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Realistic Rent Control – With Vouchers

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Landlords and tenants in the U.S. could both benefit by replacing rent control with "rent vouchers."

Of course, tenant advocates would argue that because housing is a need, landlords should be forced to provide housing at an "affordable price." But food is a greater need, yet society doesn't force grocers or restaurants to subsidize the poor with "food price control." Instead, we have food stamps the poor may apply to their food purchases. We should likewise abolish rent control and give vouchers to the needy, which they could then apply to their rent. Landlords, needy tenants, and prospective tenants would all benefit, and the system would be both fairer and freer.

Mobility for tenants. Under rent control, many tenants are stuck in apartments they'd like to leave, if only they could find a comparably priced apartment elsewhere. But rent vouchers (like school vouchers) would be portable. Tenants could apply them to the building of their choice, just as food stamps can be spent in any grocery store.

More affordable housing. New and prospective tenants are hurt by rent control. Current tenants in rent-controlled apartments won't vacate. Developers are less likely to build affordable housing; they prefer to invest in condos and luxury apartments, wary of building units that might later be "confiscated" in a hostile political climate. Abolishing rent control would free up old units for new tenants, and rent vouchers would help them afford it. It would also encourage developers to build new, moderately priced units, and landlords to maintain their current buildings.

Less fraud. Tenants cling to rent-controlled units they no longer use as a primary residence, often illegally subletting them. Landlords bear the unfair burden of hiring private investigators to prove fraud. Innocent tenants see this as harassment. Housing vouchers would eliminate the incentive for tenant fraud and landlord harassment, which means…

Less court congestion. Courts won't have to deal with nearly so much landlord/tenant litigation. That means quicker court dates for other cases.

Fair to landlords. Grocers aren't expected to bear the sole burden of feeding the poor. Rather than legislating food prices, everyone pays taxes for food stamps. Likewise, it's only fair that society share the burden of housing its poor through rent vouchers, rather than punishing landlords for supplying a need.

Targets needy tenants. Rent control is a moral farce, partly because there's no means testing. Some tenants are wealthier than their landlords; in such cases, the poor are subsidizing the rich. A rare instance? Maybe, maybe not. In any event, rent vouchers (like food stamps) can be means tested, so that only needy tenants receive them.

Although rent vouchers surpass rent control in promoting economic efficiency, freedom of movement, and justice, there will be opponents. Many people benefit from the inefficiencies and injustices of rent control. Lawyers and private investigators profit from litigation. Politicians benefit from landlord/tenant conflict. There are no political battles between grocers and food stamp consumers; both are satisfied with food stamps. Where's the political opportunity in that?

Wealthy tenants are another hurdle. Why surrender rent control if you won't qualify for vouchers? And while prospective tenants would benefit from rent vouchers, prospective tenants are harder to organize politically than current tenants. Taxpayers will also balk. Why share the burden of housing the poor, when you can shift the entire burden to landlords? (Feel good about your "progressive" vote for rent control — without having to pay for it!)

Eliminating affordable housing?

Opponents will also argue (many, ingeniously) that vouchers are an attempt to eliminate affordable housing; that first, we replace rent control with vouchers, then we eliminate vouchers. Not so. Rent control exists because tenants outnumber landlords in the voting booth. That won't change. There's no reason to imagine that rent vouchers will be endangered any more than food stamps.

Needy tenants will gain mobility through vouchers, prospective tenants will see an increase in affordable apartments being built, current buildings will be better maintained, and landlords will be treated more fairly. This last argument alone will infuriate class warriors, some of whom would rather punish needy and prospective tenants than have any benefits accrue to landlords (despite the irony that some landlords are poorer than their tenants).

Even so, rent vouchers make greater economic sense than rent control. And they promote greater fairness and freedom.

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About Thomas M. Sipos

  • http://www.youtube.com/watch?v=hIMW5iYFGhM D’oh

    So, instead of city regulations determining the pricing structure of rents, you advocate letting the chips fly where they may, and the local authorities pay the difference for those in need?

    OK, how do they pay for the vouchers? Those same landlords will scream when their property taxes are raised to make up the difference.

    I only know rent control from NYC, and what it does there, and why. If memory serves, those property owners who fall into the rent control category are compensated on their taxes somewhat..their property tax rates being pinned to the controlled rent prices.

