Up Sucker Creek

Up Sucker Creek
Photo Courtesy of the Lake Oswego Library

Tuesday, June 13, 2017

Belief in the impossible is bad policy

A good description of the idiotic, self-destructive, self-absorbed, magical thinking of supporters of rent control (euphemistically called "rent stabilization ").  

Seattle Times, May 7, 2015. By Richard S. Davis 

There is never a time for rent control

Rent control has been proven to have adverse effects. Seattle should take a pass. 

The same people who believe you can increase the price of labor without dampening demand now argue that you can lower the return on property owners’ investment without reducing supply. It’s time for another walk through the looking-glass world of Seattle politics. Like the White Queen, progressive activists here make a habit of believing six impossible things before breakfast.

While economists may quibble about the effects of minimum-wage hikes, there's no such debate about rent control's adverse effects.  Fifteen years ago, economist Paul Krugman called rent control one of the best-understood and least controversial economic issues.  A 1992 poll of the American Economic Association found that "a ceiling on rents reduces the quality of housing."  A 2012 survey of leading academic economists reached the same conclusion.

If the topic were climate change, scientific consensus would be invoked to end the debate.

Yet, the idea gains political traction as rents rise, along with concerns about income inequality and gentrification. Renters are the majority of the population in nine of the nation’s 11 largest cities, according to The Wall Street Journal. That’s also true in Seattle. The city recently became one of the 10 most-expensive cities for renters, according to the U.S. Census Bureau, posting the steepest rent increase in the nation between 2010 and 2013.
Naturally, then, the city’s populist progressives think there ought to be a law. 
Rent control is not just wrong in principle, it’s a violation of fundamental property rights. It also fails to deliver.
Imposing controls that would reduce the quality and quantity of affordable housing in the city would compound, not solve, the problem. Believing the impossible does not make it so.

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