Mayor of Ft. Lauderdale: Can't buy a house? Just work more!

The BBQ Pit
21

Right. The issue of rent control got introduced here as part of a question about regulation of housing markets in general, and then it seemed to run away with the discussion. But the OP, although it mentions the possibility of artificially low rents, seems to consider them just one of several subsidy options:

IMHO, what’s going on with conservatives like soon-to-be-ex-Mayor Jim Naugle is an attempt to redefine a market-driven drop in middle-class standards of living as a failure of personal morality:

I’d say it takes some pretty big brass ones to claim that somebody who works full-time and wants to buy a modest house for his family is lazy and greedy. But that’s what Naugle has to say, because the alternative is candidly admitting that for large numbers of people, housing costs have far outstripped income. A full-time middle-class job in many cases no longer provides what is traditionally considered a middle-class lifestyle.

I have no problem with the honest free-market conservatives who openly concede that markets have bad effects as well as good ones, and that the law of supply and demand can sometimes penalize market participants in painful and unfair ways. If Mayor Naugle were saying “Look, I know this hurts, but I think it’s better in the long run just to let the housing market operate as freely as possible and put up with the consequences. Yes, that means that many middle-class people will have to lower their lifestyle expectations because they’re no longer affordable. I’m sorry, but that’s just the way markets work”, then I wouldn’t call him an asshole.

What makes him an asshole is the way he’s trying to redefine moral standards of industriousness and respectability, to make it look as though full-time gainfully-employed middle-class workers are somehow not morally entitled to a middle-class lifestyle, because they “sit on a sofa” and “drink a beer” instead of working a second job.

This is a shining example of the raw plutolatry that separates market advocates from market worshippers. According to the market worshippers, if you don’t have enough money to afford something, then it must be because you don’t deserve it or haven’t earned it, because the market is infallible in determining its outcomes.

22

No, you’re wrong. While the two are different things, they have to be considered together in order to determine how they are going to be allowed to influence our lives.

We’re human beings, and economics can’t just be separated from normative issues as if the two things don’t occupy the same universe. We can make positive economic decisions (positive in the sense of being scientific, based on empirical evidence), but we have to make the normative decisions about what sort of society we want in order to determine what to do with our empirical findings.

Your example about the scientific method is completely inappropriate. My argument about economics is nothing like that poorly-chosen example. If you want a scientific analogy, a better one might relate to some issue such as, for example, energy policy or abortion. Scientists can tell us which types of energy production have the least impact on the world, and scientists can tell us which abortion procedure works best for particular cases, but we need to take that information and factor it into our overall aim for how our society should function.

Similarly with economics, we look at the empirical consequences of particular economic models, and then make determinations about whether the benefits outweigh the drawbacks, or vice versa. My whole argument was not really about whether rent controls or affordable housing are a good idea (a point which weirddave, with his usual level of acumen, appeared to miss); it was a caution that simply presenting empirical economic conclusions as if they somehow magically should determine how we structure our society fails to take into account a whole slew of factors.

And the whole rest of your argument relies on some truths and some half-truths and untested assumptions. It also takes for granted the very thing that i’m cautioning against—that arguments about economic efficiency are the be-all and end-all of economic policy debate. You’re perfectly welcome to oppose rent control—personally, i think there are many cases where rent control does more harm than good—but it’s disingenuous to pretend that normative decisions about society’s functioning should be a direct reflection of positive economics.

Right, and it’s a perfect example of how ambivalent American politicians—and Americans in general—are about the free market. They often worship it, but at the same time are troubled by the problems it can cause. And often the way to justify or sidestep those problems is to make irrational arguments about people’s greed or laziness, and try to convince the hard-working middle class that it’s all their fault if they can’t make ends meet working full time.

And everything else you said about the Mayor is spot on.

23

And yet your warning hasn’t had any effect on the developers over here in the UK who are compelled to include affordable housing (again: not rent control - that’s a separate issue) in a large number of developments. They soak it up as an overhead, and are crying all the way to the bank.

24

You know, in the stock market the whole POINT is getting in while the getting is good, and getting out before the getting gets bad. And in a capitalist economy that permits inheritance, which is about all of them, 99 percent of how well you live depends on how you did in the Lucky Sperm Lottery. I have never encountered a free market conservative who had the least interest in decrying the unjustness of either of these conditions, but somehow the unjustness of some people getting a deal under rent controls is somehow far more horrible than the others.

Interesting phenomenon.

25

Your “nanny government” line would have a lot more effect if you guys didn’t trot it out every time someone proposed something other than letting the free market run wild in a bare bones libertarian free-for-all. In a dog eat dog society, everyone’s a dog. That’s no way for human beings to live.

