huge fan of capitalism we are now at a point where capitalism is turning into simply greed on the parts of some, is there anything government should or can do or should they just let this play out?
http://www.cbc.ca/news/canada/.....w-803.html
http://www.cbc.ca/news/canada/.....-1128.html |
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| Posted: Wed Nov 28, 2012 4:15 pm Post subject: |
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I am not familiar enough with the region;
However can you comment as to any significant new developments being built there at present or planned?
Is it a case that anything being built is being purchased by company x, or that nothing is in the works, or that supply is simply being greatly outpaced by demand? |
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| Posted: Wed Nov 28, 2012 4:34 pm Post subject: |
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Actually about three weeks ago a new apartment building that was weeks away from opening burnt to the ground.
This is the area where the major mining developments are happening in the province, but due to the area having boomed and busted before people are nervous to build new houses and apartment buildings. Though there are still lots of houses being built from my knowledge, just not enough. |
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Bugs
Joined: 16 Dec 2009
Posts: 1939
  
votes: 5
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| Posted: Wed Nov 28, 2012 9:09 pm Post subject: Re: Rent Control |
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| Progressive Tory wrote: | While I hate the thought of this rent control has been discussed in Newfoundland and Labrador recently, and for good reason. While I hate the thought of the government getting involved in the economy in such a way we have a serious issue, mostly in Labrador West, with people and companies taking advantage of a major housing shortage.
Rent control was brought up by the Mayor of Labrador City in August, and was again mentioned over the last two days after a company bought an apartment building in that area and is increasing the rent of a two bedroom apartment from $900 a month to $2200 a month. I believe older homes are being rented for as much as $6000 a month. There have been some horrible stories come out of the area with regards to rent and people losing their apartments. While I am a huge fan of capitalism we are now at a point where capitalism is turning into simply greed on the parts of some, is there anything government should or can do or should they just let this play out?
http://www.cbc.ca/news/canada/.....w-803.html
http://www.cbc.ca/news/canada/.....-1128.html |
The problem with rent control is that it stops a market solution from happening. The market solution, of course, is to increase supply ... allow more residential units to be built. These projects often have a lead time of years, while permits are gotten and the project is examined to get the point of view of every department of municipal government.
Rent control is justifiable as a part of a larger plan to bring rents into line in a community -- but has to be used while housing is being built ... and relaxed afterwards.
But it tends to become permanent, with a reduction in supply of housing, deteriorating quality due to little or no maintenance ... often the common elements stink, while some of the private units reflect a bit of splendor. In the end, leases become hereditary, and tenants never leave ... sometimes, they 'rent out' their subsidized apartments at market rates ... or get 'key deposits' in the $thousands ... that's what it's like in New York City, after three quarters of a century of rent control. (There, it's even worse, because a later generation of politicians relaxed rent control on units build after that date, so one part of Manhattan pays market rates, and another gets a huge subsidy.
You could say that rent control creates slums, because the quality of the existing stock of housing goes down continuously, over-crowding results, maintenance is neglected, and the demand/supply situation gets worse. That enables landlords and tenants to collaborate in cheating the system. It never works.
Probably this is an unusual situation ... and not typical of the whole province. The only real long-term solution is to encourage lots of new housing -- of every type -- to be built. If rent control can help with that in the meantime, OK ... but be warned ... politicians are loathe to dismantle rent control ... if it becomes permanent, it'll have dire consequences for that little community. |
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| Posted: Thu Nov 29, 2012 8:25 am Post subject: |
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I don't know what kind of issues they faced in communities in Alberta, the problem in Labrador West is the fear of the economy busting. The cabinet minister from this region was on the news last night and seemed to rule out rent control because it doesn't actually work.
It's an interesting topic none the less I think. |
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| Posted: Fri Nov 30, 2012 9:19 am Post subject: |
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I don't normally favor government intervention;
But rather then get in the way of supply, maybe the government could offer some intensives to increase supply? |
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| Posted: Tue Dec 04, 2012 11:26 am Post subject: |
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| As long as it is in the hands of the municipalities I have no problem with rent controls. If people aren't buying homes and keeping the rent market competitive gov't needs to step in and make that rent prices increase correctly with inflation |
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