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Tag rent control

Links

1. Systemic Failure praises Gov. (again) Jerry Brown’s efforts to do away with California’s redevelopment agencies and “enterprise zones” (there’s a euphemism if I’ve ever heard one), which the author claims promote autocentric development with public funds. He then cites a few examples of redevelopment agencies pushing such plans in San Jose. If he can come up with that many in one city, I can’t even imagine how much damage they’ve done throughout the whole state. So far I’m liking Jerry Brown’s second act. 2. A very interesting Wikipedia article about a controversial Brooklyn-based developer. 3. One Staten Island councilman wants to use the dreaded environmental review against bike lanes. 4. An article about the Toronto condo boom. I’d like to know more about this: But perhaps the biggest demographic that will continue to drive sales this year is the investor market, both local and international. Mr. Lamb says there are few developers building rental towers any longer, in part due to the city’s rent control laws, so investors hold the key to rental accommodation. He says it’s not uncommon for 40% of a building to be owned by investors, with most rentals situated below the fifteenth floor because they are less expensive than those with a brighter view. Mr. Myers estimates 50% to 60% of downtown condo units are owned by investors who rent them out.

New Years link list

Behold, your first link list of 2011! 1. The automobile may officially in decline (very good article!). 2. Interesting parallels between China and its HSR intellectual property disputes and post-WWII Japan and Korea. More here. 3. Fred Barnes writes a stupid article for the Weekly Standard (“The road to hell is paved with bike baths”), and Jarrett Walker responds with a treatise on “coercion” (“We are the libertarians!”). 4. I forget that although rent control has been thoroughly discredited in the real world, NYC developers are still grappling with it. Vornado and another developer had to shell out tens of millions to break the rent control grip on a Central Park South building they bought, with 15 rent controlled tenants receiving payouts of around $1.5 million each. 5. Vancouver is loosening its grip on the street food market, while Stephen Goldberg is trying to create a one-stop shop for getting NYC restaurant permits/licenses/certificates/inspections. 6. The market-defying schemes that liberals come up with would be amusing if they weren’t so horrifying. Read here as they puzzle over why excess luxury condos built in NYC during the boom couldn’t easily be used as affordable housing (Vancouver redux), and watch out for the part on the third page where an organization called “Right to the City” advocates “using eminent domain to seize vacant residential buildings and turn them into affordable housing.” 7. Niagara Falls’ decades-long megaproject failures. The article ends on a positive note, citing federal money for a new train station and grants for a wine bar and a concert hall, but I wonder if anyone in Niagara Falls ever bothered trying to loosen up the parking restrictions and maybe upzone a few blocks.

Weekend links

1. Lydia DePillis responds. I’m all for upzoning only(/mostly) poor neighborhoods if that’s all the extra density we can get (though here at Market Urbanism we’re kind of utopians – we don’t care much about political feasibility), but I’m not nearly as optimistic about inclusionary zoning as she is. At its worst it’s a tool for anti-growth suburbanites to kill new dense development while seeming like they care about the poor, and at it best it’s a misguided tax on developers of multifamily units that helps only those resourceful and connected enough to get themselves a rent controlled apartment, which is then subsidized by the neighbors who didn’t manage to get one. 2. Philadelphia eases up on the parking minimums, but parts of Center City and (all of??) Old City, both of which have incredible transit access, will still require 1 off-street space for every three units of new construction, which seems like a lot more than they have now. 3. Vancouver contemplates raising its height limits. Of course, all new towers will have to meet higher-than-LEED Gold standards – god forbid anyone should acknowledge that density is, in and of itself, good for the environment. 4. Jersey City looks like it will get its High Line, but the question now is, how much development will be allowed around it? 5. One NYC councilman wants to impose rent controls on commercial landlords. The “Small Business Survival Act,” he likes to call it. 6. Tysons Corner scores a huge new development with a 33-story tower and a “European styled esplanade” in front of the new Tysons Central Metro station, while the Lower East Side debates kinda sorta maybe thinking about developing seven acres of parking lots near the foot of the Williamsburg Bridge. 7. Hipster Runoff, the hipster blog of record, […]

