The following letter was published in today’s Carmel Pine Cone.
The Monterey city government is walking its citizens into a horrible mess. When I attended the May 30 meeting in which we discussed its proposed compulsory rent registry, I talked briefly to Mayor Tyller Williamson. I told him that economists are almost unanimous in their view that rent controls cause shortages of housing, cause landlords to cut down on maintenance, and discourage new construction.
He replied that he doesn’t advocate rent control but, instead, favors what he called “rent stabilization.”
It’s a distinction without a difference. Rent stabilization is simply a form of rent control because it’s a government limit on rents.
The compulsory rent registry that the Monterey city council is about to vote for will be the first step to rent control. I don’t know if the mayor will regret it but a lot of people in Monterey will.
David R. Henderson
Research Fellow
Hoover Institution
Here’s the 7 hour meeting at which the rental registry was discussed and voted for.
One of the city council members, Alan Haffa, with whom I had carried on a civil email discussion early in the week, voted for the registry after admitting a lot of the problems. Notice what he says at about the 5:22:43 point:
Those of you who are professionals know what the prices are, you know what rents are, but your clients, your tenants may not. So you have the information but they don’t.
I wrote him this morning and asked him how the tenants manage to fill out their monthly rent check without knowing the rents. He has not got back to me.
The pic above shows the effects of long-term rent control in the South Bronx. It began as a temporary measure during World War II.
READER COMMENTS
steve
Sep 9 2023 at 11:08am
Zillow, Trulia, Apartments.com pretty much do the same thing and AFAICT is hasn’t lead to rent control. Each of those do cover a different group of rentals so there might be some value in having one site where they all listed together. I am unaware of such a site. It should be pretty easy to set up. If this could be done for a few thousand dollars it might provide some value to the people of that area but if it cost much more than that I would just let people go look. As an intermediate alternative the city could provide a listing of all the sites like Zillow that cover real estate in their area.
Steve
David Henderson
Sep 9 2023 at 11:28am
You write:
A number of the commenters from the the public pointed that out.
You write:
And that probably explains why a lot of landlords were comfortable with that idea versus having the government do it, having to pay the government for the “privilege,” and having the government fine those who refused or left spaces blank.
You write:
Great idea!
The reason I think Tyller Williamson, the mayor, sees this as a first step to rent control is that when I spoke to him at the May 30 meeting, he had no hesitation in telling me that he favors “rent stabilization.” Why go there in this context if he didn’t see this as a first step?
Richard W Fulmer
Sep 9 2023 at 11:47am
Prices are information. Price controls produce disinformation. Disinformation produces poor decisions and bad investments.
Chris Kramer
Sep 10 2023 at 3:28pm
The mayor & council members voting for this registry and the folks advocating for it keep saying that it is necessary for transparency. Transparency of what? I don’t own. I’m a renter. I don’t know what information it is that I am supposedly lacking, exactly. I know and understand the terms of my lease. If I am looking to move prospective landlords tell me what my rent will be. As far as vacancy, what business is that of the city? This is very Orwellian!
Dylan
Sep 10 2023 at 4:31pm
That information is very valuable to both tenants and landlords when you are negotiating a new lease. My friends that rent in the city and live in market rate apartments generally start researching this information about 3 months before the lease comes up gathering as much local data as they can, which typically means going and seeing several other apartments on the market in person, talking to neighbors to see what their latest rent increase was and what they are currently paying. All to make sure that they can hit the landlord with a bunch of data to start the negotiating and hopefully go down from the 10%+ increase that the landlord leads with.
I’ve got one friend that is particularly good at this, and he’s been incredibly stressed for the last 3 months because all of the data was suggesting that they were going to have a 30% increase this year that they just couldn’t afford, and he couldn’t find any data to counter it. Then the new lease came in with only a 6% increase, which was just shocking to him. But now he’s already stressed about next year.
I haven’t watched the video, so I don’t know why the city council thinks this information isn’t already available and why the government needs to provide it, but the data is certainly valuable.
Chris Kramer
Sep 10 2023 at 6:17pm
Of course, I haven’t presumed that it isn’t valuable. It also kind of depends on what information we are talking about though. This city government is saying that transparency is lacking. But you just described how people already function without a government bureaucracy that costs hundreds of thousands of dollars annually to perform a function for people that they can already perform for themselves. I’m just wondering what the lack of transparency is. I can go out and look at a bunch of rentals and I can price rents very easily. It takes time but it’s not difficult. I’ve done it every time I’ve moved. Also, it’s kind of humorous for a government entity to lecture about transparency.
nobody.really
Sep 11 2023 at 1:12pm
Not following this. If Zillow readily provides the relevant info, why do these friends feel the need to engage in a research project?
I haven’t watched the video. But for the sake of argument, let’s assume that the kind of information published by Zillow is NOT a perfect substitute for the kind of information valued by people in the rental market. I regard information as a public good–permitting almost infinite consumption after the costs of production have been incurred. So if people in the rental market see value in acquiring the relevant information–as evidenced by their willingness to expend resources acquiring the info–would it be crazy for government to act as a clearing house, collecting and publishing the information?
Or maybe this is the kind of info that becomes valuable only because it’s held by the few?
nobody.really
Sep 11 2023 at 1:31pm
Tangentially related: NYT has a story about affordable urban living:
Maybe this story deserves its own post? If so, feel free to delete this comment.
nobody.really
Sep 12 2023 at 3:36pm
See Scott Sumner’s posting.
James Anderson Merritt
Sep 13 2023 at 5:21am
Looks as if the local poohbahs did Hitler’s job for him on this side of the Atlantic.
I am also reminded of tariffs.