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Topic: Rent control (Read 1826 times) |
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Casey
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Rent control
« on: 2003-10-26 23:40:46 » |
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Approve or disapprove? Your comments are appreciated.
I, for one, favor the concept and saw it benefit 2 communities in the greater Boston area; those being Cambridge (home to several esteemed universities and numerous scientific-based research facilities and companies) and Brookline (home to one of the country's highest ranking school districts). Obviously, it didn't meet with the approval of landlords and real estate developers. But, it did afford both communities a more diverse population, school districts, and thriving businesses despite the complaints by many (real estate developers and landlords; and with them, a small fraction of community leaders) that property taxes were not affording those cities ample resources. After rent control was ended those communities began to suffer from gentrification. Old age pensioners, lower income families, and people in their early 20's were soon forced to leave those communities because of the rise in rental fees and monthly rents. All in all, the overall effect in those communities has been the closure of many local businesses, the combined effects of yuppification (meaning that many young urban professionals have effectively displaced those who benefited from rent control) and gentrification (the overall population has become homogenized regardless of race, gender and ethnic differences).
Regards,
Casey
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Mermaid
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Re:Rent control
« Reply #1 on: 2003-10-27 09:58:55 » |
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Rent controls were introduced by the govt as a measure to combat raising rents in cities. Why do rents soar? As land and housing in urban areas become scarce, landlords increase rents to exploit the growing demand. While a sensible rent control policy is desirable, rent controls in places like nyc is just plain ridiculous. The wisdom of rent control is shattered when the rent is not enough to pay the property taxes, costs of maintaining and repairing housing units. Also, in a controlled rent environment, many people cannot find housing units as people stay too long in their old digs to milk the full worth of rent control. Note that rent control does not always mean that the rents are kept under market levels. In some places just outside san francisco(not necessarily san francisco, but in the bay area), rent control is in the form of making it illegal to rise the rent by more than 5% for an old tenant.(or something like that..in theory) This is probably a more sensible form of rent control. Rent controlled apartments have little investment potential and if it is imposed on an entire neighbourhood, it will affect the building of new structures and the upgrading of the rent controlled housing units. When rent control is abolished and rent reaches market values, excess demand for housing units as the old tenants will move out and new tenants willing to pay market rents will move in leading to more efficient use of housing space. Do I approve of rent controls? Not all the time. Can rent controls be effective? Only rarely, but it is possible. I just cant come up with an example off the top of my head.
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simul
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virus: Rent control
« Reply #2 on: 2003-10-28 08:57:24 » |
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Yep, rent control is just another example of the majority (poor, young) justifiably restricting the ability of a minority (landlords) to profit excessivle from what is arguably a public resource (land).
Not once in the history of New York's rent control laws have landlords decided to sell buildings at cut rates. Why? Because the real impact of rent control is preventing wealthy landlords from getting even wealthier at the expense of the local population.
It also helps prevent "boom and bust" cycles. Following gentrification, there is generally a mass exodus from an area...which is what happened in Dallas.
What makes an area popular in cities is the young people, artists, and the diversity...
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First, read Bruce Sterling's "Distraction", and then read http://electionmethods.org.
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David Lucifer
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Re:Rent control
« Reply #4 on: 2003-10-28 11:13:22 » |
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We had an interesting chat about rent control in #virus yesterday
<http://tinyurl.com/sp6v>.
One question that came up is do laissez-faire capitalists think
that the free market can do no wrong? If it can go wrong,
what can be done if anything?
Casey suggests that rent control is justified because he has
seen it benefit at least two communities. I don't think anyone
would disagree that it benefits some members of society,
but the real question is who pays for those benefits?
Should the landlords be coerced by law (threat of force)
to pay for these benefits? How is that fair? If forced charity
is necessary (and I'm not saying it is), wouldn't it be better
to do it with rent subsidies paid for by tax revenues to at
least spread the cost across society?
David
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simul
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virus: Re:Rent control
« Reply #5 on: 2003-10-28 12:23:17 » |
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"Should the landlords be coerced by law (threat of force)
to pay for these benefits? How is that fair?"
It's just as fair as tenants being forces to pay rent. Land is only owned by landlords because a consensus of people agree that our "money system" works. of course the end result of a completely feree market is tyranny by the few who happen to control the capital. Of course, the reverse is also true - too much socialism stifles innovation. What is needed is a balance between the two.
