I’m not a political pundit, but I’m guessing that yesterday’s despicable assassination attempt on Donald Trump increases the likelihood that he reclaims the White House.
That’s probably not good news for trade policy (though Biden has been just as bad), but it will be very good news for housing policy.
Not because of what Trump plans to do, but rather because it would eliminate the risk of Biden imposing nationwide rent control.
I’ve written previously on this issue, mostly to explain why it’s an insanely stupid idea. Indeed, when writing about rent control in the past, I’ve used words like “horrid” and “lunacy.” And let’s not forget “folly.”
It is the triumph of public choice over common sense and economic literacy.
Sadly, President Biden put personal ambition over the national interest a couple of days ago when he called for nationwide rent control
To put it mildly, the Committee to Unleash Prosperity was not impressed by the President’s vote-buying gambit.
Speaking of wacko ideas, the Biden administration is now touting national rent control. God help us. If there is ANY economic issue that virtually all economists agree on, it’s that rent control limits the availability of affordable housing, increases homelessness, and fails to help the poor. No one bothered to tell the nutcases in this White House.
Here is what Joe said yesterday: “We’re going to make sure that rents are kept at 5% increase in corporate rents for apartments and the like. Homes are limited to 5%.” Assar Lindbeck, the late left-wing Swedish economist who for many years chaired the committee that awarded the Nobel Prize, famously said: “In many cases rent control appears to be the most efficient technique presently known to destroy a city–except for bombing.”
By the way, Biden isn’t the only politician considering this wretched policy.
The Wall Street Journal editorialized in April about a plan for statewide rent control in New York. Here are some excerpts.
You have to marvel at the enlightened economic thinking of New York politicians. Gov. Kathy Hochul and her Legislature are hashing out a deal as part of the state budget that would impose universal rent control… Democrats are now pushing so-called Good Cause Eviction standards that would establish a de facto cap on rent increases in what are now market-rate apartments.
They want to classify rent increases that exceed 3% or 1.5 times the consumer-price index, whichever is higher, as “unreasonable.” Landlords couldn’t evict tenants who refuse to pay more. …Extending rent control to market-rate apartments will…discourage new housing. Are Democrats in Albany trying to precipitate a local banking crisis by spurring massive write-downs on apartment buildings? Their plan could make New York housing uninvestable. …Every time you think Albany Democrats can’t do more economic damage, they come up with something worse.
What’s most disappointing about the actions of President Biden and Governor Hochul is that I’m sure their economic advisers have explained that rent control would be a disaster.
- Deterioration of existing rental units.
- Withdrawal of some rental units from the market.
- A decline in building new rental units.
The bottom line is that rent control is a form of price control. And we have 40 centuries of evidence that price controls don’t work.
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