How Rental Controls Helped To Create Co-living Apartments That Are Coming to World’s Largest and Priciest Cities – May 9, 2019,
Rental and price controls in general lead to higher prices, primarily because enforcement of price and rental controls are expensive to do. You need government officials to oversee pricing mechanisms which inevitably forces prices up because Government workers aren’t only corruptable they also collect paychecks that often have to keep up with inflation. Furthermore, most government officials who enforce prices controls are ideological in nature, which in many respects equates to their decision-making skills to be based not on market fundamentals, but based on what they believe to be true. Being that Property rights is a thing and being that the government doesn’t want to build government and manage government housing, they often after creating massive regulations opt to pass the difficult tasks onto the Private Sector.
Now, the private sector especially when it comes to housing using some form of debt financing, which makes it extremely important that they’re able to turn a profit in rental housing. Now, expenses for rental housing, especially for apartment buildings with elevators, electronics, plumbing, and general wear and tear, cost the owners a lot of money just for maintenance, which is why in non-rental controlled environments, even honest landlords would have to raise or fluctuate rental prices. Now, of course, there were certain rental housing individuals and businesses who would raise rents just because they could and of course, but it’s important to note that this wasn’t the case with all rental units, it was the case for a small minority.
However hen the opportunity came for people to vote on rental controls becoming a law, most ignorant people said ‘hell yes’ assuming that rental price controls would solve the problem, but no, rental controls made the problem worse, why? Because, in a rental control environment, rental developers in most cases will be extremely close attention to where they build their rental apartment, often choosing areas with great demographics, to avoid recipients on low-income earners and recipients on welfare. These rental companies will also intentionally inflate their rental prices, to make sure that persons on any form of welfare are excluded from applying. Now, prior to rental controls, this was actually the opposite of things were done.
Rental developments would target lower-income earners and it would be in the lower rental earners best interests to maintain the buildings, but what often happen is renters in low-income areas wouldn’t be appreciative they’d often be the most destructive, which of course as recourse is why rental prices would fluctuate, because if damage is done to a building and the rents were low, quite possibly the rent prices were low excluding unexpected damage costs to a property. Intentional damage to a rental unit is similar to theft in a store, it adds up and also t get people to fix electrical problems or plumbing problem as an example is costly and again most of these rental companies are in debt, so when a rent control law is created, prices go up.
Now in Canada’s major cities, we have a CMHC problem, which in many ways incentivizes Condo development over the building of rental properties. This is why there’s been so much building of Condos all over Canada. The problem is so perverse in Canada now that, in a market where Condos aren’t selling like they used to, Condo developers are offering free wine and avocado toast to woo buyers. Now, if you know anything about what’s going on, you’d know that most of the condos being bought in Canada for the most part being left idle, the buyers are usually, flippers, or they buy it to rent it out, they buy it for Airbnb or they’re foreign buyers who are purchasing because maybe in their home counties their governments don’t respect property rights.
Condo developers offer free wine, avocado toast to woo buyers in slowing market – Toronto Star
Whatever the reason, renters are getting the short end of the stick and the reality is that Toronto’s rental market is a pyramid scheme, where it’s basically in your best interest to rent or find a rental as soon as possible because prices will go up and if you’re not protected under rental control laws, well you might be paying double for a rental unit that some got into long before you did. This obviously means that there isn’t a real rental market, which of course, equates to a demand to create one. Now, to understand why it’s called Co-living apartments is to understand the loophole in the rental controls.
Shared accommodations in most large cities are exempt from rental controls, uber exists because it’s called ride sharing, which differs from a Taxi, now had the Taxi industry not tried to monopolize vehicle for hire or the non-shared ride experience, chances are Uber would never exist. If rental controls didn’t exist, chances are Airbnb wouldn’t exist, furthermore, Condos probably wouldn’t exist to extent that they do no in Canada had it not been for rental controls. Price controls create innovations, especially if there’s any semblance of a market economy.
Now, personally, I’d rather see CMHC and rental controls abolished, but hey, we live in a democracy and if millennials don’t want to end these horrible price control laws, well I guess Co-living apartments will continue to grow and grow, unless of course, some Leftist comes up with a law to stop it. There are already people in Canada trying to regulate Airbnb, so I don’t really know what to say about all of this stuff. I wish people would learn more about the Libertarian movements so we can bring prices down and have more of a free market economy, based on competition. Especially with the internet, bad landlords can be exposed, and more rental competition brings rent prices down. All of these Condos being built where rental properties should be a guarantee that rent prices will remain high, but the tradeoff would be to abolish rent controls. But hey, what I do I know, maybe people like paying higher prices for things.
Co-living apartments offer a sense of community for on-the-go millennials – CBC Radio
Interesting times ahead