"rent subsidies paid for by tax revenues to at
least spread the cost across society?"
I agree that this is a far better distribution model. Rent subsidies can be given out based on some sliding income scale - a fine socialist correction for overcapitalization.
What is "overcapitalization" ? That's when resources (land) are capitalized on (rented) to the point where they become controlled by a disproportinate few (land "lords") and result in an artificial scarcity. For example, many landlords in NY keep buildings empty in order to keep prices high. This can only occur when a landlord owns a high percentage of buildings in. Agiven area. For example, trinity church owns 60 pct of the real estate on the lower/west side... Many of then are left empty.
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First, read Bruce Sterling's "Distraction", and then read http://electionmethods.org.
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Blunderov
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RE: virus: Re:Rent control
« Reply #6 on: 2003-10-28 12:55:17 » |
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Erik Aronesty
> Sent: 28 October 2003 1923
<snip>
of course the end result of a completely free market is tyranny
> by the few who happen to control the capital. Of course, the reverse
is
> also true - too much socialism stifles innovation. What is needed is
a
> balance between the two.
</snip>
[Blunderov]
Strongly agree with this and many of your other posts.
Question: is taxation not a quintessentially socialist concept - the
redistribution of wealth?
Best Regards
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simul
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RE: virus: Re:Rent control
« Reply #7 on: 2003-10-28 13:28:54 » |
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"Is taxation not a quintissentially socialist concept?"
Only when it is structured properly.
Fuedal lords would tax the poor to finance armies which would enforce their own wealth.
Taxes are like any other tool.
Graduated taxes, such that the wealthy are taxed oin gereater proportion to the poor is an appropriate correction for capitals natural tendancies.
When the money is used for education, social services, and to foster small business growth - it restores balance to the system.
As our future transforms, anyone will be able to be hyper-intelligent, strong, and long-lived. We are eroding the importance of "genetics" from the equation of value. We are slowly replacing it with "memetics". That is: the information and ideas a vector has are far more important than their physical form.
More importantly, we recognize that the ideas they have are there largely by accident. To condemn someone as "lazy" merely because the "personal motivation meme" has not properly taken root is ludicrous.
Thus we design a system whereby people are offered the opportunity, motivation and education required to memetically reengineer them for contributing to society. While doing this, we must be mindful nev er to use force, as to do so would be to abandon our original premises and the stability of the system.
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First, read Bruce Sterling's "Distraction", and then read http://electionmethods.org.
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kirksteele
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Re: virus: Re:Rent control
« Reply #8 on: 2003-10-28 14:22:41 » |
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Let's throw some real world data into this - debate, shall we.
http://www.huduser.org/rbc/search/rbcdetails.asp?DocId=343
and here's one from north of the border.
http://www.huduser.org/rbc/search/rbcdetails.asp?DocId=519
enjoy
kirksteele
David Lucifer <david@lucifer.com> wrote:
We had an interesting chat about rent control in #virus yesterday
.
One question that came up is do laissez-faire capitalists think
that the free market can do no wrong? If it can go wrong,
what can be done if anything?
Casey suggests that rent control is justified because he has
seen it benefit at least two communities. I don't think anyone
would disagree that it benefits some members of society,
but the real question is who pays for those benefits?
Should the landlords be coerced by law (threat of force)
to pay for these benefits? How is that fair? If forced charity
is necessary (and I'm not saying it is), wouldn't it be better
to do it with rent subsidies paid for by tax revenues to at
least spread the cost across society?
David
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This message was posted by David Lucifer to the Virus 2003 board on Church of Virus BBS.
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Kharin
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Re:Rent control
« Reply #9 on: 2003-10-28 15:10:58 » |
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Quote:"Question: is taxation not a quintessentially socialist concept - the
redistribution of wealth?" |
Am I correct in assuming that you are referring to progressive taxation i.e. income taxation rather than flat rate taxation (or other taxes) such as that used by Hong Kong and Russia? If so, the answer is 'not quite.' You are of course quite correct that progressive taxation has been favoured by socialist administrations, but the concept predates socialism.
