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The benefit-cost ratio of housing supply subsidies looks terrible. And the state of research is even worse.
Currently, the American public school system is a sprawl-generating machine: urban public schools are less appealing to middle-class parents than suburban public schools, causing parents to move to suburbia. This result arises from school assignment laws: because students must attend school in the municipality of their residence, residents of the most diverse municipalities (usually central cities) must attend diverse schools. By definition, diverse schools have lots of children from disadvantaged backgrounds. Because children from disadvantaged backgrounds often learn less rapidly than middle-class children, these schools quickly get a reputation as “bad” schools, causing middle-class parents to flee to suburban schools that are more socially homogenous. The common progressive answer to this problem is to fund urban schools more generously: this strategy has not, when tried, succeeded in bringing middle-class parents back to urban schools. For example, in 1990s Kansas City, federal courts forced government to fund urban schools far more generously than suburban schools: nevertheless, test scores barely budged and urban schools continued to lose middle-class and white parents. Even successful urban charter schools (such as New York’s Harlem Success Academy) have failed to bring back middle-class parents. A more market-oriented solution to the problem of sprawl-generating school systems is to break the link between residence and schooling, so that city residents would not be limited to urban neighborhood public schools. One possible option is some form of a voucher system. Under the purest form of a voucher system, parents who choose to avoid public schools would be given public funds to pay the cost of private schools. Under such a system, parents would have little reason to avoid city neighborhoods: they could stay in the city, and their children could attend private schools for the same amount of money that they would spend on public schools (that is, zero). Such voucher systems […]
Welcome to the final post in the series discussing the consequences of rent control. Thank you to the subscribers who have patiently awaited each new post. I hope everyone found it enlightening. If you haven’t read the entire series, you can catch up with these links: Rent Control Part One: Microeconomics Lesson and Hording Rent Control Part Two: Black Market, Deterioration, and Discrimination Rent Control Part Three: Mobility, Regional Growth, Development, and Class Conflict Conclusion Rent control is not just a simple price control setting the price at which willing renters and landlords are permitted to do business, it is much worse. It is a coercive act that gives landlords no legal option, but to rent to a tenant against his will, often at a financial loss. Rent control adds a non-voluntary burden to landlords which deepens over time because landlords do not have the option to rent to a tenant at below market rates. Not only does rent control cause huge distortions in the housing market, but the burdens fall disproportionately on the poor and underprivileged people it was intended to benefit. Although particular people are able to live with the comfort of low rent payments, even those renters will see their living conditions deteriorate as landlords neglect repairs and maintenance. As the situation gets worse, middle class residents are able to move away, leaving behind the poorest residents who have become reliant on the reduced rent. In effect, rent control grants property rights to renters, that originally belonged to the original property owners. Rent control becomes a redistribution of wealth to rent control tenants away from apartment owners, market apartment renters, and newcomers to the area. Nonetheless, over time the quality of life decreases for all residents of a city where rent control is imposed. Solutions So, it […]