Curious about these "over 1/3rd of units operating at a loss" and how it relates to the RSO. There's no rental price cap for new move-ins, so if unexpected maintenance costs, low demand, or just bad math has an owner falling short on their mortgage, that seems entirely related to the free market.

My guess is these "losses" are investors buying buildings and not turning over tenants as quickly as they'd like, which was reflected in the purchase price of the property. Not really a loss, just bad speculation. If you don't have spare the capital to burn through before tenant attrition, you chose the wrong property.

Several interesting points:
- small rental owners did not make a profit. Sort of shoots down the HALA recommendations to open up SFZ to allow 2-3 units per plot.
- without some evidence that things could have been worse, LA's ranking as one of the most unaffordable cities does not really argue for rent stabilization
- rent stabilization is not rent control as the author points out. If that distinction is not made clear, then it is unlikely that the nuances will survive heated political arguments.

A few points:

1. Attorneys like rent control. Lots of work fighting the rent equalization boards. My Lawyer said " great we will need to get a bigger office". Jobs are jobs, right?

2. I used to take more chances on tenants with a questionable history. Not so much anymore. The more restrictions the city places on the property owner, the tighter my screening requirements become. Why take the risk.

3. I like the 2012 State law requiring written screening criteria. It protects the prospective tenant and the property owner. As I have told multiple applicants " sorry I used to have the flexibility to consider your particular circumstance, not anymore" It is all about the screening checklist now. Refer back to point #2.

4. People do not want to listen, but its true; All expenses end up getting paid by the end user i.e., the tenant.

5. My wife and I have a few rental units. We are not part of any special program. The majority of our unit rents are 30% of the 60%-80% medium income range. Our units are pretty nice. It is really good to listen to CM's Licata and Sawant talk about landlords price gouging, 100% rent increases, economic evictions. Really? Well if that is the way the city council views me maybe its time to start acting the part.

6. I don't know anything about the debate participant Roger Valdez. However, during his closing statement; He basically pleaded to the audience for City council to partner with developers, builders to work to provide affordable housing. The audience Heckled him.

Vote wisely folks.

@1 I wonder how much of the loss is due to tenants that repeatedly sublet their apartments out. When I lived in LA, this was fairly common. There was a two bedroom apartment in my complex that no one remembered the original tenant but everyone who moved into it would mention his name. They paid $750/month to live by themselves in a huge place. I'd love to have had that deal but I was never quick or connected enough. I shared a similar apartment with multiple roommates. Our rent was $1450/month. So, in a sense we where helping to subsidize the low rent on the other apartment. If rent stabilization is enacted, this is one of the loopholes that should be addressed.

@4 - Could be in small part. It's really up to the landlord to prohibit subletting. Even in rent CONTROLLED San Francisco you can get yourself evicted for that sort of thing.

@5 - Rent control apartments do go up annually as well, it's just a much more glacial pace.
Here's a link to this year's allowable increase here, with a link to a table for future years.
http://www.sfrb.org/index.aspx?page=954

I'm not advocating for either—every city has a different history for when and why these laws were enacted. I don't know the answer, but I think there's some common sense points worth hearing in the RSO.

It is not enough for apartments to break-even. They are an active investment that must be managed, and because they are leveraged with debt, are much more risky. They must out-perform passive investments like buying stock. Choice A: Buy stock and sit back. Choice B: Buy a building you own and manage it or supervise the management company. B is a lot more hands on than A, so why would I choose it unless the returns are higher? So if returns on A and B are equal, but B requires more risk and more work, why would anyone invest in B? They wouldn't, all other things being equal. We need more capital, leveraging more loans, to produce more units, to keep supply coming to people moving here, not less.

(to be clear, rent stabilization is generally considered a second generation form of rent control)

This is not being clear. This is not the way that people with expertise in housing policy use these two terms. They do not consider Rent Stabilization to be "a form of rent control," they consider Rent Stabilization and Rent Control to be two distinct policies.

That is why Michael Manweller can make the claim that every city that has instituted Rent Control has later rejected it. The only way to argue against this claim is to substitute a new definition of "rent control" for the older, widely-understood, widely-used one. It is not possible to argue against this claim by providing a counterexample in which the words "rent control" are used in the way that the vast majority of housing policy texts use them.

@7

The management and upkeep of rental units is taken into account in any competent report on rental markets. When a report says a landlord is breaking even, they mean that landlord is breaking even after netting all costs; it's not just rents collected less mortgage payments on the buildings.

1/3 of landlords losing money in a market is shockingly high, and almost certainly a lingering artifact of the housing bubble collapse; LA's real estate prices haven't recovered nearly as well as Seattle's (still at April 2005 levels, compared to Seattle's July 2006 levels) and no city has managed to get back to the peak. In other words, a lot of landlords are underwater on properties bought near the peak, not just homeowners.

Wow, good comments. Too bad its not like this more often.

Americans are not people of limits.

Europeans are people of limits.

We are people of expansion.

Expanding opportunity. Expanding prosperity.

That comes from the Frontier.

Today, the Frontier is bound by Land Hogs and Bureaucrats who constrain the natural urge of Americans.

We must sprawl across all of Washington State...it is our Manifest Destiny...no matter how much Sven Seattle and Wally Washington carp.

So, the one example Ansel comes up with involves rent stabilization, not rent control. And it results in small property owners losing their shirts, one of the most expensive housing markets in the country, and a gray market where subletting is rampant. This is the best pro-rent control example out there? Seriously?

Manweller is, of course, an idiot.

Of course, by focusing on his idiotic statement, you are conflating two different policy questions: should rent control be abandoned in cities that have it, and should rent control be introduced in places that don't. There are a number of good reasons to say 'no' (or at least 'not right now') to the first question that don't in the slightest imply it makes good sense to answer the second question with a yes.

#14: Not an advocate of regulation which dictates price controls for a diverse industry. But, property owners are responsible for the risks inherent in their investment decisions.

#7: Good point. More risk, more work, more reward. We invest in and participate in our rentals because it allows us to remain in control of our retirement investment.

Dupre & Scott Advisors reported over the last 15 years avg. rents increased about 3% per year. Those numbers were gleaned form owners with 50 or more units. I would be nice to know how smaller operators effect the market. anyone have information on that?

I'll have to agree with robotslave above, 1/3 with loses seems awfully high and a possible aberration. As far as moving forward there has to be some sort of mechanisms in place to bring some sort of sense to the Seattle rental market.

I enjoy political theatre as much as anyone but I don't know that the "debate" (the term is debatable in that context) was very helpful. Both sides of this issue do need to find a solution between them. Seeing that at the moment Rent Control is banned, is there a Rent Stabilization work around that could be put into place?

1/3 of landlords losing money in a market is shockingly high, and almost certainly a lingering artifact of the housing bubble collapse;

@9 - That's something I overlooked in my blabbering, you're exactly right.

You sent Sawant to a debate and you wanted actual facts? Who thought she would actually give sustenance to anything? She works on talking points and talking points alone.

Many could argue that rent control is what led San Francisco to become a town for the wealthy. Seattle would not be any different.

"L.A., New York and San Francisco are the most expensive and rapidly gentrifying cities in the country -- quick, let's do more of what they're doing!"

I fucking despair sometimes.

Let me get this right: at least 50% of the apartment owners either lost money for broke even – and somehow this is held as a successful model? In this article is spun somehow that rent stabilization works? Yet – the story itself admits around 50% basically fail as ongoing profitable businesses?

Reading the facts without any bias or spin, it's obvious that at least for this report is concerned – rent stabilization does not work for anyone but the larger apartment building owner, and also as described surely not for the actual city since rents are so expensive there.