Editorial Support: Some People Get It, Some People Don’t.


Rent Control: A 40-year ’emergency’

Competition for the title of America’s Dumbest Law is fierce and intense. But the winner is probably New York’s rent-control provisions, which Mayor Michael Bloomberg just extended for three years when he declared a continuing state of emergency in the housing market.
The rental vacancy rate in New York is a hair over 3 percent. That is “well below the 5 percent rate at which the law requires that rent regulation be discontinued,” Bloomberg said.
So the city will continue to impose artificial caps on prices. Here’s a quick Econ 101 question: What do low prices do? Answer: They encourage demand and discourage supply. (If the government imposed a price cap of $5 on iPhones, how many people would want to buy one? And how many would Apple be willing to make?) If rents were allowed to rise to market rates, more apartments would become available and fewer people would try to rent them. Rent control is creating the very condition that supposedly justifies its existence.
New York’s apartment vacancy rate has been below 5 percent for more than 40 years. The city’s leaders probably are scratching their heads, wondering how an emergency could last for four decades. The Supreme Court has agreed to hear arguments over the constitutionality of the Big Apple’s rent restrictions. Perhaps the justices can explain it to them.