LETTERS TO THE EDITOR
WHILE I share Sean Thompson's concern about high rents (Letters, June 12), I do not share his solution. He advocates rent control because ``the only thing keeping someone from moving here is the price of housing.'' Rent control will worsen this problem by creating a shortage of affordable housing and increasing costs of rentable dwellings.
A Cato Institute study of classified ads in rent-controlled cities reveals that "very few moderately priced rental units are actually available. Most advertised units are priced well above the actual median rent. Yet in cities without controls, moderately priced units are universally available.''
Rent control creates a housing shortage. People living in rent controlled housing do not allow the unit to go back on the market. Either they do not move, or they transfer the low rent to friends and family. Artificially low rents allows renters to afford more spacious housing than they would in a free market. Builders respond to this by building larger, and hence, fewer, dwellings on their land. Lastly, some new housing will not be built because it will not be profitable to rent it.
Rent control is not only bad economically, it is ethically bankrupt. To advocate government control of rent is to advocate government control of people.
- Brian Schwartz, Palo Alto
Letter as written (more stats):
While I share Sean Thompson's concern about high rents in the Bay Area (Letters, June 12), I do not share his solution. He advocates rent control because "the only thing keeping someone from moving here is the price of housing." Rent control will worsen this problem by creating a shortage of affordable housing and increasing costs of rentable dwellings
A Cato Institute study of classified ads in rent-controlled cities reveals that "very few moderately priced rental units are actually available. Most advertised units are priced well above the actual median rent. Yet in cities without controls, moderately priced units are universally available." The study reports that "in Philadelphia, the nation's fifth largest city, the most common advertised rent, the mode, is between $450 and $500--below both the advertised and census medians. The two cities with strict rent control are glaring exceptions to this pattern. In both New York and San Francisco, advertised rents peaked at $2,000--more than triple the U.S. Census median rent for each city."
Rent control creates a housing shortage in the following ways. People living in rent controlled housing simply do not allow the unit to go back on the market. Either they do not move, because other rents are so high, or they transfer the low rent to friends and family. Artificially low rents allows renters to afford more spacious housing than they would in an free market. Builders respond to this by building larger, and hence, fewer, dwellings on their land. Lastly, some new housing will not be built because it will not be profitable to rent it. Landlords who cannot make a living by renting at the legislated cost will not rent out their units at all. Of course, some landlords will skimp on maintenance costs to recoup the lost revenue.
The greedy landlords Mr. Thompson decries are products of rent control. They can rent out dwellings in unregulated "shadow markets" at well above market value because of the housing shortage rent control creates. Rent control decreases supply, so demand and price increase.
Rent control is not only bad economically, it is ethically bankrupt. To advocate government control of rent is to advocate government control of people. To forbid people from trading goods ad services through their mutual consent is to violate their individual rights. I do not look to government to force people to do what I want them to do. I hope that others will treat me with the same respect.
Brian Schwartz