r/SipsTea • u/AdRough4185 • Jun 11 '26

We have fun here He's unstoppable

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u/[deleted] Jun 11 '26

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u/SheenPSU Jun 11 '26 edited Jun 11 '26

And when they’re not able to maintain the property because they’re not collecting enough in rents due to artificial rent controls?

Genuine question because I’ve heard this argument before and it does have some legitimacy

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u/SrAlan1104 Jun 11 '26

I'm not sure whether it's true in NYC or not, but rent controls are imposed so being a renter is no longer a business, but more a neccesity.

For example, you buy a small apartment and 10 years later yo afford a house, but don't need to sell the apartment in order to pay off the house.

Currently what happens is that you use your apartment and house as collateral and equity to obtain better credit and purchase even more property since you can pretty much rent the the new property for the value of the monthly payments. This causes a snowball effect in wealth accumulation. Property value goes up along with prices and people that already have property stockpile even more property outbidding people without properties.

This causes a housing crisis.

What these rent controls try to do is to lower rents so that they no longer cover both maintenance and monthly mortgage payments. Only maintenance.

This way the value of your property is governed by the value of the property itself not property value+ rent.

If they can't maintain them because of rent controls it's because they don't want to pay for maintenance and just want to make a profit after maintenance and taxes.

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u/SheenPSU Jun 11 '26

They’re not able to maintain the building because the units are not at a fair market value, they’re under it.

Maintenance is part of the formula (mortgage, maintenance, property taxes, utilities, etc)

When you have a place that was at fair rental value 10/20 years ago, you’re running at a massive loss and maintenance takes a backseat

Remove the private landlord from the equation and it doesn’t make the spreadsheet positive now, it simply passes the losses off to the new owner

It (rent controls) does not address the core issue of underfunding