Tag: rent control

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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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crime and punishment general freedom property rights

Rent-Free in Oakland

Covid, rental, eviction, moratorium

The city council of Oakland, California just voted 7-1 to end the town’s pandemic-rationalized moratorium on eviction for nonpayment of rent.

But it’s not over yet.

The moratorium will linger on until July 15. Three years is supposedly insufficient time for tenants to gird themselves to again honor the contract with the persons who provide them with shelter.

And then it still won’t be over.

The council’s slow-walk phaseout comes with a permanent new limitation on what landlords can do. This explains the lone dissenting vote, that of Council member Noel Gallo, who says that the rights of landlords are still being insufficiently protected.

As the text of the legislation passed by the council makes clear, its revision of the city’s “just cause” ordinance further violates the property rights of landlords. In part, the new ordinance provides that any failure to pay rent during the last three years which a tenant can plausibly attribute to the pandemic is sufficient to prevent an eviction, even if not relieving the tenant of the obligation to pay that rent.

Will the reprieve be too late and too little for property owners like John Williams? For the last three years, Williams has been stuck with a freeloading tenant who has been financially able to pay rent but who has refused to do so and refused to move.

The tenant, occupying half of the duplex where he also happens to live, owes him $56,000. And Williams is facing . . . foreclosure.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom too much government

Detonators in Place

rent control, good intentions, government regulations

You must place explosives a certain way when demolishing a building to avoid damaging surrounding structures. But if you just want to destroy, you can forget about such precautions.

Could this be the perspective of those demanding national rent control?

They forget — or ignore — the destruction of living space inflicted by incentive-incinerating rent controls in places like New York City and Santa Monica.

Rick Moran perceives that President Biden is making a “first move toward a radical national rent control law,” telling agencies to find ways to stop rent increases. Biden is doing so at the behest of 50 congressional communists who have implored him to take executive action to save tenants from rising rents.

According to their letter, “rent is too high and millions of people across this country are struggling to stay stably housed as a result.” Meanwhile, landlords are “increasing the rent for their own profit . . .”

Profit? In a market economy? 

Rising rents! Caused by . . . ?

But if you just want to “solve the problem” and have been trained to be heedless of the destruction regulation can cause, you needn’t think about cause and effect — who did what and how and why. In the interventionist mentality, when oil or food or housing prices zoom upwards, only one cause is possible, and it has nothing to do with politics and policies already in place.

Even if the government’s central banks have been zanily pumping up the supply of money and credit while city and state bureaus have been going all-out to hamper and halt production.

That single cause, they contend, can only be the grasping, grabbing, profit-seeking capitalists. You know. The bums who make their riches (when they do) by supplying us with what we need.

This is Common Sense. I’m Paul Jacob.

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Fifth Amendment rights national politics & policies subsidy

The Moratorium on Survival

Bill of Rights, property, law

If only Lincoln Eccles were a property owner in Franklin County, Ohio, instead of Kings County, New York. He’d have more of a chance.

Franklin County is defying the latest national moratorium on evictions. Early in August, caving to pressure from socialist Democrats, President Biden directed the CDC to outlaw the evicting of tenants for another 60 days.

A Franklin County court has announced that the county will not obey the ukase. The county cites a recent court of appeals ruling that disputes the authority of the CDC to impose the nationwide moratorium.

In June, the Supreme Court had narrowly refused to lift a previous moratorium in evictions, even though at least one justice in the majority acknowledged that the CDC had exceeded its authority. Justice Brett Kavanaugh’s exact words: “Yes, this is unconstitutional, but . . . well, okay.” (Fine, not his exact words.)

Property owners have bills too. (Not to mention rights.) The less money they get from a property, the less money they have to maintain it, let alone earn profit.

Lincoln Eccles owns a 14-unit building in Crown Heights. Several tenants owe him rent. One owes $40,000. Which has put Eccles behind on utility bills and property taxes. The boiler must be fixed before winter. 

But Kings County is not defying the CDC.

“At this point they’re just abusing us,” Eccles says. “And it’s some version of slavery to me, forcing people to work and produce a product for free, and there’s no compensation.”

Were one to consult the Constitution, one might find a prohibition about public taking of private property “without just compensation,” but governments throughout the union haven’t been consulting that relevant document much lately.

This is Common Sense. I’m Paul Jacob.

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Towards a Genealogy of Policy

tenement, rent control, New York, de Blasio

If it seems like each new government program is more intrusive than the last, there’s a reason. That last one did not work as planned. So a new one gets concocted to fix its mess. 

The latest? New York City Mayor Bill de Blasio has established a new enforcement bureau, the Mayor’s Office to Protect Tenants, to sic a “new sheriff” on property owners.

“When a landlord tries to push out a tenant by making their home unlivable, a team of inspectors and law enforcement agents will be on the ground in time to stop it,” the mayor explained last week in his latest State of the City Address. 

And he means business, er, government: “we will seize their buildings, and we will put them in the hands of a community nonprofit that will treat tenants with the respect they deserve.”

Well, that cannot possibly go wrong!

But what was the earlier program that put New York in its current situation?

Look to a very old government program, rent control, which New York has suffered under since World War II. 

Rent control protects current renters from rate hikes and the like, sure. But it discourages the production as well as the maintenance of rental properties, which in turn limits supply and ultimately hikes rents for future tenants.

Perhaps even worse, it incentivizes the landlords to boot out tenants while it more than nudges tenants to dig in . . .  even when moving would otherwise make more sense. 

The market thus thwarted, the de Blasios then set up more laws and more policing . . . and antagonism ramps up another notch.

This is Common Sense. I’m Paul Jacob.

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tenement, rent control, New York, deBlasio

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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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