It can’t be said enough that government control on a private business or, in this case, rent prices, doesn’t go well. There are plenty of options available for companies to move where they’ll have more freedom to conduct themselves as they want.
In St. Paul, Minnesota, they found out that projects will stop if you cap rent prices. A vote of 53% passed that would limit the rent price to 3% each year regardless of whether it’s new construction or not. Most places have shot down these measures because of their problems with the housing market and the negative impact on managing low-income housing when new construction isn’t coming in.
Large developers have said they’ve paused all projects to determine what they’re going to do next. They told the Minneapolis Star Tribune and the St. Paul Pioneer Press that they were “re-evaluating what if any future business we’ll be doing in St. Paul.”
B Kyle, the president and CEO of the Saint Paul Area Chamber of Commerce, said that she’s categorizing all of the projects that have been stopped because of the new vote and that more projects were supposed to begin renovations but stopped because they don’t want to invest money that they won’t get back. It makes sense from a business standpoint, and it’s the citizens that will suffer. According to Kyle, there’s “chaos” in the city because of it.
If the eviction moratorium weren’t bad enough for property owners and citizens, this socialized rent structure would make it more difficult for families to get ahead. The market will generally stabilize itself, and real estate markets have proven that. The only part of real estate that should be controlled is low-income housing that has to be regulated. It’s managed by the city and given to people in need. Otherwise, the market should determine.
“We said this would happen. This should be no surprise.” Kyle, and others, saw it coming, and the city should have taken notice.
Kyle also said that it isn’t about emotion, which is what Democrats usually vote on. “The truth is, we’re seeing it. It isn’t about emotion. It is about how does a deal get financed, how does a projected cash-flow, can you make a fair profit on a deal?”
The financing portion will undoubtedly be an issue. With inflation getting worse, banks will get more stringent on lending, especially if there’s a cap on return investment. It’s not going to work out for anybody to continue the socialist behavior that the government continues to push down Americans’ throats.
“Developers will do deals where it makes sense for them to do deals. Our goal in St. Paul is to make this as inviting an environment as possible, so investors want to bring their projects here because St. Paul desperately needs more housing across the entire spectrum.”
Again, if you push business away, you have to deal with the consequences. It’s not hard for ordinary people.