South Florida Sun-Sentinel: Taxing developers green for cheap homes looks red to mayor
This guy is quite a card. I guess the 40-hour working week “schlocks” in Lauderdale weren’t the ones raising money for his campaign, so screw 'em.
He’s solved the police officer / firefighter / school teacher crisis: Lure them with promises that they can earn money picking up dog shit on their days off! That’ll bring 'em down!
Voters, please send this guy packing to his house on Bimini.
There are a lot of conservatives on this board who see eye to eye with him.
You did see, in the first article you linked, that he’s serving his final term in office? I don’t think this yutz cares about re-election prospects. Heck you even quoted it.
BTW, honest question here: Does rent control or the like ever really affect the whole market? The way it looked to me when I was looking for housing in the NYC area, rent control meant only that certain lucky individuals had rents that were insanely low compared to anyone else.
Oops, I missed where he’s heading out. Glad to hear it.
It’s not that rent controls or subsidized housing aren’t debatable concepts; it’s that he’s calling people who work 40 hours a week lazy and thinks they should pick up dog shit on the weekends to get by.
That’s the thing that free market conservatives would see eye to eye on.
Actually, yes, rent control does affect the whole market. It generally has the effect of raising the average market rent of non-rent-controlled properties. So, while some get rent control, everyone else pays more rent than they otherwise would.
I’m not arguing against rent control. In my opinion, it can be a perfectly valid way to ensure that low-income earners are not frozen out of an area altogether by astronomical market rents. But rent control does have an impact on all rents in the affected region.
Rent control will also lead to a shortage of housing, which in the long term makes the problem worse when the rent controls are lifted. And if they’re not, it leads to long-term distortions in the market which cause real problems.
Rent control is a really bad idea, and so are price controls. Prices carry essential information through the market. Screw with them at your peril.
Well, considering that in NYC, rent-controlled apartments are handed down, now, as family controlled leases, I question the benefit to the population in general. Of course things might change if there were a requirement to keep rent control in a certain fraction of the leased properties in a given market, but as I saw it, it sure seemed that if you hadn’t had family looking for housing (Or better-still, already in the building that just got designated rent control.) when rent control started, you were burned by it.
Again, I’ve never studied the issue other than to have people tell me about rent controlled leases when I was looking for a place, and being told: “Oh, you’d never get one.”
Is it at all linked to income, for example?
Yeah, but working people also provide essential labor for [eyes turned piously heavenward] * the market * [/eyes turned piously heavenward]. I think screwing them is also perilous.
Why is this a bad thing though?
There are some areas in my city where I can’t afford the least expensive house, so I live somewhere else. As most people have to commute to work anyways this is not a problem.
I used to live in a far less expensive area. It was a nice lower-middle class neighbourhood and there were no problems living there, nor did I expect that there would be any problems living there, but the townhouse I owned was old. I wanted something newer. So, I moved. The area I live in now is further out from downtown but, it is where I could afford the house I wanted. I could live in the inner city, but the same house would cost 2-3 times more and have equivalently higher property taxes levied against it. So, I sacrifice convenience for affordability.
Who’d have thought people would have to make such difficult choices in life, huh?
Right, which is why you’ll notice that i said that rent control can be a valid way to help low-income people, not that it always is. There are people in New York, for example, who are in rent controlled apartments but whose income is high enough to pay market rates quite comfortably. There are, on the other hand, people paying market rates who can barely afford to do so, and who would qualify for rent control based on income if it were available.
There are, in fact, requirements in New York regarding the construction of low-income housing, although i don’t know exactly what the rules are, when they apply and when they don’t. A friend of mine is currently in line for a rent controlled apartment in a new building on the upper west side. When the building was planned, one condition of approval was that a certain number of the apartments (i think 15-20%) be reserved for low-income tenants. My friend is actually waiting hear right now whether or not he got the place, and if he does it will be $400 a month for a two-bedroom apartment. I probably don’t need to tell you how insanely cheap that is for New York.
Yes, it is linked to income for newer places like the none my friend applied for. He is a grad student on a very low income, and so’s his partner, and they had to demonstrate how low their income was to even be considered for the cheap place.
For older places where rent control has been grandfathered in, i don’t believe that income is an issue, which is why, as i said above, there are people living in rent controlled places who could actually afford to pay market rent. Also, as you note, some of these rent controlled places become like familyheirlooms, handed down from parents to children, without regard for whether the next generation actually needs low income housing or not.
