Since I think everyone at Hit and Run is all Keloed out, figure I’ll post this here: My understanding of the way rent control laws work, at least in some cities, is that older buildings will be price-capped at lower rates tied to some function of their monthly rent in the past, while newer buildings have more freedom to charge higher rents. If I’ve got that right, then a new apartment building precisely identical to some older one on the same plot of land should be able to charge higher rents and—here’s the key part—generate more tax revenue. Under Kelo then, we’ve got a really inefficient way around rent control laws: Just seize the building, knock it down, and stick a newer apartment building up on the same lot.
Kelo vs. Rent Control
July 3rd, 2005 · 5 Comments
Tags: Law
5 responses so far ↓
1 Will Baude // Jul 3, 2005 at 7:36 pm
Not to ruin a joke but the people who do the controlling and the people who do the seizing are presumably the same, right?
2 Julian Sanchez // Jul 4, 2005 at 2:50 am
Right. As you’ve divined, this isn’t really a serious policy proposal; I’m just being a smartass.
3 Ray // Jul 6, 2005 at 11:29 pm
It’s not generally so much the age of the building but the length of a tennant’s inhabitance that is covered by rent control. In most cities, the regulation restricts how much an incumbent tennant’s rent may be raised in a given, and from lease to lease. Hence, you have geezers on the Lower East Side who have lived there since the 1950s paying not substantially more for their prized apartment space than they would have on the open market in, say, 1971. But when an old tennant moves out, the new tennant starts with a fresh rent control clock.
4 jordan // Jul 8, 2005 at 11:54 am
Julian: why isn’t this a serious policy proposal? it seems appropriate to me to have a massively inefficient fix for really inefficient laws.
5 Big // Jul 8, 2005 at 11:06 pm
It’s cheaper just to pay people to get out. Seriously, that’s what landlords do. They give people thousands, even hundreds of thousands, to get the f’ out.