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As the old economics saying goes, you get more of whatever you subsidize and less of whatever <br />you tax (or punish through regulation). By punishing companies that provide apartments and rental <br />houses, the city will get see its rental stock dry up — something that will only exacerbate the <br />shortages. <br />With these price controls, fewer landlords will invest in housing and many will sell their properties <br />for other uses (e.g., owner -occupied houses and condominiums). They will be less apt to upgrade <br />older buildings and make necessary repairs. Misbehaving tenants will more easily evade eviction, <br />which harms the city's neighborhoods. <br />That's not conjecture, but is based on empirical evidence. After observing rent control's results in <br />Stockholm, Swedish economist Assar Lindbeck famously said, "In many cases rent control appears <br />to be the most efficient technique presently known to destroy a city — except for bombing." <br />The council meeting was understandably contentious. Fortunately, three council members — Phil <br />Becerra, David Penaloza and Nelida Mendoza — opposed the law, which meant it couldn't be <br />implemented immediately as an emergency measure. That provides several months for the city to <br />craft the details of a rent -control board. <br />California already passed statewide rent -control regulations, but the council majority — Mayor <br />Vicente Sarmiento, Thai Viet Phan, Jessie Lopez and Johnathan Hernandez — seemed more <br />interested in grandstanding than problem -solving. At least we know whom to blame when <br />worsening shortages lead to longer waiting lists and eroded neighborhoods. <br />Respectfully, <br />Danielle Holloway McCarthy <br />Vice President <br />ARES I AMC I R3 <br />15320 Barranca Pkwy. I Suite 100 1 Irvine I CA 192618 <br />T: 949.595.5966 <br />Invest I Rent I Renovate <br />DRE Lic #01976049 <br />This communication is confidential and may contain information or material that is proprietary, legally <br />privileged and/or otherwise protected by law (all such rights and protections being expressly reserved hereby). <br />If you have received it in error or if you are not the intended recipient, please immediately notify the sender by <br />return message and permanently delete the message, including any attachments, and destroy any printed copies. <br />Any unauthorized use, copying or dissemination of this communication is strictly prohibited and may be <br />unlawful. Thank you. ARES, Inc. operating under California License 4 00881503 <br />