Economic Lesson for Rent Controllers

I was having a chat with a friend who owns two rental units last week and has been doing some regular maintenance.  He told me generally the same thing that the Wall Street Journal has crisply quantified

Prices are surging for the raw materials used to build American homes.  Lumber, one of the biggest costs in home-building after land and labor, has never been more expensive and is more than twice the typical price for this time of year. Crude oil, a starting point for paint, drain pipe, roof shingles and flooring, has shot up more than 80% since October. Copper, which carries water and electricity throughout houses, costs about a third more than it did in the autumn.

Prices for granite, insulation, concrete blocks and common brick have all pushed to records in 2021, according to the Bureau of Labor Statistic’s producer-price index, which measures the change in prices that producers receive for their output. Drywall and ceramic tiles are short of records but have also climbed.

Building supply chains weren’t prepared when Americans began swarming model homes and Home Depots in April. Sawmills and factories shut down like most other workplaces early in the lockdown.  Suppliers never caught up. Now building permits for residential construction are being issued at their highest rate since 2006.

Can you imagine if B'game had passed rent control?  There would be deferred maintenance all over town.  You have to wonder how the neighboring towns that did (looking at you, Mountain View) will view the creeping neglect that has to occur when prices go up 80%, double, or a third on key materials.  The Law of Unintended Consequences isn't an economic law, but it should be.  I'm unclear on how the Fed can say they don't expect inflation to hit soon.  Oh, and gas is right behind.  "In California, the most expensive market, average prices stand at $3.88, according to AAA."

Comments

[Paloma Ave]

Politicians rarely do what is right. (notice I used the word rarely). Many seem to not think towards the future or review history (notice I used the word many).

Most seem to only look towards the next election (most).

I believe this why so many have lost interest in trying to introduce common sense into the equation.

But, I will continue to call attention to the 'so-called' progressive views that are constantly being unloaded on us (reminds me of fertilizer being applied to a dead lawn, in order to revive it).

I hope you're getting my drift!?

P.S. Thanks to Greasy Gavin for appointing yet another progressive (socialist) as AG.

[Rent Boy]

what is the maximum % rent that a landlord can increase the rent by in San Mateo? I heard it was 5% plus Consumer Price Index. Is this true? If so what is the current Consumer Price Index? Basically I want to be sure that my landlord is not raising the rent beyond the limit.

[laura]

Consumer Price Index (CPI) changes bi monthly. Right now, for San Francisco Bay Area, it is 3.8. Two months ago, it was 4.1. Also depends if its urban wage earners index or city index. Lots of factors play into it.

[Rent Boy]

thank you Laura, for future reference where can I find the current CPI? a website link would be nice

[Keith McNamara]

Santa Monica has a very successful rent control law going back decades and there’s little to any differed maintenance due to rent control. You rent control doomsdayers are really something. Making up lies. Without rent control Burlingame gets a transient population due to rising by rents.

[resident]

Keep telling yourself that. Maybe it will make you feel better and a little superior. Santa Monica is sort of a mess it's just not all due to rent control but that is part of it.

[Joe]

I am always amazed at how an economic policy that has been so thoroughly discredited in hundreds of instances can just keep coming back. Rent control introduces many more problems than it solves.

I'm also reminded of the comment above from 2021. I guess we have different views of how successful Santa Monica's law is :-0

Poor RWC if this passes.

https://www.smdailyjournal.com/news/local/rent-control-campaign-begins-in-redwood-city/article_ad3b8b7a-9d92-11ee-8820-0790856a6585.html?utm_source=smdailyjournal.com&utm_campaign=%2Fnewsletters%2Fheadlines%2F%3F-dc%3D1702911606&utm_medium=email&utm_content=headline