Enlightened blogspam

I’ve always said that some day spammers are going to become so creative in their filler content that it actually becomes better than the median good-faith commenter. Well, that day has finally arrived! From some Romanians spamming for a Bucharest car rental service on two articles on rent control from a few years back: Since under rent control the price is set and there are many applicants, a landlord has the incentive to choose tenants based on other factors. A landlord will more carefully examine applicants’ credit history and income, which a good landlord should do, but lends toward biases against younger applicants. A landlord may decide renting families is less desirable, or may prefer to rent to attractive young females. Often times, racial preferences have influenced renting decisions, which typically worked against minorities. Thus, rent control can exacerbate segregation problems because landlords choose not to rent to people who would change the demographics of an area. …and this one: The best way to end it is to phase it out gradually, by only ending rent control for future rental units. this will increase incentives to build new housing units while not increasing incentives from current renters to oppose the legislation. Both snippets appear to be cribbed from Adam’s article on rent control on FreedomPolitics.com. Pretty impressive for automated blog spam! So if you’re ever insane enough to want to rent a car in Bucharest, here’s your place!

Undead Ideas: Rent Control

In these days of economists constantly debating the right way to revive the economy, it seems like there is no way to find consensus among economists.  Economists don’t spend much time debating the issues they agree on, and to them, rent control is about as dead an issue as the earth revolving around the sun.  In 1992, 93% of American and Canadian economists surveyed agreed with the statement “A ceiling on rents reduces the quantity and quality of housing available.”  Opposition to rent control among economists spans the political spectrum from Milton Friedman and Walter Block to leftist Nobel Laureates Gunnar Myrdal and Paul Krugman.  In fact, it was the socialist Swedish economist Assar Lindbeck who famously said, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing it.” (Assar Lindbeck, The Political Economy of the New Left, New York, Harper and Row, 1972, p. 39) Never underestimate opportunistic politicians when they smell blood in the water.  With housing prices already falling, politicians want to be seen as champions of the little guy and do something for “affordability” with one side of their mouth, and force housing prices to “recover” with the other.   With the economy in disarray, even widely discredited schemes such as rent control are making a comeback in politician’s playbooks of idiotic moves that please certain constituents. Rent control was implemented twice on a national scale in the United States.  Rents were first frozen during the difficult years of World War II, and frozen again in 1971 as part of President Richard Nixon’s wage and price controls intended to curb inflation.  After Nixon’s wage and price controls expired, many cities kept some form of rent control intact. Could President Obama resurrect an undead Richard Nixon to implement […]

My Article at FreePo on the Resurrection of Rent Control

The Orange County Register’s new site, Freedom Politics just posted an article I wrote for them on rent control.  Here’s a snippet: In these days of economists constantly debating the right way to revive the economy, it seems like there is no way to find consensus among economists.  Economists don’t spend much time debating the issues they agree on, and to them, rent control is about as dead an issue as the earth revolving around the sun.  In 1992, 93% of American and Canadian economists surveyed agreed with the statement “A ceiling on rents reduces the quantity and quality of housing available.”  Opposition to rent control among economists spans the political spectrum from Milton Friedman and Walter Block to leftist Nobel Laureates Gunnar Myrdal and Paul Krugman.  In fact, it was the socialist Swedish economist Assar Lindbeck who famously said, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing it." The article is part of a series called “Undead Ideas” and I’m told the article is supposed to feature a humorously hideous illustration of a zombie Richard Nixon, which is the reason for the Nixon joke.  I will share the illustration once it is public.     Could President Obama resurrect an undead Richard Nixon to implement nationwide rent control in the face of the impending stimflation?  There’s a 93% chance his economic advisors wouldn’t let him do such a thing.  However, Nixon’s undead corpse has been spotted mumbling "I am now a Keynesian" in places like California and New York City where bad ideas never seem to die. I actually thought of the word “stimflation” on my own, but I checked and learned I wasn’t the first to think of it.  The domain stimflation.com had just been reserved last week… […]

NY Rent Control Revival

In an act of pure legislative idiocy in the face of overwhelming consensus among economists against rent control, the New York State Assembly started the ball rolling to strengthen rent regulation. NY Times: The Democratic-led Assembly passed a broad package of legislation designed to restrain increases on rent-regulated apartments statewide. The legislation would essentially return to regulation tens of thousands of units that were converted to market rate in recent years. In addition, the legislation would reduce to 10 percent, from 20 percent, the amount that a landlord can increase the rent after an apartment becomes vacant; limit the owner’s ability to recover a rent-regulated apartment for personal use; and increase fines for landlords who are found to have harassed their tenants as a way of evicting them. The legislation would also repeal the Urstadt Laws’ provision that in 1971 effectively took away most of New York City’s authority to regulate rents and transferred it to the state. Opponents of the legislation are concerned that the New York City Council, known for its pro-tenant leanings, would enact laws that are unfavorable to landlords. Expect some amazingly ignorant quotes from legislators while this is debated: Linda B. Rosenthal, an assemblywoman who represents the Upper West Side, said that unless rent-regulation laws were changed, middle class people were at risk of being driven out of the city. Actually, rent control drives out the middle class, making housing only affordable to the rich and beneficiaries of subsidies and rent controls. New housing will be nearly impossible for middle class tenants to find. Plus, for those who favor one particular class of people over others, rent control increases class tensions… “Pretty soon we’re going to end up with a city of the very poor and the very rich,” Ms. Rosenthal said. “Our social fabric […]

Could NY Democrats Revive Rent Control?

