Government intervention in Rent Controls will back fire

Lately, there has been increasing pressure for government intervention in establishing rent controls on newer purpose-built rental properties.  The current market fuelled by low-interest rates and just plain stupidity, is causing unsustainable demand. When this happens greed steps in. Unfortunately, some people will get hurt when greed rears its head. Trying to intervene by legislation will mean that developers and landlords will adapt. They will either cut back on maintenance, stop building new projects, or add other fees to make up the difference. Whenever we intervene in a market we are picking sides, meaning that one side gets disadvantaged. There are repercussions. Historically Governments have done more damage when they pick winners than if the market does. I could list several examples but that would take too long.

We need to let nature take its course. No one has long-term memories anymore. But those of us who study history know better. This market will crash and the problems that have come with it will correct themselves, albeit in a dramatic fashion. You need to let people fail so that they learn from their mistakes. If there was no idiotic demand and speculation, prices and rents could not be met.

Keep the market free… and remember, those who fail to remember history are doomed to repeat it.

Rick Barbosa





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Our Senior Partner Rick Barbosa is a Professional Accountant and Personal Financial Advisor with over 25 years experience dealing with Large Fortune 500 Organizations and Small to Medium sized Family owned Businesses. If you're looking for help with your finances, taxes, investing or starting and managing a business you've come to the right person.

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