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  • Writer's pictureMercedes Shaffer

Unraveling Inequity: The Uneven Impact of Rent Control on Property Owners

Mercedes Shaffer l Published in AOA Magazine

When one thinks of America’s greatest strengths, the kind of assets the world looks at with admiration and envy, America’s elite universities would long have been at the top of that list.  But the American public has been losing faith in these universities for good reason.”


This was the opening to Fareed Zakaria’s CNN show in response to the three Ivy League university presidents who’d come under fire in the House for their “vague and indecisive answers” when asked whether calling for the genocide of Jews would violate their institutions ’codes of conduct’.  He went on to say that, “Their performance was understandable if you understand that our elite universities have gone from being centers of excellence to institutions pushing political agendas.  Those agendas, clustered around diversity and inclusion, began in good faith, but those good intentions have morphed into a dogmatic ideology and turned these universities into places where the pervasive goals are political and social engineering, not academic merit.”

In a striking parallel to the challenges faced by America's elite universities, a similar erosion of fundamental principles is unfolding in the housing industry. Just as the prestige of Ivy League institutions has been tarnished by a shift from centers of excellence to platforms for political agendas, the capitalism fundamental of property ownership and entrepreneurial pursuits—cornerstones of the American Dream—is under threat.


Like the universities that have deviated from the pursuit of academic merit, the housing industry is witnessing continued government overreach and a departure from self-determination and the free market. The right to own property and embark on entrepreneurial ventures, aspirations integral to the American identity, and over 200 years of success as a country, are now endangered as government interventions, ostensibly driven by noble motives, compromise these essential liberties. Much like the universities' descent into dogmatic ideologies, the housing industry finds itself entangled in a web where the original ideals have succumbed to political and social engineering, eclipsing the once paramount principles of meritocracy and free enterprise.  Similar to the universities, the people that they are supposed to serve are the ones that are the most harmed.  Housing providers are being regulated out of business, and housing seekers are finding fewer options. 


This double standard extends its influence to the realm of California real estate, where a parallel zeitgeist mirrors the challenges faced by our elite universities and the broader housing industry. Despite the existence of Fair Housing laws designed to safeguard against discrimination based on race, gender or religion, a paradox emerges as the government itself engages in discriminatory practices against property owners. Our inherent right to manage our property is under siege, as the government enacts manifestly unfair laws that discriminate in favor of tenants, eroding the equilibrium between property owners and renters. Owners face growing financial and legal risks, and cannot fully manage their property or the terms of tenancy. The erosion of our rights extends further as the government curtails our ability to run a profitable business, imposing rent caps and other restrictions that eliminate free market forces, and create new layers of government bureaucracy, which need to be supported by our tax dollars.

Consider the significant shifts that have taken place since 2019, before the pandemic swept across the globe. Back then, a loaf of bread cost a mere fraction of what it does now, having inflated by a staggering 55%. Milk prices have seen a 31% hike, and even the iconic Big Mac witnessed a remarkable price jump from $3.79 to $5.17 during this period. Costs that directly effect housing providers include contractor and tradesmen’s fee’s, as well as utilities.  My experience in LA and Orange County has seen a fee jump of 40% in the trades, and 18% for utilities since 2019.  While the pace of inflation may have tapered off slightly, the enduring reality of escalated prices persists, forming an indelible backdrop.


This economic transformation stands in stark contrast to government mandates, exemplified by the city of Los Angeles' four-year rent freeze and Santa Ana's 2.54% rent cap (just to name a few cities), both of which disrupt the equilibrium and unfairly tip the scales against property owners. This disconcerting picture of injustice is particularly glaring when juxtaposed with the economic landscape. In an era marked by steep inflation, property owners find themselves thrust into an unenviable role, compelled to absorb financial losses in the name of tenant stability.

This juxtaposition underscores the disparate impact of economic forces on different sectors and raises critical questions about the fairness of policies that disproportionately burden property owners.  The stark inequity becomes apparent when compared to how other essential industries, like food, navigate similar challenges.


In the unfolding narrative of economic shifts and governmental interventions, parallels emerge between the erosion witnessed at Ivy League universities and the challenges faced by the real estate industry. Much like the call for a return to meritocracy in academia, housing providers need to fight for a return to the sound business fundamentals that drove America’s prosperity to begin with. This collision of economics, property rights, and governance serves as a poignant reminder that, just as elite universities should rediscover their commitment to academic merit, our approach to the real estate sector must recalibrate. We must use our votes, economic influence, and legislative education to fight against government overreach and advocate for a return to the principles of a capitalist economy.  It is a plea for a system that not only champions property rights but also recognizes the indispensable role of property owners. By allowing the free market to shape the destiny of an industry integral to the pursuit of the American Dream, we can collectively strive for excellence, fostering an environment where fairness, meritocracy, and opportunity prevail!


I'm eager to hear your thoughts on this matter—do you share a similar perspective or have a different take?  I would love to know what you think. 


To share your thoughts, email InvestingInTheOC@gmail.com.  If you have any real estate questions or you would like to attend my FREE Seller Seminar visit InvistingInTheOC.com or call me at 714.330.9999 to learn more. I’m Mercedes Shaffer, a multifamily and commercial real estate agent with Coldwell Banker Realty, helping you build wealth one door at a time.  DRE 02114448

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