Posted on 12/08/2002 7:55:53 PM PST by TLBSHOW
Make Room for Daddy Government
The vast majority of government regulations result in restrictions on individual liberty that flush valuable resources down the toilet. Consider the case of an 85-year-old landlord in Ithaca, New York. Let’s call her Mrs. T. to protect her from the long arm of the local government. Mrs. T., like many older widows, does not make use of a large portion of her home. Hence, she chooses to rent out space in her house to college students so as to supplement her income. Each year, she engages in private voluntary arrangements with students who choose to live there. Mrs. T. rents out a third floor apartment (occupied by me), five rooms on the second floor with a common kitchen facility, and one room on the first floor. The first floor renter shares the second floor kitchen. Mrs. T. resides on the first floor as well, in her own separate apartment.
Sounds like a great arrangement, right? Renters and landlords entering into free exchanges and signing contracts that make all parties better off. Unfortunately, this story does not have a happy ending. The government, like a drunk uncle at Thanksgiving, ruins everything.
During this summer’s housing inspections, city bureaucrats informed Mrs. T. that new city regulations would require a few changes in how she did business. Under new local law, Mrs. T. cannot rent out her first floor room without giving the renter access to her own apartment’s kitchen and bathroom facilities. Why? Government regulations say that in order to protect the “rights” of the handicapped, homeowners cannot rent a single room bundled with a kitchen on another floor if there is a kitchen available on that same floor. Hence, if Mrs. T. wanted to rent the first floor room, she would have to permit a college student to traipse in and out of her first-floor private apartment.
Second, city officials informed Mrs. T. that if she wished to rent her first floor room, she would have to provide a parking spot for that renter. Why? A new bizarre regulation requires that if a first-floor room is located sufficiently close to parking facilities, the landlord must provide parking.
Why are these regulations in place? These laws were enacted to protect renters from big, bad, oppressive landlords. But let’s consider the impact of these policies (which are, as usual, quite different from the intent of the policies).
The parking regulation does not fully protect the consumer because the landlord can alter his behavior in response. First, if there are few housing substitutes to the renter, the landlord can pass much of the parking cost to the renter in the form of a higher monthly rent. Second, if the parking cost is too high, the landlord can simply choose not to rent the room. Instead, she can turn it into a sewing room or something.
As for the “same floor kitchen” regulation, this policy clearly imposes a tremendously high cost on a landlord who cares about her privacy. Again, she has two choices -- she can choose to alter her behavior in response to the law by either not renting the room, or raising the rental price sufficiently so as to compensate her for the cost of lost privacy. (Actually, there is a third option -- she can choose to violate the law and take her chances that she will not be caught and fined severely by the city.)
So, how did Mrs. T. respond to these government regulations? Because the costs of compliance were so high, she chose to leave the room vacant. That vacant room is an example of what we economists call “deadweight loss.”
“What’s will all this economics jargon, Sabia?” you ask, “Talk to us in plain English.”
Deadweight loss simply refers to the valuable resources that are wasted as a result of tampering with the free market by preventing private voluntary exchanges. Mrs. T. was willing to rent the room for $400/month without access to her kitchen and without providing a parking spot. There is at least one student on campus who would have been willing to pay $400 to live there. If one student could have signed a contract to rent the room, both that student and Mrs. T. would have been better off.
Unfortunately, the city government would prefer to put both parties in handcuffs and lead them to jail rather than let them form a private housing agreement. Once again, Big Government is trampling on individual freedom in the name of protecting us from ourselves. And, as usual, the government is hurting precisely those people that it claims to help.
Each day, as I walk out of Mrs. T.’s house, I pass by that vacant room, shake my head, and wonder: When will Americans start taking property rights and individual liberties seriously? That vacant room is the perfect metaphor for what may become of the American economy if we continue to permit Big Government Democrats and Republicans to regulate every aspect of our lives.
The question at hand: Will it find a mate to breed with?
You know, it honestly amazes me that anyone is in business now with all the garbage business owners have to put up with.
Oh but of course, if the busness is big enough we will make concessions, even bail them out with tax dollars when bad things happen to them. Little old lady's on social security? If they don't have a lobby, a union to make noise or coffers of campaign cash then screw em'
Mrs. T. does not own nor operate a "rental business".
She merely rents rooms within a private dwelling.
The ordnance should not apply in the same manner as it would for someone in the business of rental property.
She should be able to recieve a "waiver" of conditions for room rental within a privately owned residence.
This might require addressing the city council to solve the situation by amending the code, or granting the waiver under special circumstances.
While this statement is true, it is not true in the City of Evil since there is not a single elected republican in the city. And more often than not, no republicans even appear on ballots. It is usually Rat vs. Green.
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