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Commercial rent control is a fail. Change my mind.

🔵 Commercial Mortgage Backed Securities TLDR: https://www.reddit.com/r/nyc/comments/innhah/nearly_twothirds_of_new_york_restaurants_may_have/g4ai27m/?context=3
🔵 The law: https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=4230081&GUID=B2FF2D24-F642-42A1-BEBB-D8D59E079D99
🔵 Business Journal thoughts: https://www.bizjournals.com/newyork/news/2021/09/24/commerical-rent-control-has-too-many-problems.html
🔵 Overpriced real estate: https://youtu.be/wpC4IGAkgok
🔵 Overpriced real estate: https://www.youtube.com/playlist?list=PLkVbIsAWN2lvKojYIchFhwXQq-nX09K2u
🔵 Overpriced real estate: https://www.youtube.com/playlist?list=PLkVbIsAWN2lt_n88l7WC2u22TRHKmw8ya

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Written by Louis Rossmann

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  1. Don't forget that commercial mortgages sometimes allow payments to be moved to the end of the mortgage term, extending it, if the revenue generating space in the property is empty. That means the landlord DOESN'T bleed out slowly by having the space empty. They don't gain any equity in the property, but if the valuations of buildings continues to rise, nobody is going to care about not being able to pay off their mortgage principle.

  2. Rent control is a solution to a problem of overly-exclusive land use policies. Rather than institute rent control, the best way to create affordable commercial property is to allow every property to be commercial without a need for a license. Increase the supply and prices tend to trend downwards.

  3. Embedded growth obligations are a structural perverse incentive of capital markets. The F.I.R.E. sectors of our economy are dependent upon exponential growth towards monopolistic market capture. This is one of the many reasons why RENT is slavery, for both tenants and landlords. Of course, the peasants will suffer disproportionately, as they must under a fractionalized monetary system. Reforms and regulations will only accelerate economic dislocation, which is why neoliberal zealots are delusional in their panicked attempts to maintain dominance and control.

  4. What this means if your in realstate and are fool enough to gamble the rise and fall of value it's your choice and you demand legislation to cover your misinvestment. This is another weak example of stupid investment relying on government to back poor business practice. It's a way to pay bailout money in realstate's bad practice of economics.

  5. This is a great example of politicians not understand the root cause of the issues. Just a piece of virtue signally legislature that does nothing to fix the problems of now, and creates even more problems people in the future will have to deal with.

  6. I feel like an easy solution to this would be to tax landlords with vacant properties as if they are occupied. If they're going to pay taxes based on a rent of 100k, they'll definitely want to make sure there's actually someone there. Losing 1,000 dollars a month on taxes vs earning 49500 might actually be an incentive.
    Is it perfect? Nah. But it's aimed at vancancies at least.

  7. Reduce the size of your Store in New York, find another site in another city for a second store and moooove. The people you really want who can't move stay – those who can move will move.

  8. The problem is the states tax’s and regulations… and that’s what y’all end up with… in Kentucky you can rent a 2000 square foot home on 2 acres for 3bed 2bath for 800 bucks…Northern central florida you can rent a 1600 square foot mobile home on 5 acres for 650 a month.. low tax… low regs…

  9. Well, it USED to be a board repair channel. But I get it. I do occasionally miss the solder porn sometimes, though.

    As far as rent control: If you think NYC real estate is expensive now, wait until a few years of rent control has gone by! I base this on the fact that the most insanely expensive housing rents all happen to be in areas with long standing rent control.

  10. THE BIG QUESTION: What benefit do the Landlords get from leaving these places empty? There had to be SOMETHING! Some tax they have to pay on an occupied property, tax write-off, I don't know. But there had to be something.

  11. Hey if they are hurting the city with their greed then they should be taken over under eminent domain and run as non profit.

    Capitalism is an economy with profits in command instead of the needs of society in command. This is the result.

  12. One thing NYC could do that might help is to levy a heavy tax on empty real estate to force landlords to rent the space at whatever price they can get instead of letting it sit empty forever.

  13. Can someone please explain to me why the landlords are content to keep their storefronts vacant? What is their incentive for this? Aren't they losing money by having to pay property taxes on these buildings?

  14. Cities need to tax empty expensive real estate for being kept empty longer than 6 months, so they will be forced to rent it out cheaper or start paying thousands in empty tax every month!

  15. in expensive business hubs, the government wants to pretend like they are addressing the issue rather than fix the issue because fixing is a conflict of owner. the larger landlord are the donors to the government and they fund their elections.

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