Question about a comment about rent controls.
Howdy from Hattiesburg, Mississippi.
Today I got an email from a fella named James with a comment addressed to me re: rent control. I've pasted it below. I've searced both blogs I contribute to and can't find wtf the comment refers to; I've spent fifteen frikken minutes trying to remember what conversation it came from. I've got nothing.
So James, whichever James in my life you are, could you please be more specific? Email me the text you're commenting on? Is it my notes from the seminar? (If so, it's not my thoughts; it's the thoughts of whoever was lecturing, which should be on the header of the notes.)
I've got a Southern Miss football game to tailgate for, so I'll see ya'll later.
(More later on my observations of Gulfport and Biloxi, MS)
MYSTERIOUS COMMENT:
I don't know where you get the idea that rent controls hurt the poor.
Developers will only build rental housing at the expensive end of the market to maximize their profits regardless of the demand as the past century has proven which is why there has always been a shortage of affordable housing.
Here is some information on Rent Controls from this Tenant site.
posted by Roman at 2:53 PM
2 Comments:
This is a great question for the econ dorks in the room. Just kidding, I've always wanted to be an econ. dork myself, just haven't got around to it yet.
"[If] rents are established at less than their equilibrium levels, demand will exceed supply, and rent control will lead to a shortage of dwelling space...
With shortages in the controlled sector, this excess demand spills over onto the non-controlled sector (typically upper bracket rentals or condos). But this non-controlled segment of the market is likely to be smaller than it would be without controls because property owners fear that controls may be placed on them as well...
As in the case of other price ceilings, rent control casues shortages, diminution of quality, and queues."
By Walter Block, in Economic Regulation.
"A romantic conception of socialism destroyed Vietnam's economy in the years after the Vietnam war, Foreign Minister Nguyen Co Thach said... Mr. Thach admitted that controls... had artificially encouraged demand and discouraged supply... 'The Americans couldn't destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy,' he said.
From a news report in Journal of Commerce, quoted in Dan Seligman, "Keeping Up," Fortune, February 27 1989.
I suppose the lesson has to be relearned.
Take the example of Canada.
They have had a well documented shortage of "affordable housing" going back more than a century.
Developers naturally will build for the high-end of the market to maximize their profits.
In Canada they brough in huge tax incentives both at their federal and provincial governments in the 50's which led to a rental housing boom.
In 1972 all their governments terminated these programs and rental housing construction quickly plummeted. This was years before their provincial governments even brought in rent controls.
And there are many forms of rental regulations which all get labelled as rent controls so one needs to get specific about what law they are talking about when they discuss so-called rent control laws.
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