“In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing,” wrote Swedish economist Assar Lindbeck, a Social Democrat…
https://mises.org/wire/rent-control-history-failure
Governments can and do try to fix prices, but history tells us it never works.
From the price-control dikats of the Roman Empire’s Diocletian, to the wage and price controls of President Richard Nixon, governments have tried and failed.
The historian Edward Gibbon said the Roman Empire imploded owing to economic disasters and less to barbarians at the gate. More recently, President Nixon imposed wage and price controls before the 1972 elections. He was re-elected when they seemed to be working. However, owing to the Watergate scandal, he wasn’t around when his price control scheme failed and dragged down millions of Americans in the disastrous decade-long horror show called stagflation.
New York’s Economic Madness
Yet governments continue to try various kinds of price controls, even though most people with even the barest acquaintance with economic history or basic economics understand they’re the equivalent of economic crack. However, most New York pols, for instance, are economic illiterates.
They support continued rent controls because they are politically popular, at least in the short run. In the case of rent controls, the New York political classes recently extended them. They believe, almost uniformly, that they provide better housing at decent prices. But history and many economists say otherwise.
I believe some pols are privately convinced that they are witchcraft but they are not going to say so because they might then no longer be on the public payroll.
The politics are why New York’s state and city lawmakers have consistently backed rent control laws. That’s even though most economists, both left and right, agree they lead to housing shortages; that they’re a good deal for the minority of people who get coverage while the rest of New Yorker pay excessive rents.
Why Don’t They Work?
Supply dries up. Builders spooked by controls won’t build new units. The minority of those who get cheap rents won’t leave their units no matter what. Turnover rates decline. Most New Yorkers paying free market rents pay through the nose.
If you have a rent-controlled apartment: stay forever. You have cheap rent. If not, be prepared to pay very high housing prices as the housing stock can’t keep pace with demand. The quality of life in the city declines as more and more people pay a high percentage of their income for housing.
“In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing,” wrote Swedish economist Assar Lindbeck, a Social Democrat…
“New York City rent controls,” Samuelson wrote in his economics textbook, “do favor those lucky enough to find a cheap apartment; but they inhibit new private building of low-cost housing.”
Be seeing you
MCViewPoint 