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Orozco, Norma From: Houston, Nicole Sent: Tuesday, February 06, 2018 2:46 PM To: Alcala, Abigail; Huizar, Maria; Mitre -Ramirez, Norma; Orozco, Norma; Rojano, Michael Cc: Castro -Cardenas, Julie Subject: FW: Rent control session From: MultilInits Inc[mailto:multiunitsinc@gmail.comj Sent: Tuesday, February 06, 2018 1:04 PM To: Pulido, Miguel <MPulido@santa-ana.org> Subject: Rent control session Good Afternoon, I saw in Sunday's OC Register of a study session on Rent Control tonight. I want to give you my take on rent control as I've been involved in the rental business in Orange and LA counties since 1981. No doubt Southern California is a highly desirable place to live. I grew up in the Midwest and east coast and chose to move and live here in 1981. Because of this desirability and a shortage of housing units being built for decades, we are experiencing a housing affordability problem here as well as in many markets in the U.S. Rent control will not solve this problem. It will instead exacerbate the problem by reducing the incentive to build and own. Developers, builders, lenders and landlords all place money at risk in real estate to generate a return or profit on their investment. If this return is insufficient, they will all invest in a different type of real estate or area. Most landlords are good people! The landlords who jack up rents that the media refers to are few and far between. Rent control will cause the number of rental units to drop. Don't believe this? Check the trends in SF and other rent -controlled cities. Personally, I have several rental houses and would pull them off the market and sell them if they were under rent control. Rent control defies basic economics. How? Lower rents sound great if you're a current renter, but any price control makes it much more difficult for future renters to find housing. Reducing the profit that developers and landlords receive, compared to market rates, diminishes or eliminates the incentive to build additional housing in the first place. Sure a small number of renters who are lucky enough to obtain below-market apartments will benefit, but many others will not and they will be left with less affordable options than would exist without rent control. In some cases, rent -controlled buildings have been replaced with pricier, and more profitable, types of housing and rentals have been taken off the market or converted to for -sale units. Moreover, rent control diminishes the quality of housing since landlords have less cash flow with which to make upgrades or to keep their units current with the times. Regular maintenance also tends to suffer as landlords have less financial incentive to make timely repairs and improvements. Not to mention there's even less incentive to do so given the excessively high demand for rental units in the market today and probably tomorrow.