Rent Control, Prop. 10, and the Law of Unintended Consequences

American Thinker ^ | 10/26/2018 | Adam B. Summers

[SeekAndFind]

Rent control is a classic example of the law of unintended consequences. When Californians scan their ballots for the November 6 election and consider Proposition 10, which would allow local governments to impose and expand rent control laws, they should consider the long-term harms the measure would inflict on housing quantity, quality, and affordability.

Rent control is a textbook example of a price ceiling, in which prices are capped below market rates (i.e., where supply and demand are left free to interact). As those Econ 101 textbooks will show you, many more people will demand housing at these lower prices, but fewer landlords will be willing to provide them at those rates. This leads to a shortage of housing, which only exacerbates the affordability problem. Furthermore, diminished landlord profits and a glut of prospective renters lead to less investment in maintaining properties and offering amenities, thereby reducing the quality of rental housing.

This is well understood among economists. Though they struggle to agree on many issues, an astonishing 93 percent of economists in a 1992 survey of American Economic Association members agreed that "a ceiling on rents reduces the quality and quantity of housing."

And yet, here we have Prop. 10, which would roll back a 1995 law that curbs rent control. The Costa-Hawkins Rental Housing Act prohibited local governments from implementing rent control for housing built after January 31, 1995. It also exempted condos and single-family homes from rent control laws and allowed landlords to bump prices back up to market rates once a tenant left.

Santa Monica, one of the early adopters of rent control, is champing at the bit to double down on the policy if Prop. 10 passes, and property-owners and developers have taken notice.

[Innovative]

So it should be NO on Prop 10?

Did I read it right?

[Ohioan]

Social Reform: Confusion & "Unintended Consequences"

[reg45]

The bicoastal actors want rent control just like they had in New York City.

[I want the USA back]

It’s the law of “don’t give a damn about consequences”. It’s easy to foresee the consequences of this kind of law, but they don’t care. The left hates property owners and is doing everything it can to end private property - first by limiting its use, then by seizing it where possible.

[aquila48]

“
So it should be NO on Prop 10?

Did I read it right?”

That’s right, No on 10!

[Sergio]

bkmk

[eyeamok]

local governments want to impose high development fees and extract concessions from developers to pad city coffers and get others to pay for their priorities.

I should have my Grading permit within a couple weeks, filing for building as soon as I get it. By the time I have all the Necessary Permits in Los Angeles County to put a Normal House on My 10 Acres, I will have spent $50,000. JUST IN PAPERWORK!

[hanamizu]

I will have spent $50,000. JUST IN PAPERWORK!

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Just to cheer you up a bit. The county I live in in Missouri requires no paperwork whatsoever to build a house on my own property. To coin a phrase, “We don’t need no steenking permits.”