26

I think a free-market conservative would defend the stock-market “buy low sell high” transactions not on the grounds that they’re fair, but that they’re efficient. That is, if the market is operating freely and unregulated, the predictable desire of participants to buy stock as cheap as they can and sell it for as much as they can will result in an optimal price for the stocks, in terms of reflecting their true value in the market.

I don’t think such arguments would apply to inheritance, because inheritance is not a market transaction. In fact, AFAICT, from a free-market conservative point of view, inheritance is a major market distortion: certain people are randomly being assigned chunks of money in a completely non-competitive way.

The argument for inheritance is not market efficiency but the fulfillment of fundamental human desires. Which is the same argument that you can make for subsidized housing. IMO, both are perfectly appropriate features of a modern mixed economy, if not carried to extremes.

I agree, and I think that the basic principle of inheritance could be defended on the same sort of moral and ethical grounds.

27

By the way, I note that in 2005 the taxpayer-funded salary for the mayor of Fort Lauderdale (pdf) was $38,500. The median household income, on the other hand, was $58,100:

From which we see that according to Mayor Naugle, many city employees and even the mayor himself would fall into the “lazy and greedy” category if they wanted to be able to buy a home on their salaries.

In other words, the city’s taxpayers are supposed to put up with frazzled, overstressed employees who need to be working an additional job just to meet average housing costs. Is that what you’d want for your city’s building inspectors? For its firefighters?

This type of policy ensures that the only people who run for municipal offices, with their lower-middle-class salaries, are people like Mayor Naugle who don’t need the income. Because, say, they’ve already made a fortune in real estate:

Fat-cat real-estate developer opposes taxing real-estate developers for affordable-housing subsidies, and says that high housing prices are nothing to worry about. Now that’s a surprise, eh?

28

Huh. That must be why nobody lives in New York City any more.

Overall rent control is likely to lead to a shortage of housing, true, since developers won’t build where they cannot make money. But the inclusion of either rent-controlled or low-income housing as a required element of a development project leads to an effective socio-economic mix where you can get your lawn mowed, your child watched by a competent babysitter, etc., should you choose to hire those things done. And if the overall development is profitable, a developer will build it.

Of course, to insist on this sort of thing takes something called compassion. Dear Liberal was insistent that it was present in sufficient measure that government didn’t need to make caring for one’s neighbor a mandatory tax-financed process. The more I see of modern society, the more I think he was being far too much an idealist.

29

Indeed, and anyone who keeps any tabs at all on New York City real estate will know that there is a constant stream of developers clamoring to build new developments, even with the requirement that a certain percentage be for low income residents. When i was in New York a couple of weeks back, the front page story on the Metro section of the Times was about a real estate developer fighting to construct new residential towers on the Upper West Side. The main opposition came form long-term residents who were worried that the character of the area would change too much if the city allowed a whole bunch of high-rise condos to replace the older, low- and medium-rise apartment buildings.

This is why issues like this need to be examined on a case-by-case basis, rather than being evaluated under the “free market is always the best” mantra. While rent control and requirements for low income housing might work in some places, the different market and demographic conditions might mean that they won’t work in others.

30

I’m sorry, but the mayor’s insinuation about people being lazy really pisses me off. I’ve been living in West Palm Beach* for the last four and a half years, and I can barely afford an apartment on my salary. The average home in my area costs approximately nine times my annual wages.** Even a condo is beyond my budget. And he says it’s because I’m not working hard enough? I sometimes work 9 or 10 hours at a stretch without a break. How much harder am I supposed to work?!

Screw you, Mayor Naugle. :mad:

  • Yes, I realize that West Palm isn’t Fort Lauderdale, but we have the same housing problem here.
    ** As I’ve mentioned in other threads, I’ve been looking for a job that pays more (preferably one that’s not in South Florida). It’s taking longer than I thought.
31

Got it. Medicine must be ‘sugar coated’. Lol!

32

“Sugar coated”? Are you saying that you agree with Mayor Naugle’s claim that people who want to be able to buy a home on one full-time middle-class salary are lazy and greedy “schlocks” who don’t deserve housing subsidies, but ought to work multiple jobs instead?!? And that someone who manages to argue against housing subsidies without insulting full-time workers is “sugar-coating” the message??

I’ll refrain from expressing my opinion of that until and unless you come back and clarify what you really meant by your remark. No point wasting perfectly good contempt and outrage on what might just be a misunderstanding.

33

Ack! I went and reread what you originally wrote. Initially I thought you had just paraphrased what you thought the Mayor had actually wanted to say if he was more tactful, but on rereading it I note that you hadn’t done that at all. Instead you changed his meaning in such a manner that if he had actually said that instead there wouldn’t have been much to complain about. My mistake. Chalk it up to less than 4 hours sleep if you need an excuse. :rolleyes: (directed towards me, of course).

