Rent Control: Punching Bag

Rent control...what a terrible idea:

The trail led to the Badlands.

His name is Bill Golodner, private investigator. Along with partner Bruce Frankel he hunts down absentee tenants of rent-regulated New York City apartments. Golodner's subject was clearing a cool $1,500-plus every month by covertly subletting her digs in Manhattan while holing up in South Dakota. Her fatal mistake: Applying for a license to work in the gambling industry. That caused her true address to pop up in a search of public records.

Score one for the landlord. In New York, evicting a phony occupant makes it possible to increase the rent on an apartment. Almost everywhere else, nothing more is required than a rise in the unit's rental value on the open market.

Martin Fridson isn't breaking any new ground on the failures of rent control, but he's got a timely read up on TCS Daily. Concise and complete, he debunks rent control (for the umpteenth time), giving me a nice set of statistics to add to my arsenal when debating inane "advocates for the poor."

Anyone who has gone to college in a major American city can tell you that rent control is a complete scam. In my own experience, subletting was the least of landlords worries. While many students often secret subletting, it's usually just a room in the house. The larger problem had to be "continuous leasing."

Due to some arcane rule that I never entirely grasped, so long as one member of the apartment re-upped his lease at the end of the year, the landlord is forbidden from raising the rent. Not surprisingly, this fact quickly led to collusion across classes, as seniors recruit a junior to live with them and thus inherit the property for the same price. Most notably, there was a house that theater kids had been continuously leasing for the past seventeen years. Three bedrooms, with an in-house washer and dryer, water and electricity paid: around eight hundred bucks. Within walking distance of USC. The apartment I lived in, which was two thirds the size, with three smaller bedrooms, cost 1,500.

So, rent control, what a joke. My favorite new stat comes near the end of this article:

The ill effects have long since been a staple of introductory economics textbooks. In a nearly unparalleled demonstration of unanimity, 93% of economists surveyed on the matter in the early 1990s agreed with the statement that placing a ceiling on rents reduces both the quantity and the quality of available housing.

Bashing rent control is always worth a read.