Here’s a recent New York Times story:
11,000 Will Die Waiting For Transplants This Year
The actual figure may be closer to 43,000. These deaths are caused by a government law that prevents monetary compensation for kidney donors. And this makes the following subhead a bit hard to swallow:
People on the organ wait list say it’s time for the government to step in
It would be as if the New York Times thought the government should “step in” to deal with the housing problems in New York City. Oh wait:
Behind New York’s Housing
Crisis: Weakened Laws
and Fragmented RegulationAffordable housing is vanishing as landlords exploit a broken system, pushing
out rent-regulated tenants and catapulting apartments into the free market.
How might the New York government step in? The NY Times reports that there’s a new rent control bill that looks likely to be signed into law:
“I’m in shock. I think many of us in my industry are in shock,” said James R. Wacht, president of the firm Lee & Associates and a board member of Real Estate Board of New York, the industry’s leading trade group. “It’s a lot worse than we anticipated.”
The bills announced on Tuesday night by the Democratic leaders of the State Senate and the Assembly would abolish rules that let building owners deregulate apartments and close loopholes that permit them to raise rents.
The legislation would directly impact almost one million rent-regulated apartments in New York City, which account for more than 40 percent of the city’s rental stock, and allow other municipalities statewide beyond New York City and its suburbs to adopt their own regulations.
Research suggests that the long run effect of rent control is to make housing more expensive. I imagine this bill is putting a big smile of the face of economic development officials in the state of Florida.
PS. Perhaps the North Korean government could “step in” to address the shortage of food in that country.
HT: Frank McCormick
READER COMMENTS
Benjamin Cole
Jun 15 2019 at 1:30am
The root cause of NYC housing costs is property zoning and other regulations that stifle new supply. The same thing is true along the West Coast and some other regions.
Rent control is a palliative, not a cure.
But even libertarians are afraid to take on property zoning. The lack of any meaningful traction on dezoning—nor prospects for ever dezoning— America’s cities make rent control a reasonable palliative. (I understand that you get better allocation of resources without rent control, but also the current zoning-system system is successful class warfare from the top down).
I keep hoping libertarians will put on the front-burner issues that can raise living standards for the employee-middle class, such as unzoning property, decriminzlizing push-cart and truck-vending, or getting the Fed to target much lower U3 unemployment rates.
The employee-class needs to see that free-markets work for them.
See this link. Maybe we see AOC in the White House. Deservedly.
https://angrybearblog.com/2019/06/housing-and-young-people.html
Thaomas
Jun 15 2019 at 8:53am
I agree. The weakness of Libertarianism as an approach to policy is that it seldom extend beyond pointing out the down sides of specific policies proposed by others without offering less bad alternatives. Rent control and minimum wages are not just random interference in the market by people who have no idea a the negative consequences. They are sub-optimal attempts to transfer income to specific groups of people.
This would have two good effects: it might over time get some less bad policies adopted and it would put the lie to the the idea that Libertarians simply oppose downward income transfers period.
Zeke5123
Jun 15 2019 at 11:13am
The demand to have a “less bad alternative” is the do-something fallacy. Public policy, much like medicine, should have as a first rule: do no harm.
Doing nothing is preferable to doing something that worsens the situation. Therefore, pointing out the new proposal will be pareto inefficient is perfectly acceptable.
Taleb’s via negativa needs to be accepted.
Benjamin Cole
Jun 15 2019 at 9:58pm
Thaomas: Sadly, it is worse than that.
US libertarians breathe fire on rent control and the minimum wage, but generally go mute on property zoning and the routine criminalization of push-cart or truck-vending. Now, what does that tell you?
There is an old saw, that “Marxist analysis in practice hits the bull’s eye, but Marxist medicine is poison.”
And waaaayyyy out in right-field, well actually out of the ballpark in the fringes of the parking lot hiding in some shrubs, there may be a few sparse libertarians asking why the “Leviathan,” that is the US federal government, is responsible or involved in the safe shipping of oil-tankers through the Persian Gulf. Should not the owners of the oil-tankers run their own gunboats or minesweepers and so on? The oil-industry does not have enough money to hire a private Blackwater Navy?
Thomas Hutcheson
Jun 16 2019 at 6:48am
Agree in some cases doing nothing could be best, but if pointing out that proposal x has costs> benefits would be more effective if less bad alternatives are considered and rejected. Same goes in reverse. Why not propose a less bad alternative to existing policy even if it too falls removing all distortion?
BC
Jun 16 2019 at 12:07am
“The weakness of Libertarianism as an approach to policy is that it seldom extend beyond pointing out the down sides of specific policies proposed by others without offering less bad alternatives.”
The only way this statement could possibly be true would be if you only consider government interventions to be alternative policies. It should be no surprise that libertarians don’t propose alternative government interventions. Libertarians do, however, consistently advocate all sorts of market solutions to problems including, contra Ben, loosening zoning restrictions and loosening licensing restrictions on food trucks. Typical debate between statist and libertarian:
Statest: “We” (implicitly government) need to do something about this problem. Here are some government interventions that are something.
