Corporate Landlords Aren’t the Real Culprit

February 17, 2020

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“They get away with raising rents in places where local regulations impede the construction of new apartments.

Local regulations also play a role in the buy-and-rehab strategy employed by private-equity firms. In places where regulation limits new apartment construction, acquiring existing buildings is less risky than trying to build new rental housing. There are stronger financial incentives to maintain and upgrade old apartments in tightly regulated markets, because they face less competition from new, high-amenity buildings. This process of upward “filtering” among existing apartments is particularly harmful to housing affordability because it results in higher rents without expanding the number of homes available. “

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