Why wouldn’t they be able to make a profit? The demand for housing wouldnt be any lower, they just can’t increase rent above what it was.
The barrier of entry would be lowered by greedier land lords deciding to sell rather than not being able to raise rent, so people who are slightly less greedy and willing to make only maybe a 300% profit instead of a 1000% profit would take over. Corporate landlords get flushed out to make room for smaller mom & pop owners.
If the existing investors have to sell at a loss because there’s no profit to be made, someone gets to buy them for cheaper, making it profitable again.
So the entire city will only be owner-occupiers? Sounds like almost everyone living in the city has their problems solved. The city can build more rent-controlled units.
How would the barrier of entry be lowered? Are you suggesting new investors are going to buy properties they can’t turn a profit on?
Why do you think it would work like that?
Why wouldn’t they be able to make a profit? The demand for housing wouldnt be any lower, they just can’t increase rent above what it was.
The barrier of entry would be lowered by greedier land lords deciding to sell rather than not being able to raise rent, so people who are slightly less greedy and willing to make only maybe a 300% profit instead of a 1000% profit would take over. Corporate landlords get flushed out to make room for smaller mom & pop owners.
If the existing investors have to sell at a loss because there’s no profit to be made, someone gets to buy them for cheaper, making it profitable again.
They’re not going to sell for less than what they can make off the property though, are they?
Then they’ll continue renting these properties at the new rates? Works too.
Until those properties slowly disappear from the rental market as they’re bought by owner occupiers.
Which is a problem if you can’t afford to buy a property.
So the entire city will only be owner-occupiers? Sounds like almost everyone living in the city has their problems solved. The city can build more rent-controlled units.