| The Hidden Costs of Rent ControlThis article by Bob Pinnegar, the CEO of the National Apartment Association, explores research on the effects that imposing rent regulations can have on communities, property owners, and renters. Some of the effects have been summarized below.Narrow Margins for Housing Providers: 93% of rent income goes toward operating costs/debt requirements, leaving little room for additional financial strain.Unintended Consequences of Rent Regulations: These policies cap rent increases, adding financial pressure on landlords and potentially reducing housing quality.Study Findings: NAA’s study links rent control with a 16.2% increase in severely inadequate housing and a 15% rise in moderately inadequate housing.Impact on Property Maintenance: 61% of housing providers with rent-controlled properties have deferred maintenance, leading to issues like heating malfunctions and pest infestations.Community Effects: Rent control correlates with increased neighborhood crime, a decline in school quality perception, and more trash in the streets.Long-Term Concerns: Rent control discourages investment, reducing property values and new developments, exacerbating the housing crisis. |
| Los Angeles Multifamily Construction UpdateIn response to uncertain financial conditions, Los Angeles County started construction on only around 500 market-rate units in Q2 2024. This slowdown in building could limit renters’ options in the future.Over the past year, only about 6,300 units began construction in L.A. County, marking the lowest level since 2013. The number of units under construction has decreased from over 27,000 in early 2023 to around 22,000 currently. This trend is expected to continue due to a sharp increase in debt costs, a growing vacancy rate, and the “mansion tax.”Sourced from Costar. |
| Fed Update Federal Reserve Chair Jerome Powell indicated that the central bank might consider cutting interest rates at its September meeting if current economic trends continue. The decision would depend on data showing inflation nearing the Fed’s 2% target and maintaining a strong labor market, despite unemployment rising above 4%. Recent inflation data shows a year-over-year increase of 2.5% in June. Powell emphasized a cautious approach, ruling out a significant 50 basis-point cut and highlighting that any reductions would likely be in 25 basis-point increments. The next Federal Open Market Committee meeting is scheduled for September 17-18, with Powell expected to provide more insights at the Jackson Hole Economic Policy Symposium in August. Read more HERE |
| You can view the full video HERE! In this video, Fred Leeds, owner/operator of 4,500+ apartment units, discusses the current real estate investing landscape, commenting on the impact of tightening restrictions and regulatory changes in Los Angeles. He shares his approach to deal-making under these constraints and offers valuable advice on investing out of state, including location selection and operational challenges. The discussion also covers the cost of doing business in Los Angeles relative to the need for affordable housing. Additionally, Fred provides his perspective on Costa Hawkins and the Justice for Renters Act, exploring their effects on property values in the future. |
| Are you curious how recent sales/market conditions have affected the value of your property? Click below for a property valuation. |
