Okay here’s how the business model works. And before we start, know that these numbers are estimates with the barest of research, the basic interaction is the same though. There’s a TL;DR, but how we get to where they can make these demands is important.

I need X amount of money for operations. That’s desk staff, maintenance, back room staff, property tax, the remodel fund, and executives. Once I cover that amount I’m good to go. Now lets say I have 100 units to rent and about a million in yearly expenses. I need to cover about 90k a month. So at an average rent of 1k I need to fill 90/100 units just to cover costs. This is obviously a situation that makes apartment complexes heavily compete for residents. Most people are moving in the late summer and having a bad move in season can mean cut backs during the entire year which then causes a death spiral as you can’t properly compete for residents in the next move in season.

So landlords are incentivized to find a higher average rent somehow. In the above situation they are forced to waive many move in requirements. But if they can operate in a pricing cartel they can raise prices without worrying about being undercut. If they can get average rents to 2k a month then they only need 45 apartments out of 100 filled to meet costs. Now they can’t just do that, most states have a max rent raise cap of 10 percent per year for tenants already there. This is where that remodel budget comes in. On average they’re going to remodel an apartment every 6 years, (15 apartments a year) So in 6 years your rent can go from 1,000 to 1,771. Then they’re going to remodel that unit and raise the price to 2,500 instead of 1,948.

In the same time period inflation will generally account for 2 percent a year, (we’re not going to include once in a lifetime events here). At 2 percent a year, and being extremely generous to meet inflation with raises in employee pay, that million turns into something like 1.1 million. meaning my monthly expenses are now ~91,500. but instead of heavy competition for units I can now meet cost with half of my complex unfilled.

TL;DR Once an apartment complex reaches the point where half the complex can be unfilled and they can still meet cost they can ask almost whatever they want for people to move in. They throw gilding and marble into their office and say only the best people are allowed to live in their 600 sq foot apartments with the shitty combined washer/dryer, no dishwasher, and nearly no storage space. (extra storage is available for a fee, near your unit for a higher fee) It’s merely a matter of how much money they want to finance buying more properties to add to their ability to manipulate prices. And that’s why they can demand you make 9,000 dollars a month in markets like San Diego. and if that’s too onerous they can always waive that requirement. They can even lower prices on a per tenant basis if they’re in the right kind of situation that requires it. Without a tenant union nobody knows if everyone is paying the listed price. So if they have a listed price of 3,200 and they have 95% of the income they want then they can easily offer a lower price to get that last 5%, just using a few more units.

The real problem people are missing is how far this can go. And it’s bad, like really bad. If we look at company towns we can see people went into debt to their employer for housing and food. Now imagine I own an apartment building, and I own the shops and counter serve food places at the bottom of the building. Once rents are high enough I can offer the “don’t go homeless deal”. You sign your paycheck over to me, I give you a reasonable stipend from it and you get 3 meals, and an apartment. Don’t worry about your car payment, we offer shuttle service to your job, the bus station, and the airport. In return you don’t go into debt and you don’t go homeless. As long as you have a job anyways.