    Seems a much more fiscally sound method of dealing with the problem… as opposed to gentrification of a building by the tenants who then get their rent raised because it’s a bit nicer now, or sheer arbitrary greed by a landlord in a tight rental market.

  • Maurice

    Thomas – great idea and well presented.

    Your picture does not help your case.

  • http://www.communistvampires.com/author.htm Thomas M. Sipos

    OK, how do they pay for the vouchers?

    I was thinking of the general revenue, same as food stamps.

    Those same landlords will scream when their property taxes are raised to make up the difference.

    Not true. Right now, only landlords are forced to subsidize tenants. Under my plan, everyone — tenants included — must chip in.

    Why shouldn’t well-off tenants chip in to help poorer tenants?

    And why should well-off tenants even benefit from rent control? Can you answer that?

    I only know rent control from NYC, and what it does there, and why. If memory serves, those property owners who fall into the rent control category are compensated on their taxes somewhat..their property tax rates being pinned to the controlled rent prices.

    I know NY rent control better than you (having worked for NY landlords), and I can assure you, landlords are hardly “compensated” for reduction in what they’d make under market rents.

    Grocers sell food at market prices. Hell, everyone does. Why single out landlords to subsidize poor tenants–much less being forced to subsidize right tenants!

    as opposed to gentrification of a building by the tenants who then get their rent raised because it’s a bit nicer now,

    Let landlords charge market rates, and they’ll gladly gentrify the buildings at their own expense.

    or sheer arbitrary greed by a landlord in a tight rental market.

    Arbitrary greed? Does not everyone try and earn as much as they can get? Do tenants turn down raises at work?

    Tight market? It’s rent control that creates tight markets. Abolish it, and the zoning restrictions on height (as in many communities), and envirnomental regulations, and there’ll be a housing boom that will causes rents to plumment.

  • http://www.youtube.com/watch?v=hIMW5iYFGhM D’oh

    We can agree to disagree Thomas, and converse on the topic gladly.

    Thomas says: “Tight market? It’s rent control that creates tight markets.” – that I have to ask for your figures on, comparing urban areas of similar circumstances..say Boston and NYC…both markets are ridiculously tight, yet check the prices for what available housing there is for lower-mid and under incomes.

    Thomas also says: “Abolish it, and the zoning restrictions on height (as in many communities), and envirnomental regulations, and there’ll be a housing boom that will causes rents to plumment.”

    So, no zoning restrictions, chemical plants right next to school yards and housing…build as high as you like, regardless of whether the actual ground can hold it safely, or what it does to the view that the rest of the city desires?

    Oh and those pesky environmental regulations that won’t let slumlords use lead paint and asbestos…bastards!!

    Newsflash..no matter what, no matter when…rents don’t go down…flood the market, there may be a temporary blip, but the trend climbs inexorably upward.

    As for the greed bit, I understand….and should have more clearly made it about rampant gouging rather than healthy profit… a big difference. My apologies for not being more clear.

    I know NYC, grew up on the Shore and watched as many communities went the way of the developers. Miles and miles of boardwalks and summer rental/affordable vacation homes were all destroyed so new high rise condos which no one who vacationed there could ever afford, replaced it all and now stand more than half empty for miles and sterile mile…blocking the sea from anywhere but the units facing it.

    Height requirements? I see them now in Portland Maine…you know what? It works pretty decently. No need for rent controls, except those worked out by tenants/condo agreements/leases… the market is a bit tight, but workable…and a working family can still find a place to live.

    A good point to think about is that operating a landlord business in a city means dealing with the city’s rules and regulations, just like any other business… there are rules, not just the arbitrary whims of anyone.

    Following those rules is part and parcel of doing business.

  • Clavos

    D’oh writes:

    I know NYC, grew up on the Shore and watched as many communities went the way of the developers. Miles and miles of boardwalks and summer rental/affordable vacation homes were all destroyed so new high rise condos which no one who vacationed there could ever afford, replaced it all and now stand more than half empty for miles and sterile mile…blocking the sea from anywhere but the units facing it.

    Pretty much describes today’s Miami.

    And sales have slowed considerably, yet there are over 48,000 condo units still under construction here.

    Meanwhile, we face a crisis of affordable housing; one which has already evolved much further in the Keys: The wait staff and service individuals so important to the Keys’ only industry, tourism, can’t afford to live there; most now commute as much as 70 miles each way to get to work.

