Rent Control on the Monterey Peninsula
Rents on the Monterey Peninsula have been increasing the past few years. This is particularly true of the areas that Gorman Property Management serves: Pacific Grove, Monterey, Pebble Beach and Carmel. There is a limited supply of rental housing and a nearly insatiable demand to live on the Monterey Peninsula. Lack of supply and ever-increasing demand cause higher rents.
Why is the supply of rental housing on the Monterey Peninsula so limited? It is a combination of many factors, but a lot can be traced to government and citizen intrusion in the housing market, especially in towns like Pacific Grove, Monterey and Carmel (Pebble Beach is regulated by the County of Monterey).
Bottom line: it is very difficult to build in this area. Layers of governmental approval are required before housing can be built. All of the layers of government not only add to the cost of housing, but cause extreme delays. Delays cost developers money. While many on the Monterey Peninsula think the word “developer” is a dirty word, we need people who are willing to risk their capital to build rental housing. If we make it too difficult a process, the developers will take their money elsewhere and the shortage of rental housing will worsen.
Can Rent Control Help Freeze Rental Home Increases?
Rent Control seems like a good idea to tenants who are fed up with rent hikes recently. But rent control only worsens the shortage of rental housing because investors will not want to invest in areas that have rent control. Also, those who own rental housing in rent control areas won’t maintain their rental properties properly if they can’t get a reasonable return on their investment of capital.
The solution to the rental housing shortage on the Monterey Peninsula is not rent control; the solution is more housing. And landlords should consider moderation in rent hikes. Gorman Property Management counsels our owners to be moderate in their rent increases, especially for residents who have lived in their property for many years and are taking good care of the home or apartment.