Rent Follies
The cost of housing is a perennial hot-button issue for local elections in big cities. In NYCity, Jimmy McMillan ran for mayor, senator, and governor a few years back on a single slogan: “The rent is too damn high!” and formed an eponymous party in furtherance of that bit of populist pap.
The remedies are always the same, and involve various forms of “more government.” Rent controls, requirements that new developments include “affordable” units, subsidies, and other market distortions have been in place for decades, but housing remains scarce and expensive (unless you happen to luck into a rent-controlled or rent-stabilized unit).
Clearly, this approach doesn’t work.
Which means that politicians impose more* of it.
Zohran Mamdani, likely (as of my typing this) New York City’s next mayor, has pledged to freeze rents if he wins. As if taking away the couple percentage points in rent increase that the owners of the million-plus rent-stabilized apartments in NYC is going to suddenly make housing affordable.
Basic economic theory tells us why rent control doesn’t work, but we don’t even need that to offer a real, workable remedy to those enchanted by that shiny bauble.
We have the city of Austin, TX. Austin has been booming in population (more than 10% in the last decade), yet rents have actually been decreasing*. Yes, decreasing.
How? Why?
It’s simple. Government got out of the way. Permitting is streamlined, mandates are few, zoning is not onerous, and NIMBYs have been shunted aside. So, developers have been building units even faster than the population’s growth.
When it is not shackled, weighted down, smothered, or dammed up, the market provides. It provides better than any statist or central planner has or can. Austin is not even remotely the first example of market > big government, but it’s a simple and obvious one that should be comprehensible even by those mesmerized by the socialists’ shiny promises and inviting smiles.
I'm constantly amazed by how naive the progressives are about economics. I got into a debate about this very topic with an old college friend who responded to my comment about excessive government regulation with the retort that I don't object to Prop 13 limitations on property tax increases. Sigh. How does he not understand that limiting the amount the government can tax you for property you already own is not the same as the government limiting how much a property owner can charge to rent their property?
The only issue I see with using Austin as an example is that it’s a $h17h0l3. It’s the San Francisco of Texas, minus the cost.