Income taxation was first introduced between 1799 to 1816 by the Tory Prime Minister William Pitt in order to raise funds for the Napoleonic Wars. It was abolished after the war and reintroduced by another Tory faced with a defecit; Sir Robert Peel. Later the Whig Gladstone and the Tory Disraeli failed to repeal income taxation and it became permanent. The US followed a similar course in 1864 and for similar reasons; the civil war. In both of these cases we are speaking of measures that were originally temporary; the reason they eventually became permanent tended to owe as much to the fact that they were highly efficient means of funding the state during a period when the modern centralised state we know today came into being.
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Blunderov
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RE: virus: Re:Rent control
« Reply #10 on: 2003-10-28 15:33:28 » |
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Kharin
> Sent: 28 October 2003 2211
> "Question: is taxation not a quintessentially socialist concept - the
> redistribution of wealth?"
>
> Am I correct in assuming that you are referring to progressive
taxation
> i.e. income taxation rather than flat rate taxation (or other taxes)
such
> as that used by Hong Kong and Russia? If so, the answer is 'not
quite.'
> You are of course quite correct that progressive taxation has been
> favoured by socialist administrations, but the concept predates
socialism.
>
> Income taxation was first introduced between 1799 to 1816 by the Tory
> Prime Minister William Pitt in order to raise funds for the Napoleonic
> Wars. It was abolished after the war and reintroduced by another Tory
> faced with a defecit; Sir Robert Peel. Later the Whig Gladstone and
the
> Tory Disraeli failed to repeal income taxation and it became
permanent.
> The US followed a similar course in 1864 and for similar reasons; the
> civil war. In both of these cases we are speaking of measures that
were
> originally temporary; the reason they eventually became permanent
tended
> to owe as much to the fact that they were highly efficient means of
> funding the state during a period when the modern centralised state we
> know today came into being.
[Blunderov]
Thanks for the informative reply. I see that now it might or might not
be a 'socialist' measure depending on how it is applied.
Best Regards
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Ophis
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Re:Rent control
« Reply #11 on: 2003-10-28 18:56:24 » |
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Quote:Lucifer: One question that came up is do laissez-faire capitalists think
that the free market can do no wrong? If it can go wrong,
what can be done if anything? |
To me, as a proponent of laissez-faire capitalism, the question is oddly formulated and cannot be answered as-is. The "free market" doesn't do anything in itself, people do things; the free market is simply an abstraction of what happens when people are free to interact with one another. So I will reformulate the question like this: In a laissez-faire capitalist environment, can people do no wrong?
The answer is obviously that regardless of the environment, people do wrong things all the time. People do things that are wrong to themselves and things that are wrong to others.
Do landlords want to abuse their powers over their tenants? Yes. Do large corporations like Wal-Mart want to exploit their providers and their employees? Yes. But then again, what do tenants and employees want to do? They want to get as much out of their landlords and their employers as possible.
The point is that landlords need tenants as much as tenants need landlords. Wal-Mart need its employees and customers as much as they need Wal-Mart. The perceived "inequality" resides in the fact that for most of us, as individuals, our power is diluted when negotiating directly with a landlord or a corporation.
This said, anyone who's been through negotiation training will agree that size, power, and money are not always useable as leverage in a negotiation. If you have unique skills, if you have public support, if you have an alternative, etc. you can have leverage over a more powerful opponent.
One of the most effective leverage that individuals have against large corporations is voting with their dollars. If you don't agree with Wal-Mart's policies, don't shop at Wal-Mart. If Wal-Mart's policies are truly horific, many individuals will stop shopping there and you'll see Wal-Mart adjusting its policies accordingly. This happens all the time with with Wal-Mart, Microsoft, McDonald's, etc. One of the main reasons why these companies became giants is precisely because they were able to listen to the majority of their customers.
Now, if you think that Wal-Mart's blue logo is designed in a particularly offensive shade of blue, and you happen to be the only person on earth to think so, you just won't have much leverage against Wal-Mart. If there are others like you, you are quite welcome to form an association in order to gain visibility and improve your negotiating position (your leverage) against Wal-Mart. What you are NOT welcome to do under freemarket capitalism, is go convince the right individual in Washington who has control over the police and the army to coerce Wal-Mart to change its blue logo. Notice how in this scenario, "equality" has just gone out the window; this is because we brought in a new kind of individual (the politician) who is NOT equal to other individuals.
The mistake made by statists is to think that the government represents the people against these larger entities. The fact is that politicians are a class of their own. They are just as oppressive to individuals as they are to corporations.
