Is there any particular reason why Los Angeles wasn’t mentioned in this post? From everything I’ve read, it seems to be the most chronically under supplied.
No particular reason - we don’t invest in LA and there’s a lot of cities to choose from so I didn’t discuss it. But the logic applies to LA, Chicago, San Diego, etc.
The one caveat to this is if the jurisdiction becomes so constraining that they start to expropriate the value of your property and hand it to others (i.e. rent control)
I agree, David - rent control is a net negative. It absolutely expropriates some of the property's value and hands it to the tenant. No question.
But I’d still argue that, in the long run, it tightens supply and drives prices up on what's left. And like any system, people figure out workarounds. You're probably not making much on plain-vanilla cash flow - but the value tends to show up in equity growth over time.
So yeah - it's terrible policy. Completely counterproductive. It doesn’t achieve its goals and actually makes housing less affordable.
Is there any particular reason why Los Angeles wasn’t mentioned in this post? From everything I’ve read, it seems to be the most chronically under supplied.
Got it, makes sense.
No particular reason - we don’t invest in LA and there’s a lot of cities to choose from so I didn’t discuss it. But the logic applies to LA, Chicago, San Diego, etc.
The one caveat to this is if the jurisdiction becomes so constraining that they start to expropriate the value of your property and hand it to others (i.e. rent control)
I agree, David - rent control is a net negative. It absolutely expropriates some of the property's value and hands it to the tenant. No question.
But I’d still argue that, in the long run, it tightens supply and drives prices up on what's left. And like any system, people figure out workarounds. You're probably not making much on plain-vanilla cash flow - but the value tends to show up in equity growth over time.
So yeah - it's terrible policy. Completely counterproductive. It doesn’t achieve its goals and actually makes housing less affordable.