Up Sucker Creek

Up Sucker Creek
Photo Courtesy of the Lake Oswego Library

Wednesday, June 14, 2017

"There's no such thing as unaffordable"

Recently I debated a committed progressive (socialist?) about rent control (rent stabilization).  He was adamant to the point of becoming angry and physically upset that his point of view was the only correct way to look at the problem of rising rents.  Maybe  his passion had something to do with the fact that he was French, but I don't think so - there's plenty of passion about the subject here too.

My debate opponent contended that without government controls, greedy landlords would raise rents continuously without end, pushing struggling renters to the brink of insolvency or to the street.

I challenged his logic.  How can anyone charge more for a product than their customers can pay and still stay in business?  No landlord can afford to own rental units that remain vacant because they charge too much.  When the top end of the market is achieved, landlords have to halt rent raises and/or lower rents.

The rent control fan could not see beyond current affairs and his own perceptions of a landlord class that abuses and cares little for his or her tenants.  For him it came down to visceral animis and displaced compassion:  Landlords are always villains and tenants are their captive victims. Logic be damned.

It is scary to think that otherwise
smart people fall
prey to this nonsense and connive to rob people of their businesses, their personal incomes and property rights in order to punish the mythical "evil landlord."  Reaction to mob appeals is frightening.  What will the mob demand next?

If we are not careful, capitalism will be destroyed or perverted in an expanding regulatory hell. When the public claims a direct share in the wealth of private businesses through subsidies or unfair taxes from owners, few people will continue to provide that service or product.  

Unless honest - not biased - political and economic systems, and business fundamentals become part of our educational system, we will continue to see business-busting laws like gross receipts taxes and rent control -- and the mob and society will get what it deserves.

Rent control is illegal in Seattle. Here’s why

KUOW April 3, 2017. Amy Rolph 

The cycle has three parts, and they go like this: Employers are paying high wages, landlords are charging what the market will bear, and developers are building new units for all the people moving here for those high-paying jobs.
“There’s no such thing as unaffordable,” Young said. “If it were unaffordable, no one would buy it. And people are buying it.”
Young said that imposing rules on how much landlords can increase rent is a disincentive for builders, which can result in a housing shortage — the opposite of what you need to create lower rents and home process. Rent control can also create disincentives for landlords to maintain buildings and might make them seek to evict tenants paying disproportionately less than the market rate.
“If you’re going to think of a political solution, the economic consequences might actually be more extreme than the problem you're trying to solve,” Young said.  

No comments:

Post a Comment