FEBRUARY 17, 1949
HYDE PARK, Wednesday—Judging from the letters I have been getting from owners of real estate there is a widespread feeling in this country that the present law under which rents are controlled is not fair to the owners. One man writes as follows:
"The present law and regulations of the rent office provide that the property owner may petition for relief, if he can show a substantial decrease for his net return for the last calendar year as compared to the average of any other two consecutive years since 1939. On the face of it, that looks fair enough. However, that is full of jokers, the primary one of which I would like to point out..."
He then proceeds to show that when rent controls were put on during the war the costs of operation proceeded to climb. He was not able to do decorating or make other renovations that would ordinarily be done to keep up the property in ordinary times. But since he made no repairs he managed to keep his net return at about what it had been. He kept thinking that with the end of the war rent control would cease, and then even if costs did not come down he would be able to raise his rents to cover costs and make the necessary repairs, which by that time would be essential. The end of the war came, costs stayed up and rent control stayed on, and the capital expenditures, which now should go into the building, could not be absorbed by much higher rents except over a period of years.
This would all seem to indicate that from the point of view of the owner, it is essential that we have a complete review of the rent controls that are to be imposed. It is only fair that property owners get a reasonable return on the money invested and are able to keep their property up and make such improvements as are necessary. Otherwise, the standard of housing will go down and there will be no incentive to building for rental purposes.
Home ownership is something to be encouraged, but nevertheless a great many people must rent and to wipe out the incentive for building and renting is poor business.
On the other hand, there are landlords who before the war were getting more rent than they actually merited as a return on their investment. There are people who find it very difficult to get reasonably decent housing for reasonable rentals, so this is a question that cannot be left altogether in the hands of the property owners and not altogether in the hands of those who must find places to live.
People who happen to own property must not be allowed to charge whatever they like without any justification, but neither should the honest landlord be made to suffer because of an arbitrary overall organization that is not flexible enough to allow for fair readjustment. The time seems to have come for reconsidering this whole question and insisting that in every locality there shall be reconsideration on a fair basis to both owners and residents.