That part is true, but the decision to take roommates vs not affects the demand on rental properties. The decision to rent a 2 or 3 BR instead of a 1 BR as a single person working from home affects the demand as well.
In a rent-control environment, people have incentive to hoard their rent-controlled apartment as well, especially if rents reset on turnover. If I have a rent-controlled apartment that's well below its replacement cost to me, I'm going to be more inclined to keep it when I initially move in with a significant other. If that relationship fails, I can move back. If it were a market rate apartment, I'd have much less to almost no incentive to do that.
Yep, I know at least one family that’s pretty well off that held onto their rent controlled place for years after no longer living in it, and then essentially passed it down to their kids. They basically own that apartment for less than it’d cost to maintain if they actually owned it, in terms of HOA/property tax, since the rent is stuck where it was like 30 years ago.
And when I was looking for a place, I came across a couple people playing landlord and trying to sublet out their rent controlled place for more than they were paying the landlord.
I don't think this is a very useful way of looking at it. it's uncommon, but not unheard of, for people to rent more than one apartment in the same city. especially if it's a large city, someone with a lot of money might find it attractive to rent a small studio by the office and a larger space in a nice residential area. if rent were really cheap, I might lease a second unit in my building for out-of-town visitors. it would probably be more practical to just rent a 2BR instead, but in some sense this is the same thing. renting two 600 sqft apartments takes roughly as much living space off the market as renting one 1200 sq ft apartment. if rent were way cheaper, you would probably see developers start building much larger units and people renting them. indeed, this is often what you see when you compare housing stock in the city vs. the surrounding suburbs.
I know at least 4 people who lucked out on a rent control unit and have essentially moved away but don't want to give it up, and so keep it as a second residence. Or in other cases, rent it out to someone else at market rates.
Maybe for you, in your current life situation, but that isn't for everyone. You might want a large apartment to live in, and a small room near the "party/bar zone" where you can sleep off your night. Similar to the above you might want a large place for the family, and a small place near work so you can get to the next shift. The above are somewhat common reasons people already take two apartments in the same city.
And there are also people who would be interested in an apartment in a different city. A favorite vacation destination. Near the in-laws so you can visit and yet get away. A short term job. The foreigner in an unstable country who wants every possible reason for customs to let him in if things get bad enough to flee. Hotels fill some of that, but if the price was right an apartment where you can leave spare things instead of packing starts to look nice.
Mostly it isn't economical, and I don't see that changing. However in the imagined world where it was very cheap you might be interested in a second flat just across town. It would change your lifestyle to use it.
sokoloff|5 years ago
In a rent-control environment, people have incentive to hoard their rent-controlled apartment as well, especially if rents reset on turnover. If I have a rent-controlled apartment that's well below its replacement cost to me, I'm going to be more inclined to keep it when I initially move in with a significant other. If that relationship fails, I can move back. If it were a market rate apartment, I'd have much less to almost no incentive to do that.
ericd|5 years ago
And when I was looking for a place, I came across a couple people playing landlord and trying to sublet out their rent controlled place for more than they were paying the landlord.
It’s pretty broken, at least in NYC.
leetcrew|5 years ago
nerfhammer|5 years ago
bluGill|5 years ago
And there are also people who would be interested in an apartment in a different city. A favorite vacation destination. Near the in-laws so you can visit and yet get away. A short term job. The foreigner in an unstable country who wants every possible reason for customs to let him in if things get bad enough to flee. Hotels fill some of that, but if the price was right an apartment where you can leave spare things instead of packing starts to look nice.
Mostly it isn't economical, and I don't see that changing. However in the imagined world where it was very cheap you might be interested in a second flat just across town. It would change your lifestyle to use it.
arebop|5 years ago