When you introduce an entity who is granted a monopoly on the use of force, you suddently have something to negotiate with that has the ability to distord the distribution of power. The government doesn't skew this distribution in the corporation's interests, it doesn't skew it in the individual's interests, it skews it in ITS OWN interest. Sometimes the government's interests coincide with that of corporations and sometimes it does with that of individuals.
There will always be that scale of wealth and power in society, with people at the top and people at the bottom. What needs to be protected is the distribution of opportunities across this scale so that people at the bottom can take a step up, and then another, and another, to climb up the latter.
This distribution of opportunities is most even in societies that have the most economic freedom (least amount of governmental intrusion in the economy). The poorest countries in the world are those where totalitarian governments keep an iron fist around economic activity.
To wrap all this up, I'd say that company owners, directors, managers, and landlords must ultimately answer the need of their customers if they want their organization to survive. There certainly is corruption amongst the rulers of these organizations (Enron is indeed a prime example) but if the corruption becomes significant, the company will ultimately die.
There is no such limit on governmental organizations. Politicians do have limited mandates but there is no threat to the survival of their organizations to compel them to act in the "public's interest". In addition, politicians offer an additional corruptive incentive to entrepreneurs and special interest groups who make use of it to gain power without having to produce value for customers.
Can "the free market do no wrong"? Of course not, but the government has been doing a lot worse.
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prometheus
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Where's the fire?
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Re:virus: Rent control
« Reply #12 on: 2003-11-01 06:52:27 » |
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Quote from: simul on 2003-10-28 08:59:00
It was houston, not dallas... Sorry.
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Could you provide some more context for this. If you are referring to the boom and bust in the 1980's I would argue that oil prices were much more significant for this phenomenon than gentrification.
In fact this is the first time that I have ever heard that gentrification of an area as being a problem. Gentrification tends to benefit low income home owners (yes, they do exist) in that it increases the value of their property. Therefore when they decide to sell and retire to Florida they will have more of that <sarcasm>evil</sarcasm> capital to subsist on.
As I understand gentrification it is the artists and "interesting people" who first move into an area and make it cool and start the process of increasing property values by taking cheap run down areas and fixing them up. This starts a virtuous cycle that benefits local businesses by attracting higher income people to the area to live there, spend money. Your take on gentrification has been unkown to me until now. Perhaps you could provide some background.
Thanks
Prometheus
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referent
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Re:Rent control
« Reply #13 on: 2003-11-01 10:30:19 » |
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There seem to be quite a few issues tangled together here, and I am not sure if I am missing the forest for the trees. In this light, I thought it might be a good idea to lay out the details of what I have extracted from the discussion so far, and see if anyone cares to comment on it; perhaps to set me straight, lol.
1. Economies are notoriously complex dynamic systems of interaction, and because of their tendency to occasionally shift in a major way, rent control is a useful buffer to mediate the effect on individuals (tenants) during periods of excessive change or instability. There are other times, during more healthy and stable economic conditions, during which the rent control buffer would have a dampening effect severely out of proportion with any conceivable gains.
2. It would appear that even under the best conditions, our ability to predict the actual behavior of that economy is very tenuous. When introducing a strong and specific economic force, such as rent control, I don't believe our predictions can be assumed to get better, and probably get quite a bit worse. I say this because applying a large static influence on a highly dynamic system (at least in theory) should force MANY other components to a new equilibrium level, which would seem likely to distort our predicitions based on previous models.
3. Due to our tenuous grasp on the actual behavior of economy, applying rent control has had mixed results. Each side in this argument can draw on a number of examples supporting their position.
4. It has been offered that perhaps the underlying problem is a result of using the wrong tool to fix the problem, and perhaps we are using a sledgehammer where a scalpel would function more effectively. Applying another dynamic influence (new rent-subsidy in some form?) that can balance off the existing dynamics, rather than trying to directly modify the existing influences by limiting them programmatically (rent control), may be the way to go. There would still be an alteration in the relative equilibrium, but the effects should be much less far reaching into unrelated areas of the economy (at least the direct "shockwave" of repercussions).
Am I following this fully, or am I missing something? Perhaps my own experiences are causing me to jump to conclusions about the intent of the previous contributors to the topic.
All comments are welcome!
-referent
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