“No matter how thin you slice it, there are always two sides.” Baruch Spinoza

We are mostly speaking about our current rent control affecting Southern California, but the concept actually goes back centuries. The amazing thing is that, throughout all the years, the idea of rent control makes no more sense today than it did in the past.

ROMAN TIMES Under Julius Caesar, the annual pay for a laborer and a renter, which accounts for most of the citizenry, amounted to about 1/12 of their income. Roman workers were paid with SESTERCES which were Roman coins. Modern US values would be between ..050 and 2.00 per sesterce.

When some senators, who were also landowners decided to double the average rents, Caesar limited the amount of sesterces that could be charged per year 2000 for Rome and 500 for outside areas. He also declared a rent freeze and a year of rent forgiveness. Even though sesterces are no longer legal tender, rent control remains an important issue.

WORLD WARS Defense of our country and relocation along with times of high inflation and economic recession, during, between and after two major wars caused the government to establish wartime rental rate restrictions. Most of these were gone by 1950, with a major exception being New York which retained long-term stabilization laws.

MODERN TIMES During more recent times, many activists saw rent control as a means to make housing more affordable and supported politicians who echoed their beliefs. Cities like Berkeley, San Francisco, Santa Monica and West Hollywood enacted very strict statutes tying rent raises to cost of living percentage numbers, along with requiring “just cause ‘evictions. In 1995 The COSTA HAWKINS ACT was a helping hand to housing providers. It allowed for single family homes and condos to be exempted from rent control and allowed for a newly vacant unit to be re-rented at full market value. It also exempted rent control from properties less than fifteen years old.

RENT CONTROL NOW We, as housing providers and brokers, know that rent control causes potential multi unit investors to put their money elsewhere. We also know that rent control deters potential multi unit builders. All this is bad for everyone. It results in less inventory and forces potential renters into a game of musical chairs when vying for our existing available rental properties. Thus we see that no matter what it is called, or how it is enforced, rent control is a losing game.

“The difference between the possible and the impossible lies in a man’s determination.” – Tommy Lasorda

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business or you may want to move into a more passive real estate investment, such as a triple net or a DSL. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.