The Rent-Policy Debate Is Too Damn Stupid

T here is almost no subject — not even Modern Monetary Theory! — that inspires toxic stupidity quite like the subject of rental properties.

The New York Times has brought its subscribers a video (because some things are, in fact, too blisteringly stupid for print) about a so-called tenants’-rights bill under consideration in the state of New York, a daft little sliver of propaganda put together by Jeff Seal, “a comedian, visual journalist and member of the Lower Manhattan chapter of Democratic Socialists of America,” as the Times puts it. That description is just terrific — no Upper West Side socialists here, comrade, we only want to hear from the socialists in Tribeca and Greenwich Village! Socialist comedians must perforce work with some pretty edgy material: “A funny thing happened on the way to the gulag . . .”

The bill would effectively impose rent control on all properties, capping rent increases at 3 percent per year or 150 percent of the increase in the Consumer Price Index, whichever is greater. It would forbid landlords from evicting tenants for most reasons other than nonpayment of rent, and would also forbid evicting tenants for nonpayment of rent in the case of a rent increase exceeding the cap. That is old-fashioned stupidity, of course, the defects of price controls being very understood in the economics literature.

The new, slightly more interesting stupidity is the argument made in favor of these price controls. The idea, as the socialist comedian and the activists he talks to make clear, is to prevent landlords from declining to renew leases for reasons having to do with business rather than some offense on the part of the tenant. Indeed, the first sad story they tell is of a family that is being forced to move, along with everybody else in the same building, because the owner of the building wants the place vacant for a gut renovation and sale. This bill, the activists say, would stop landlords from doing that.

Conservatives often point out that bills of this kind tend to prevent investments in housing. It takes a downtown-socialist comedian to defend such a bill because it would prevent investments in housing.

One expects that downtown socialists will have pretty high standards for their own housing arrangements (the median price of a home in Tribeca sold in December was $3.8 million), while the proletarian beneficiaries of their patronage must, for reasons of social justice, live in slums, with the law effectively forbidding major improvements to rental properties.

Socialists living within walking distance of Odeon would have you believe that such questions of investment are only the concern of grubby little landlords too besotted by greed to appreciate the fullness of the utopian vision: that housing may be considered, in the words of this idiotic Times video and a hundred Bernie Sanders speeches, a “human right.”

It is the question of rights that raises the stupidity here from the ordinary to the superlative kind. The economics is pretty simple: There are x housing units available in New York, and a considerably smaller number of very desirable housing units, and declaring a “human right” in housing will no more exnihilate housing into existence than declaring a “human right” in cupcakes will solve your problem if you have 20 children and three cupcakes. It is the investment in new and better goods that is precisely what is needed — and that is what this law will, its advocates promise, prevent.

Our socialist friends are a little funny about rights. They do not think much of property rights when it comes to the people who actually have a right to certain property — the people who own that property — but they would attempt to secure justice by creating ersatz property rights for tenants, a right to hold and to use property they do not own.

A simpler and more secure solution for renters who wish to have a property right in their homes would be — see if you can follow along now, comrades! — for them to buy homes instead of renting them. That may seem impossible if all you know is the condo market in Soho, but even in New York City it is possible to buy a modest home for a modest price, in the Bronx and Staten Island and in the parts of Brooklyn south and east of the bits where the fashionable young white people are. There is more to New York City than its most expensive neighborhoods. And there are more choices still in the greater metropolitan area. The great difference between the highly desirable and less desirable parts of the city is, of course, that businesses, including rental operations, have invested in the desirable parts. That is how they became desirable.

There are all sorts of legitimate reasons to rent rather than to buy. But the thing about renting a property is that you do not own it — that is the essence of renting, and its attraction, too: Renters do not have to come up with down payments and take on mortgage debt, pay property taxes or property insurance (directly; of course, some share of these expenses ends up in their rent), or deal with the hassle of selling a property if they decide to move. They also do not face the possibility of financial loss on a property investment — you would not know it to hear the Soho socialists talk about it, but people do lose money on real estate, fairly often. Just ask the dumb-ass vulgarians who thought they were going to get half a billion dollars for that grotesque mansion-cum-convention center in Los Angeles.

The solution to scarce housing is more housing. The solution to poor-quality housing is better-quality housing. These things are not free, but they can be abundant — if you allow investment to make them abundant.

More is more. Even a socialist comedian ought to be able to understand that.