  • http://www.youtube.com/watch?v=hIMW5iYFGhM D’oh

    I noticed that when talking to folks in Key West, Clavos.

    Nobody who was working there, lived there. They all lived on other keys and commuted, which was no mean feat during Fantasy Fest. Not to say there aren’t Conchs left, but very few.

    The thing about those condos on the Shore, they are mostly empty, any taken are on the sea side…thousands of units empty for years.

  • Clavos

    So are most of the newer condos in Miami, D’oh.

    The difference here is, though they’re empty, they ARE sold, in most cases to LatAm people “parking” their money in the USA. There are also many speculators (some from Latin America), who buy them and “flip” them. Sales have been brisk enough to keep prices way up there, but are slowing; it’ll be interesting to see what happens to prices then.

    In any case, the housing is all very upscale, and not at all useful to most of the workers in the city.

    One way the developers acquire land is further exacerbating the problem: they buy up trailer parks, long a source of affordable housing in this area, and build high rise luxury condo towers in their place; a double whammy.

  • http://www.youtube.com/watch?v=hIMW5iYFGhM D’oh

    One side effect I neglected to mention was the overall economy of the towns I’m talking about.

    They made their money for a hundred years in the tourist trade. Not any more.

    With no affordable rentals, families stopped coming for their vacations, or week end jaunts, the crowds on the boardwalks thinned and shifted to 20 somethings who would join together and get 20 or more people to rent an apartment, party like mad, destroy everything, and leave.

    Even that stopped as more and more was torn down for condos. Even the old businesses got their buildings sold out from under them…less and less attractions, whole town’s worth of boardwalks and beaches gone from public use or torn up completely for the rebuilding.

    Nothing there now but those half empty condos, no businesses, no families… the tax base, rather than booming as the developers insisted, dried up.

    the Tao of D’oh

  • Clavos

    Not a pretty picture…

  • Nancy

    Same around here in that no one who works here can afford to live here (in DC & immediate surrounding environs); everybody has to commute from places like Stafford County or Winchester VA, W. VA, or the farthest northern reaches of the MD/PA line – sometimes a 2-3 HOUR commute, once you hit certain points on 270 or I-95! And that’s the teachers, police, firemen, admin staffers, etc. The goddamned developers run wild building McMansions or other astronomically priced units, or yet more “business” properties, while almost half stand empty. This can be laid directly at the door of the county governments, whose greed for income outweighs what little intelligence & foresight they may have, since the more development they allow, the more services they’ll have to render, which drive up the county need for revenue, etc., combined with the greed of developers, who trash an area with acres of overpriced housing, having stripped it of whatever made it desirable to begin with, and move on – rather like the strip mining companies in West Virginia. The service people around here are all illegals, so they take over whatever affordable housing is available & live 20 or 30 to a house, in violation of all the health & safety laws & codes, so they don’t seem to have any problems finding housing, as it were. They trash the place, then move on when the owners sic the cops on them for vandalism, or the neighbors complain about the noise, violence, & drug deals that inevitably follow them.

    I’m surprised none of these units are rented by a “frontman” – actually around here usually a woman on the premise that the owner will figure she’s more respectable – who really represents a sort of consortium of illegals who pay her a percentage for getting them the house, etc.

  • Nancy

    Of course whenever any of the counties try to restrict or slow development, the developers squall like stuck hogs, start a huge PR campaign about how it will kill the economy (when the only economies on the line are theirs) for everyone – total BS – & pay the county council members a little more sugar to delay & delay or deep-6 it entirely. Montgomery County (MD) building permits dept. just got caught with their pants down & lots of hard evidence of being “cosy” with at least one big developer in the area who made it worth their while to look the other way while codes were ignored & McTownHouseMansions were built too close to the street (violations of fire codes, etc.), too tall, too close together, too many on too small plots, etc. I’m sure there were & are plenty more where that came from, just hasn’t been caught & exposed yet. Interestingly, it was outraged citizens who started digging & exposed it all, NOT the MSM.

  • http://www.youtube.com/watch?v=hIMW5iYFGhM D’oh

    Last bit to share on the subject, sorry for the poor quality, but all I could find, and still listenable.

    the Tao of D’oh