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this post was submitted on 24 Aug 2023
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Economics
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I think rent-controlled properties tend to be apartment buildings rather than single-family homes. An apartment building can be converted into a co-op or condominium and I admit I don't know much about that process. I can see a lot of potential difficulties. Maybe there are solutions and I am just ignorant of them.
Presumably most of the tenants in the building can't afford to buy their apartment outright but just kicking them all out isn't allowed. If tenants do end up getting their apartments for less than market price, what's to stop them from immediately reselling them? And won't monthly costs for the tenants go up because the co-op/condo can't run at a loss?
It’s pretty common to have a building that’s partially inhabited by renters and partially by owners. It’s not super unusual to have a building owner sell only some units in a building.
It’s entirely possible to put a clause in the contracts associated with the sale that the new owner must give the old owner a share of any profits on a resale within five years.
If there’s a building with five rent controlled units, two of which are occupied, and the owner of the building sells off the other three, the two occupied units will continue to be rent controlled and belong to the landlord. If the landlord doesn’t want them and lowers the price by a bunch or makes a special offer to the tenants, people still don’t have to buy it. If people start to think being a landlord is risky and maybe not a great idea, good.