Well, i guess it depends what type of place you want to live in. Your notion of moving and commuting works in many places without the critical mass of a city like New York. But when a large city genrifies, and virtually everywhere in the area becomes expensive, sometimes rent control is considered a valid way to both help low income earners remain in places where they have lived for a long time, and also to maintain the economic diversity of the city.
Of course, whether or not this is a valid goal is one that people will always argue about, and there are some perfectly reasonable arguments against it. But any argument like this needs to consider exactly what type of city people want to live in. And some people can’t seem to see the connection between different policies and social goals. For example, i’ve heard people lament about how New York (or at least Manhattan) is losing its diversity (racial and economic) and turning into an island of yuppies (i make no comment on the truth or otherwise of this statement). But then some of these same people complain about rent control. What they don’t seem to realize is that, if rent control were removed, a lot of the lower income and ethnic communites that they want to retain in Manhattan might be depleted considerably by higher rents.
Again, i’m not necessarily making an argument either way here, only saying that when we make ostensibly economic decisions, they have social consequences, and we, as a society, need to determine whether the costs are worth the benefits, and vice versa. Which is why i disagree fundamentally with Sam’s assertion:
This elevates the free market and efficiency to some sort of religious sacred cow, something that must be bowed to or face the consequences. That is, in my opinion, a profoundly misguided and naive position.
“The market,” or the invisible hand, does indeed work in the type of ways laid out so well by Adam Smith in The Wealth of Nations, and microeconomic principles such as scarcity, maginal utility, opportunity cost, and equilibrium are excellent tools for understanding the way prices move, and the way they react to issue of supply and demand. But this does not make them gods to whom we must pay obeisance.
Yes, every decision we make to interfere with the market has consequences, and we need to examine closely what those consequences are and weigh them against the reasons we have for interfering in the market in the first place. We need to do everything we can to understand who is affected, and how, by such decisions. But, in the end, the economy is part of society, and is a human institution, and if we decide that the benefits of interfering with market forces outweigh the disadvantages, we should not be prevented from carrying this out by some irrational reverence for the sanctity of market forces.
The prblem with too many people who argue economic policies is that they take empirical information and present it without a thought for the normative issues. They say things like “Rent control introduces distortions in the market and raises the average price of non-rent-controlled properties,” and assume that this will, by itself, be sufficient evidence that rent control is bad. The argument often comes back to the fact that interfering with the market reduces efficiency. But what gets left out here is any consideration of whether market efficiency is, or should be, the overriding goal of a human society. And that is a conversation we need to have when making economic policy.
Now, it might be that even after normative issues of efficiency, equality, social justice, etc. have been hashed out, plenty of people will still come down in favor of letting the market work unimpeded. That’s fine. But to argue for economic efficiency without taking account of the normative issues is, in my opinion, a fundamentally dishonest way to debate economic policy.
“Affordable housing” isn’t rent control.
Think of it as legislating a costly minimum requirement to a bidding developer that has a community benefit. Such as requiring safety standards, or stating that any development must contribute land for a school, or build some extra roads, any one of the other stipulations that local governments routinely impose on developers.
It distorts the market, yes, but it does have beneficial effects that exceed that distortion.
Take the village in which I grew up. Small place, population around 1,000. It carried on in its happy agricultural way for hundreds of years. Then a freeway was built near it. Suddenly it’s commutable for London. A house comes on the market, a premium is paid, the market rises, the prices for property go through the roof. Currently, the average price for a house in this village is $400,000.
Jethro P Farmhand, he and his family having lived there for hundreds of years, marries his sweetheart and they want to settle down. On his mimimum-wage salary, there is no way at all he could even think about buying in the village of his ancestors. (And incidentally, believe me, farm workers do a lot more than 40 hours a week.) If he ever wants to get on the property ladder, the best he can do is move many miles away, get a job in a service industry, and he and his kin are slowly replaced by those who have no connection to the community or its history.
Affordable housing is simply a way of stopping the heart being taken out of communities.
Thank you for saying what I have been trying to say about free market worshippers for a long time, better than I ever said it.
