Randy Alcorn: Rent control is folly for political expediency | Opinions


Once upon a time I owned it.

As a young landlord, I had few financial reserves and a modest income, so when my tenants skipped rent, I ate a lot of Ramen noodles and stretched my bills.

There are expenses that come with owning rental property, and if you depend on rental income to cover these expenses, you are at financial risk. This risk is compounded when a delinquent tenant becomes a squatter.

Legally evicting a tenant can take time, while those real estate expenses won’t wait.

Once I ran into and confronted a former tenant who had stiffened me. His defense was, “You’re doing well. You have more money than me. You can afford it.

There you have it, the rationalized moralization of theft – the inequality of wealth, real or perceived. It’s likely that some of my tenants had more disposable income than I did, but I had property – as long as I could afford to keep it – which allowed my tenant not to pay rent.

The echo of this “you have more than me” rationalization can be heard in the argument advanced by a proponent of Santa Barbara’s proposed rent control ordinance, who argues that if rent control results in Insufficient rental income for owners real estate expenses, they can borrow against their equity in the property to cover these expenses.

So it’s somehow fair and moral for landlords to incur debt and interest charges so that tenants can pay less rent. Nothing selfish about that, is there?

The rationalization of wealth disparities ultimately underlies the various arguments advanced for orderly rent control. Arguments are usually flimsy, selfish, and short-sighted.

Fragile because they ignore the extensive evidence that rent control does not solve the alleged problem. Selfish because such ordinances limit the income of others in order to benefit those who feel entitled to receive what they cannot afford. And short-sighted because beyond the political opportunity to pacify a crowd that is making itself heard, rent control has harmful consequences.

Nonetheless, the Santa Barbara City Council is once again considering an even harsher rent control ordinance than what California already imposes on landlords.

Let’s examine the realities of Santa Barbara.

It is located on a narrow strip of land between a mountain range and an ocean. It has a semi-arid climate with limited and increasingly unreliable freshwater sources. Its magnificent geography and pleasant climate have long made it one of the most popular places on the planet. Therefore, the demand for housing always exceeds the supply.

The bottom line is that there are finite resources, especially land and fresh water, and endless demand.

For at least 50 years now, real estate prices and rents have risen, sometimes explosively, pressuring price increases in other sectors of the local economy and making the cost of living in Santa Barbara one of the highest in America.

However, the local economy persists. It’s not collapsing, it’s recalibrating.

Sensible people recognize these realities and understand that trying to accommodate everyone who wants to live here is not only futile, but also deeply destructive. But politics is more often about emotion than common sense, and when realities collide with notions of equal rights, it can create quite a mess.

Rent control will not increase the supply of rental accommodation, rather the contrary – a detrimental consequence for those who, for various reasons, prefer to rent or who cannot afford to own a house and must rent.

The crackdown on landlord rental income may temporarily benefit some incumbent tenants, but only until those landlords decide it is best to convert their rental units to market housing and sell them to the new landlords occupying them. – leaving displaced tenants to scramble to find housing from a shrinking supply.

A UC Santa Barbara professor who advised the board against controlling rents suggested housing subsidies as an alternative — much like food stamps. But food stamps only have value because the market has groceries. Housing subsidies would be of limited value in Santa Barbara’s tight housing market.

Remember the realities: limited resources and endless demand.

Also consider: how many people and how much money would the grants involve? Would the number of recipients be capped regardless of the request? Wouldn’t the value of subsidies increase with increases in rent? How much extra bureaucracy would it take to administer such a program? What would be the qualifying parameters? How would the city, already tottering under obese pension liabilities, fund a housing subsidy program?

Santa Barbara’s housing problems, with all the hiccups, rights outrage and dire economic forecasts, haven’t changed much in the past 50 years, but the political absurdity has.

Example: Ethnic diversity is presented by some politicians as a key justification for making housing affordable for some people.

So would we have a quota system for any affordable housing program, a system that favors people with the desired genetics? If so, ancestry.com may receive many requests for saliva DNA testing from people wishing to qualify for affordable housing in Santa Barbara.

The city council had enough sense to reject a proposal for another expensive study by outside consultants – this time to think about rent control. Perhaps this advice can do its own thinking and see the folly of intervening in a housing market that is inherently exclusive and will always be out of reach for most people.

Official interventions to make housing affordable for people on the basis of selected criteria such as ethnicity, occupation, birthright or anything other than financial means create more complications and injustices than they are not. There will always be more people who want a house here than they can get one. The elect should not choose who gets one.

— Randy Alcorn is a political observer from Santa Barbara. Contact him at .(JavaScript must be enabled to view this email address), or click here to read previous columns. The opinions expressed are his own.


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