29 April 2015

You Say "Rent Control"...

I say "Long term lease."

Seems like people should have the right to be able to live where they want to live without major changes being forced upon them.  We don't forcibly exile law abiding citizens.  In California, Proposition 13 was passed oh so long ago, partly based on the argument that steadily increasing property taxes were forcing retired people to move out of their homes.

But instead of "Rent Control" to allow people to keep their dwellings when growth is rapid, suppose we used "Long Term Leases".  Suppose we got to a situation where you could sign a long term lease -- a 25 year or 30 year or 50 year lease.  The renter and landlord would negotiate a base rent and a yearly rent increase.  There would be an agreed upon mechanism to allow the renter to terminate the lease.

In particular, one mechanism for terminating the lease would be for a 3rd party to pay the renter to have the lease terminated so that the 3rd party could acquire a new long term lease at a higher price with the landlord.   Under this approach, the landlord still makes a profit in a fast growing market, but the renter can also make a profit and be compensated for giving up their right to live in one place for a long time.


But the concept of people being able to live where and how they want has broader applicability.  Here in the Bay Area, there's a strong call to increase housing development.  But none of these calls mention the fact that we're in the middle of a drought and current residents are being asked to cut water usage by 20%.  I've never seen a call for more development discuss how to compensate existing residents for the changes that will be forced upon them.

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