Thanks, jjimm, for pointing out that there are two different concepts at work here – the OP is NOT about rent control – it’s about a set-aside to provide “affordable” housing in the jurisdiction so that the working-class can become homeowners somewhere reasonably close to where their services are needed. And hey, eventually their homes will themselves appreciate.
In case people don’t know, in most cases there’s also a stipulation that the purchaser - who is vetted thoroughly for eligibility - is not allowed to re-sell the house for a set period of time; I believe ten years is the minimum where I’m from.
There’s another social benefit I forgot to mention, in that low-wage earning communities tend do not invest in rented accommodation, in terms of upkeep, respect, or community cohesion. This attitude alters dramatically when the communities actually own such property - leading to a reversal of the “smashed windows” effect.
Also, it’s not like property developers are going to lose anything but a small % of margin on very large profits. They’ll definitely recover costs. If they don’t want to undertake health and safety minimums, building community centers or AH units, they needn’t bid. Nobody’s forcing them to do anything here.
Around here, it’s not a matter of moving a few more miles out. Pretty much the whole state is unaffordable. And yet the city still needs low-wage workers/seniors/students. So we get people living in unsafe conditions. I know a girl who used to spend $400 a month to rent a front porch. Others rent closets, get involved in sex-for-rent schemes, etc. This just isn’t good for a city.
As for “handing down” rent controlled property- this happens with owned housing already. Why is it so different?
And I see it the other way around - talking about economic policy by always intermingling your ‘normative’ issues makes about as much sense as talking about the scientific method by insisting we always debate it in the context of whether enough girls study science. You simply muddy the discussion.
Look, what I’m saying is that messing with prices is a particularly bad way to interfere in the market, because prices are a critical piece of the functioning of a market. You want to help poor people get housing? Fine. Give them a rent subsidy. That will also distort the market, but it won’t break it in fundamental ways like price caps will.
Politicians don’t like rent subsidies as much, because then they have to come up with the money, which means they have to raise taxes, which makes the whole arrangement much more explicit to the people. Instead, they can play the game by attacking ‘greedy developers’, put some price caps in place (which costs them nothing), and everything pats themselves on the back on how much they’ve ‘helped’ the poor.
Then developers leave the market, housing doesn’t get built, the housing that exists stops being maintained adequately, and eventually the shortages lead to a lifting of the price cap, which causes real-estate to shoot up in price. But we can’t kick out all the people who already live in rent-controlled apartments, so we get wacky distortions like people paying $2000/mo for an apartment while the guy next door pays $500 because he was lucky enough to get in while the getting was good. But of course, the $500 guy can’t afford to move any more, so he’s stuck there. You get no mobility in the marketplace, and rent-controlled apartments become white elephants that no one wants to own or maintain, so they become dilapidated.
In the meantime, you make the housing situation even worse, because people will remain living in an area of high demand when they otherwise wouldn’t. For example, if you gave those people a housing subsidy instead, many might choose to move to a cheaper area into a nicer house or apartment, rather than live in the small apartment in the high demand area. That frees up apartment space for those who want to live there badly enough that they’ll give up space for location.
EVERY time price controls are tried, they screw things up royally. Nixon tried it with gas in the 1970’s, and the result was gas shortages and lineups. This is not rocket science, nor is it based on some religious belief that the market is always right. It’s based on a simple principle - if you fix the price of something by fiat below the market clearing price, you will get shortages. If your aim is to provide housing for people, setting up a situation that will create housing shortages is a perverse way of doing it.
Thank you for saying what the worshopers of a nanny government don’t want to admit. You’ve said it better and clearer than most, I wonder if the folks on the other side will listen?
And sometimes the guy paying $500 can afford to move, but won’t becasue the rent is so cheap. Someone I worked with had a $500 or so rent-controlled apartment in Manhattan, owned a weekend/summer house in Pennsylvania, and one in Florida that he visited during the winter. He’s the only person I knew with a rent-controlled apartment and two houses, but I’ve known plenty of others with a rent-controlled apartment and a summer house upstate or in PA. Those people would never have ben eligible for a housing subsidy.
All fine and dandy, and the OP is about, indeed, not rent control but subsidized housing (because that’s what set-asides for “affordable” homes are, really: someone absorbs the difference between “affordable” and real price), and who pays to provide it – with HH the Mayor essentially saying let’s provide none, and kinda implying that if you want a house, then work 80-hour weeks and kiss the ground weeping in thanks to have a job at all, peon.