Thursday, 2 April 2009

More Greedy Landlords?

Just heard somebody representing the landlords position on BBC Radio Jersey making a number of points:

a) The Jersey Consumer Council was wrong to publish a headline "Greedy Landlords"
b) Rentals in Jersey represent "fair market value" and are "not unreasonable"
c) In a recession, the person renting tends to have the upper hand
d) Rent controls would be wrong, and no country in the Western world has them (they went in the 1950s)

Let's take a look at this in more detail.

1) Greedy landlords. I have posted some details before, and at the end of this post I give more examples of extremely high rentals. I have yet to see any reductions in rental leases signed.

2) "Fair market value" could equally be described as "charge as high a rental as you can get away with". It is all a matter of point of view. Given the large rentals, and having knowledge of several business forced to close because of steep increases in rents, I would argue that "fair market value" is a way of excluding any moral judgment. "Fair" in this context is an economic term, and while sounding alike, has little in common with "fairness". "Fair market value" and not greed obviously accounts for the large number of empty shops in St Helier, while the "fair market landlords" stick with a particular rent, and prefer the shop to remain empty.

3) It would have been good if he had given examples of, for example, leases being reduced to take account of circumstances, contracts in leases which allow for reductions in rental in times of economic difficulty, new leases being more cognisant of the recession. I have yet to see a lease which does not have a year on year increase, often linked to the cost of living. While business margins are squeezed, there is no evidence of rents being squeezed.

4) This is the most idiotic argument I have heard all week. Perhaps now - a recession - would be the time to reconsider rent controls? The argument that "no country does it this way" could have been - and probably was - applied by slave owners in the 17th and 18th centuries over slavery in the Western world. Just because something is widespread doesn't mean that it is right, and while he stated "it would be wrong", he did not state - or was questioned - why? In fact, certainly for housing, a number of places have brought in rent controls. The New York Times has legislation passed in 2009. The reason is obvious - one of the key means of attacking a recession is State intervention in the market. That is not to say that rent controls are good at all times, but they are certainly an option to be considered. The idea that they are always bad comes from looking at economies which are not in deep recession, where there may be a very good case for not having them.

Examples of High Commercial Rents (some new, some previously posted):



A De Gruchy & Co

De Gruchy's Department Store, St Helier


Norman Ltd

10-31 Commercial Buildings, St Helier


Norman Ltd

Huelin Five Oaks Depot, St Saviour


Norman Ltd

Rabeys Universal Ltd, St Saviour


Three Mile Garage

Grande Route de St Martin, St Saviour


Big Verns Trading Co

Corbiere Phare, St Brelade


Big Verns Holdings

Big Verns and Discovery Bay Apartments, St Ouen


Pizza Express

59/61 Halkett Place, St Helier


Lloyds Pharmacy

Unit 1 Centrepoint, Red Houses, St Brelade


Lloyds Pharmacy

Unit 2 Centrepoint, Red Houses, St Brelade


Axle Clothing Co

55 King Street and 12 Broad Street, St Helier





Marks and Spencer

King Street, St Helier


Marks and Spencer

1 and 5 Maison du Squez, St Clement


Marks and Spencer

St John





Woolwoorth plc (20 yrs)

23-35 Halkett Place, St Helier





Reids Pharmacy

Lido de France Medical Centre, St Saviour


Haricot Ltd

Lido Medical Centre St Saviour


Lurline Ltd

Lido Medical Centre St Saviour





Clifton Nursing Home Ltd

Bagatelle Lane, St Saviour


Sandown Care Services

Bon Air Nursing Home, St Saviour






2 New Town Buildings, David Place, St Helier



3 New Town Buildings, David Place, St Helier



9 Mulcaster Street St Helier



Sand Street Shop, St Helier



Ground Floor, 23-25 Bath St, St Helier



17 Links Halt, La Moye St Brelade



4 &5 Quennevais Parade, St Brelade



Gorey Post Office, Grouville



St John's Central Stores, St John





CPA Holdings Ltd

Parts of Floors 3,4 and 5 + 20 car parking spaces





Shell UK & Petroleum

Land at La Collette



No comments: