Tag: housing

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free trade & free markets general freedom international affairs

Market Rents Work in Argentina

Argentina, housing, flag, freedom

Markets work and markets for housing work.

This is what the new president of Argentina, Javier Milei, has sought to confirm by means of radically free-market economic policies. He is going as far as he can as fast as he can to make Argentina a freer and more prosperous country.

Can he succeed in the long run?

Many exploiters of the socialist status quo ante are bitterly opposed to his reforms and hope to undo them. We’ve seen before how quickly a relatively anticapitalist administration can kill the freedom-expanding reforms of a relatively procapitalist one.

But at least for now, Milei is proving his point, as witness the market for apartments in Buenos Aires.

The Buenos Aires newspaper El Cronista reports (with the help of Google Translate) that with the end of rent controls, the supply of rental units in Buenos Aires has doubled and prices for units have fallen by around 20%. The paper cites data by the Argentine Real Estate Chamber and the reports of brokers.

Under rent control, by 2023 the supply of rentals had shrunk to just 400 units. “Today we have a stock of more than 800 apartments, and it is growing day by day,” says Alejandro Bennazar, a director at the Chamber.

Eight hundred units is still low given the size of the capital city, but there’s light at the end of the tunnel. Getting rid of the controls caused supply to double instantly. An excellent start.

This is Common Sense. I’m Paul Jacob.

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Location, Location, Dislocation

Yuh-Line Niou, housing, regulations,

“While Lower Manhattan is desperately in need of affordable housing,” writes Yuh-Line Niou in an official statement of her re-election campaign for New York State Assembly, “we cannot pit the need for housing against the need for green space, especially when so many good alternatives are available. . . .”

Assemblywoman Niou (D-Lower Manhattan) is making the case against a housing project in her district. What she is really trying to do is save the Elizabeth Street Garden, a one-acre sculpture garden.

Uh, OK.

I have nothing against sculptures or gardens, but it seems like a strange sort of public space to exist in a high-demand real estate locale like Manhattan.

But you know what is stranger? 

Ms. Niou also supports the notion that “housing is a right.”

Christian Britschgi, of Reason, notes her pickle, drawing our attention to the similar predicament of a socialist city councilwoman on the other side of the continent, in Seattle. “Now, one can reasonably argue that open space is a precious commodity in a city, one that needs to be balanced against the need for shelter,” Britschgi writes. “But it’s hard to argue that while also asserting that housing is also a right that needs to be guaranteed by the government.”

Niou insists that “both need to be protected and expanded,” and somehow thinks the “best way to achieve this is by engaging the community from the start so decisions are made with a full knowledge of community sentiment and impact.” 

Not mentioned? Rent control.

It is almost as if pols have no idea that goals they promote might be exacerbated by existing policies they dare not criticize.

Or even bring up.

This is Common Sense. I’m Paul Jacob.

Yuh-Line Niou, housing, regulations,

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San Francisco Obstructionism

San Francisco, homeless, zoning, housing, regulations

Bob Tillman wants to build a 75-unit apartment building in San Francisco.

He owns the property — a laundromat. He just wants to convert it. But although there are no good reasons why he shouldn’t, city officials and activists opposed to the property rights of developers have been blocking the project. Tillman has spent years and hundreds of thousands of dollars just trying to get started.

His plight “encapsulates the political dysfunction that’s turning San Francisco . . . into an exclusive playground for the ultra-wealthy,” says Reason magazine.

Because of the government’s general antagonism to development, and specific policies such as rent control, much less housing is getting built in the city than would have been possible in a fully free market.

The population is growing quickly, but housing isn’t keeping up. Which results in unnecessarily high rents and housing prices.

None of this is shocking if you understand basic economics. The greater the supply of a good, the cheaper the price tends to be — all other things being equal. That qualification is important. If the supply of oranges doubles but everybody suddenly starts an all-orange-juice diet, orange prices may remain the same or even rise — but less than the price would have risen without the greater supply.

Many factors, including monetary factors, can affect the price of a good. All I’m saying is that if you want the benefits of more housing, including rents that are lower than they would have been without the new housing, you must build houses and apartment complexes.

Stop something from being built and, unfortunately, it won’t be there.

This is Common Sense. I’m Paul Jacob.

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San Francisco, homeless, zoning, housing, regulations
Photo by Mussi Katz

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Accountability crime and punishment folly general freedom government transparency local leaders moral hazard nannyism porkbarrel politics privacy property rights responsibility tax policy too much government

Progress, DC-Style

gentrification, renewall, Washington D.C., corruption, crony capitalism, housing, dirigisme

Is the black, Democratic mayor of Washington, D.C., actually a “racist”? What about the city council, which is 46 percent African-American, 85 percent Democrat, and 100 percent liberal/progressive?

That’s what a lawsuit argues — the DC ‘powers that be’ are racist in their development and housing policies. Filed on behalf of several African-American DC residents, it alleges that Mayor Muriel Bowser and the council have been striving mightily, as the Washington Post reported, “to ‘lighten’ African American neighborhoods and break up long-established communities.”

“Every city planning agency,” states the complaint, “. . . conspired to make D.C. very welcoming for preferred residents and sought to displace residents inimical to the creative economy.”

Nothing that a billion dollars couldn’t make right, of course — for which the plaintiffs ask.

But is gentrification a crime?

As American University professor Derek Hyra told the Post, “Developers want to maximize their return. This is not a conspiracy. This is capitalism.”

But no, this certainly isn’t laissez faire “capitalism.” It could be described as dirigisme — or “state capitalism” or “crony capitalism” or just a bad old-fashioned mercantilism, revised to work at the city level, where governments partner up with particular groups to extract as much wealth for the insiders as they can. Professor Hyra acknowledges that Bowser and the council were “providing subsidies” to bring in richer citizens and push out poorer ones.

Most importantly, we discover yet again that the power politicians claim they need to help the poor, is used to help the rich.

Way to go, “progressives.”

This is Common Sense. I’m Paul Jacob.

 

Note: The mayor is a Democrat and the 13-member council is composed of eleven (11) Democrats and two (2) independents. There are no Republicans.

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Accountability crime and punishment folly free trade & free markets insider corruption media and media people moral hazard national politics & policies porkbarrel politics property rights responsibility too much government

Déjà vu All Over Again

housing, bust, financial, meltdown, Government-Backed Mortgages, jail, punishment, cause

One of the stand-bys of the post-2008 mortgage finance bust, at least from left-of-center policy mavens, has been to ask: why has no banker gone to prison? They played a game of fraud and got rich. What a protected class — Cronyism! Plutocracy! Capitalism!

The why is much easier to understand if you read up on Round Two of the aughts’ boom-bust scenario, as in Prashant Gopal’s coverage in Bloomberg, “Getting Rich on Government-Backed Mortgages.” Gopal spotlights a non-bank mortgage broker, Angelo Christian, who is making a killing selling houses to people with horrible credit, just as happened before 2008.

“Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program,” Gopal writes. “It’s a sweet deal: He gets his nearly risk-free commission. [His client] puts no money down. If things go south, the government ultimately bears the risk.”

So, should he go to jail?

Not really. He’s merely doing Congress’s bidding.

Gopal notes that it is not banks that dominate this round. They are under too much scrutiny. But non-banking loan intermediaries like Mr. Christian are swarming like flies on a cow’s behind.

There’s a problem in Gopal’s account though. “No one is saying the system is close to another collapse.”

Well, plenty of people are saying that.

The Cassandras are just not being heeded.

Of course, they don’t know when the bust will happen.

They just know it will.

This is Common Sense. I’m Paul Jacob.

 

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Photo by Images Money on Flickr.

 

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folly free trade & free markets local leaders moral hazard nannyism property rights responsibility too much government

Housing Horror

Oregon, housing, rent control, urban, planning, low income, land, property rights

Housing in Oregon’s north-central urban region is becoming more and more like San Francisco’s — out of the budgetary reach of huge swaths of average workers.

“The median rental household can’t comfortably afford a two-bedroom apartment in 28 of Oregon’s 36 counties,” Elliot Njus writes for The Oregonian. But it is worst in Portland and the three counties in the region: Multnomah, Washington, Clackamas. 

The findings come from a group called the National Low Income Housing Coalition. Njus quotes Alison McIntosh, of another group, the Neighborhood Partnerships, who not unreasonably concludes that “folks are really struggling to make ends meet.”

Well, yeah. This was predicted, long ago.

The state of Oregon began a comprehensive land-use planning system, decades ago, to prevent urban sprawl. At about the same time the Portland-region’s three major counties began a concentrated effort to . . . concentrate populations within the area. Confine them. Regulate them. Economists and other critics* from the very beginning predicted rising housing costs. And other problems.

Now, of course, the usual groups react in precisely the wrong ways: rent control. The State House in Salem recently passed legislation to uncork rent control. Thankfully for renters, the Senate nixed the idea. 

But we can be sure this proven housing killer (a disaster where tried) will resurface. Common sense (as well as reams of economic research) tells folks how bad an idea this would be, exacerbating the problem it aims to solve.

Alas, some folks look at government more as magic than as just another flawed, human institution.

This is Common Sense. I’m Paul Jacob.

 

* One set of critics can be found at the Cascade Policy Institute, which describes Oregon’s land-use regulatory system as “the nation’s most restrictive” — adding that “every square inch of Oregon has been zoned by government planners, with the result that development of any type is prohibited on most private land.”

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