New York State’s Assembly is now in Democratic control.  On many legislators wish list is to end the vacancy decontrol provisions that allow landlords to remove a unit from rent control if a tenant moves out and the unit rents for more than $2,000 per month.  (for those of you not in New York, apartments over $2,000 per month is actually almost all apartments in Manhattan and desirable locations of Brooklyn & Queens) Crains – Change in state Senate control could hurt landlords “Roadblocks to considering such legislation have been removed,” says Ms. Rosenthal, who represents the Upper West Side. “This will be at the top of many people’s agenda come January.” Of course, this is going to scare the crap out of landlords and renters of market-rate units. “With all of the current uncertainty, why would you throw another obstacle in the way of even more investment in housing in the city,” asks Steven Spinola, president of the Real Estate Board of New York. Mr. Spinola is also confident that Senate Democrats will not act quickly on housing laws. “They’re going to have enough trouble dealing with fiscal problems,” Mr. Spinola says. Maybe our wise legislators will take the time to learn about the microeconomics of rent control…

The Moral Case Against Rent Control

In Market Urbanism’s four part series on rent control, I avoided the topic of the morality of rent control, as I intended to address the economic issues and leave the morality to others. Thankfully, J. Brian Phillips of the Ad Hoc Committee for Property Rights is an expert on the subject. In his blog, he linked to the recent Retail Rent Control post, and took the time to address the moral issue: But the real issue isn’t political. The real issue is moral. A large part of the public sees nothing wrong with forcing others to provide for their wants and desires. And there is a steady stream of politicians all too eager to propose laws to grant them their wishes. They think that their wishes can somehow transform reality, that if they pass a law with the intention of creating affordable widgets, affordable widgets will result. They think that politicians are nothing more than genies who can grant their wish simply by writing a law. It doesn’t work that way. Reality is not malleable to one’s wishes. He makes plenty of good points, so I recommend reading the whole post. He concludes: Each individual has a moral right to live for his own happiness. He has a right to the fruits of his labor. He has a right to pursue his values without intervention from others, so long as he respects their mutual rights. Human beings are not sacrificial animals. Also, here’s another another article on the morality of rent control: Why Rent Control is Immoral by Michael S. Berliner, Ph.D. The morality issue belongs as a prominent part of the rent control discussion, but is seldom heard among all the progressive anti-market rhetoric.

Retail Rent Control

Thanks to Bill Nelson for tipping me off to the article from The Villager (NYC): Retail rent control? A city councilmember planned to introduce a bill this week that will require small businesses and landlords to submit to arbitration in negotiating lease renewals if both parties can’t agree on a fair rent. The far-reaching measure, sought by Upper Manhattan Councilmember Robert Jackson and deemed by some as a form of commercial rent control, would set regulated increases not subject to landlords’ whims. The language of the proposed legislation — which mirrors a similar bill introduced in 1988 that fell one vote short of Council approval — looks to preserve small businesses in the current commercial landscape by prohibiting both short-term lease renewals and “rent gouging by greedy landlords.” According to the measure, lease renewals would be set at a minimum of 10 years unless otherwise agreed upon, and arbitration would only be triggered if either party disputes the law’s set rent-increase rates. Those rates, the proposed plan indicates, allow for no more than a 3 percent rent increase the first year; no more than a 15 percent increase by the last year of the lease over the previous lease; and no more than 3 percent incremental increases each year of the lease. The legislation would be applied on a case-by-case basis to all commercial tenants across the city, including manufacturing businesses, nonprofit organizations, performing arts and theater groups, retail establishments, service businesses and professional medical offices. When asked about the measure’s chances of success, Jackson’s chief of staff, Susan Russell, said she believes “the provisions are reasonable,” but acknowledged the language is subject to tweaking. “I think that this is something that’s worth sitting down at the table and talking about,” she added. Supporters claim that, in the current climate, […]

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