Libertarian: Those interventions will have all sorts of unintended consequences. We should follow this market-based approach instead, which will harness the distributed information necessary to solve the problem and which also preserves people’s choices and liberty. Market approaches have lifted billions out of poverty by solving just this sort of problem.
Statest: I love markets, but I want “fair” and “smart” markets so we can save capitalism from itself.
Libertarian: What do you have in mind?
Go back to (1) and repeat multiple times. After several cycles go to 6.
Statest: Well, since “we” (implicitly government) can’t just do nothing and no one has proposed any alternative (implicitly government) solutions, I guess we’ll just have to implement my proposed government interventions.
Thaomas
Jun 16 2019 at 9:53pm
Let me try again to get through why posts like this (ones on minimum wages are even worse) get on the nerves of neo-liberals, and it’s not just calling us “Statistics.” A proposal like rent control does not just drop down from Statist Central as a way to vent a little hate for markets. It comes out of some kind of objective like wanting to reverse a trend in the relation between income of low income people and rents. an argument that in the long run it will exacerbate the problem for some people is fine as far as it goes, but if THAT is the objection then why not suggest some different policy that will exacerbate the problem for fewer people of even ameliorate the rent-income problem such as allowing a lot more development of rental properties and reducing the cost of transportation from lower-cost areas and the central areas where rents for poorer people are unaffordable or a tax on rental income to finance rent tax credits for low income people, or something else.
Scott Sumner
Jun 15 2019 at 12:59pm
Ben, You keep saying things like this:
“But even libertarians are afraid to take on property zoning.”
Which are wildly out of line with reality. Libertarians are some of the strongest opponents of these sorts of regulations. Not quite sure why you keep making these inaccurate statements when people clearly explain that you are wrong.
And rent control is not a “palliative”, it’s one cause of the housing shortage problem.
Benjamin Cole
Jun 15 2019 at 10:05pm
Scoot Sumner;
Your present post does not mention property zoning, but mentions rent control.
I do not think your post in this regard in unusual in libertarian circles. but rather the norm.
BTW, many cites (such as Los Angeles) do not rent control new construction. The problem is the city is maxed out under zoning law—it is a criminal act to build more housing in many regions of Los Angeles.
In the case of Los Angeles, rent control is not the problem, but rather property zoning.
Mark Z
Jun 16 2019 at 12:43am
Ben, it’s even worse than that. Scott didn’t mention pushcart vending either, or the opioid epidemic or drug resistant pathogens or the widespread problem of argon poisoning. Does he not care about any of those things? Surely, if he cared about them and disapproved, he wouldn’t go a single post without mentioning them. Typical libertarian, always turning a blind eye to what really matters.
(this is sarcasm if not apparent)
Benjamin Cole
Jun 16 2019 at 7:02pm
Mark Z—
Yes, I detected a note of sarcasm.
The fact remains, in many cities new construction is not subject to rent control , while property zoning remains. It is literally a criminal act to build housing in most parts of Los Angeles, while new construction is not subject to rent control.
So, what is holding back construction of new housing in Los Angeles?
In Los Angeles and most other cities, the root cause of the problem of exorbitant housing costs is property zoning and should be mentioned more prominently than rent control.
Libertarians are ill-advised to continue their carping about rent control, without first mentioning the ill consequences of property zoning.
Scott Sumner
Jun 16 2019 at 1:14am
Ben, In blog posts I frequently mention the need to reduce zoning. Surprised you don’t know that.
Benjamin Cole
Jun 15 2019 at 10:01pm
Amy Willis: Thanks for your comment, and I will take a look. I am pretty close-minded on the topic, and against all property zoning.
Alan Goldhammer
Jun 16 2019 at 9:07am
Affordable housing is a myth of epic proportions, at least in our area. Downtown Bethesda, MD is awash with building cranes and all new construction is high end condos or apartment buildings. Were we to sell our house which is only about a mile or so from the downtown area, it’s doubtful that we could afford anything more than a one bedroom or small two BR condo with the proceeds from our home sale. Even housing that is being built further out is costly when transportation costs are figured in. We don’t seem to have zoning issues that other areas face as the county planning board seems to approve everything in spite of the NIMBYs objections.
Phil H
Jun 17 2019 at 10:26pm
This is funny and on the nose, but perhaps slightly unfair to “government” in the kidney transplant example. It’s not just government that stands in the way there, there’s a popular disquiet about organ donorship as well. Apart from anything, it’s a violation of the legendary oath to “first do no harm”. Government is the channel through which this popular (probably wrong) feeling is expressed, but it’s probably not the cause.
That case is significantly harder to make in the case of rent control, Sumner is right on that one.
Mark Z
Jun 20 2019 at 4:03am
Well, government is rarely the original cause of anything. Rather it gives potency to otherwise relatively impotent bad but popular ideas, e.g., turns ‘I don’t like it when you do …’ to ‘you are hereby sentenced to X years in prison for …’
Comments are closed.