34

No prob Uzi, thanks! I’ll save my contempt and outrage for someone who’s earned them, like Mayor Naugle. :wink:

35

Free-Market Worshippers? Nanny Governement acolytes? We all know that there are extremists on every issue. They should hardly be the ones that dictate policy discourse in my opinion, but sadly, they frequently do.

36

That’s why I move we let Weirddave and Evil Captor bicker back and forth, and allow Sam Stone and mhendo to continue the very interesting discussion of economics.

37

Commuting requires things like a reliable car, parking expenses, and more child care (for the extra hours that a parent isn’t home), which can be expensive for low-income people. Not to mention the cost of gas…

And is it really a good thing to have most of the people who work in a city commuting several hours a day to get there? That means more freeway congestion and higher gas prices (because of higher demand) for everybody.

38

Getting back to the OP for a second, let me just explain again:

When you try to monkey with economics to enforce ‘social justice’, you usually achieve neither. Furthermore, you wind up punishing the wrong people, and it generally is unfair.

Take that proposal to force the developer to cough up 1.5 million for low income housing. Why should a developer have to bear this cost any more than any other citizen of the region? This is a selective tax on a specific industry used for ‘social welfare’.

It distorts the marketplace, because it raises the cost of development. Do you think the 1.5 million is just going to come out of the ‘greedy developer’s’ Mercedes fund? No. It’s going to be amortized across all development projects. This raises the overall cost of housing. It means the people who don’t qualify for the subsidy have to pay more for new housing than they otherwise would. Why should middle class people who want to buy a new house be penalized, when people who buy existing houses aren’t?

The effect of this will be to push people on the margins out of the new housing market. This means fewer houses will be built than otherwise would be, which makes housing more expensive and less affordable in the long run. It’s a STUPID policy.

It would be much more effective, and less disruptive on the market, for the government to simply increase the mill rate on everyone’s property taxes, and then use the extra money to provide direct subsidies to low income people. Note that this would have the effect of stimulating more construction, rather than decreasing it, and it would level the playing field between all types of housing. Everyone pays into the kitty, not just those who happen to prefer one type of housing over others. It’s more fair, it’s more efficient, and it doesn’t muck up the housing market.

However, politicians love ‘solving’ problems through regulations, because then they don’t have to be ‘tax increasers’. Of course, regulations are a tax as well, but they’re an insidious backdoor tax that is unfairly applied but doesn’t have to travel through the government’s hands.

The same argument can be made for other interventions in the market. Take minimum wages - it would be more efficient to simply provide wage subsidies and let the market set the minimum wage. The social effect is the same, but now we don’t price some forms of labor out of the market (or create a huge black market in below-minimum wage jobs - can you say “illegal alien”?)

By mixing social justice issues with economic issues, you make the economy less efficient, and ultimately less able to really provide for people. A more sane public policy would be to regulate the market only to the degree that maximizes efficiency and lets the market work to the best of its ability and do what it does best, then taxing the economy evenly to the amount needed to provide for social justice concerns.

39

Sam, you make a good argument, but it’s rather pointless, isn’t it? The political realities are such that achieving those social justice goals through a combination of taxes and transfer payments is impossible. Proposing new taxes and new welfare programs is not politically viable in the United States at least, because the Right has done such a good job at making those things impossible. So the regulatory methods - that involve hidden taxes anyway and (as you say) likely involve more distortion of the market - are the only avenue to accomplish things that most voters feel should be done.

40

Huh?

Your own proposal to increase property taxes rather than mandate low-income development does exactly that; it just does it in a different way. There is absolutely no way to disentangle social issues from economic ones.

For what it’s worth, i actually think your proposal is quite a good one. But stop pretending that it separates social justice from economics. Also, your argument that making the economy “less efficient” has the effect of making it “less able to really provide for people” again completely misses the point. All we can say about a less efficient economy is that it is less efficient.

It is entirely possible to have an economy that is less than optimally efficient, but that chooses to consider issues of income and wealth equality, and that makes a decision that no-one should slip below a certain level of subsistence. For many people the trade-off in reduced efficiency is more than compensated for by the social justice issues such as greater equlaity.

Obviously, you’re not one of these people, but it’s disingenuous to keep harping on efficiency as if that is the answer, rather than just a part of the equation. If someone says to you, “I know you’re system is more efficient, but i’m willing to trade some efficiency for social justice,” it’s really rather pointless to just keep harping back at them, “But efficiency is better!!!”

An economy can be efficient and have great inequality. An economy can be inefficient and have great inequality. An economy can be efficient and have little inequality. An economy can be inefficient and have little inequality. But it’s up to us a society to determine the balance we want between issues of efficiency, justice, equlaity, and all those other social issues that you pretend can be divorced from economics.