The Impact Of The Tax Reform Act On Rental Properties

The Tax Reform Act of 1986 reduces the tax benefits of investments in rental properties. To compensate for the loss of these tax benefits the investor must either accept a lower after tax cash flow or the rents must be raised. This article suggests that a rent increase of 28% may be necessary in order for the investor to maintain the same after tax cash flow as before the tax law changes.

Tenant Mobilization and the 1907 Rent Strike in Buenos Aires

In September of 1907, the residents of a large conventillo, or tenement house, in Buenos Aires protested a 47 percent rent increase by striking against their landlord and refusing to pay. The strikers called on the residents of other rental buildings to join with them and organized a central committee. The strike spread quickly. By October 1 tenants from more than 750 buildings had joined in the strike. That number increased to nearly 2,000 buildings before the end of 1907. Neighborhood and building committees arose throughout the city as nearly one tenth of the total population of Buenos Aires, and tenants in several other major cities as well, joined the strike in one of the largest and most unusual forms of working-class collective action in early twentieth-century Argentina.

Impacts of the Los Angeles Retrofit Ordinance on Residential Buildings

The Los Angeles Earthquake Hazards Reduction Ordinance, enacted in 1981 required owners of all unreinforced masonry (URM) buildings to comply with retroactive seismic standards. Among the 8100 URM buildings are approximately 1600 residential buildings with 46,000 housing units. As of March 1991, 55% are complete, 13% are in progress, 12% have been demolished and 20% have not complied. Data kept by the city shows the average cost per unit to be about $6000, and the average rent increase for tenants to be $67 per month, a 14-26% increase over pre-retrofit rents. Less than one-third of the owners completing the retrofit have applied for rent increases. Only 6% of the completed buildings have received financing assistance from the city. Two-thirds of the residential building owners appear to be finding the financing to complete the retrofit without assistance from the city but the remaining one-third of the units are at risk because owners are unable or unwilling to undertake the required work. Tenants who were forced to leave demolished or vacated units had difficulty finding replacement housing at affordable rents, and all tenants in downtown neighborhoods have been impacted by increasing rents and lost units. The Los Angeles experience is important for other cities attempting to establish ordinances and prepare policy for assisting building owners and tenants.