Monday, 13 June 2016

Some stupid just never dies

Conor Dougherty writes in the New York Times that,
After years of punishing rent increases, activists across Silicon Valley and the San Francisco Bay Area are pushing a spate of rent control proposals, driven by outrage over soaring housing prices and fears that the growing income gap is turning middle-class families into an endangered species. Those campaigns, if successful, would lead to the largest expansion of tenant laws since the 1970s.

Rent controls are just a big amount of stupid. As Swedish economist Assar Lindbeck once quipped
"next to bombing, rent control seems in many cases to be the most efficient technique so far known for destroying cities"
Dougherty continues,
Nevertheless, a group called the Mountain View Tenants Coalition is collecting signatures for a voter initiative in hopes of putting rent control on the November ballot. One of the group’s leaders and its chief spokesman, Evan Ortiz, is a 29-year-old Google employee who works in ad sales.
Thomas K. Bannon, chief executive of the California Apartment Association, a landlords’ group, said his members were mobilizing a statewide response and planning to spend millions of dollars — he would not estimate exactly how many millions — to beat back the initiatives one city at a time. The members’ message: Don’t blame landlords. Blame cities for making it so hard to build new housing. (Emphasis added.)
The highlighted sentence is the important one, as anyone in places like Auckland should be able to tell you.

Dougherty adds, inline with Lindbeck's view, that,
Economists have an almost universally dim view of rent control because it does nothing to attack the underlying problem here, which is that more people want to live in the Bay Area and Silicon Valley than there are housing units to put them in.
Increasing rents are just a sign that there is a problem on the supply side of the market. The question to ask is Why? And the people to ask the question of are, usually, the local government.

No comments: