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Oct 17 2018

Bill de Blasio Proposes Rent Control on Steroids

New York Mayor Bill de Blasio has done his best to erode the right of private property, the foundation of any free society. His latest proposal to effectively expropriate property from landlords is a great leap forward toward straightforward Marxism:

Commercial landlords would no longer have the power to set their own rents, to evict undesirable tenants, to determine deposit amounts, etc. The property would remain formally titled to them, but they would in effect lose control of it.

Rent control was always a catastrophe, allowing the ultrarich to live as parasites at the expense of their landlords while making housing unavailable for many others. De Blasio wants to put rent control on steroids.

In the long term, this is a step in the progressive march through fascism toward Soviet-style communism. In the short term, it will make it even more impossible to find affordable housing in New York, as landlords are driven out of the city. In the medium term, undermining the concept of ownership creates regime uncertainty, which could have economic effects beyond housing.

Regime uncertainty means that investors are unable to make long-term plans for their property, because the nature of rights to that property is not securely established. Often, this has the perverse effect of raising prices that regulation had been meant to lower or to stabilize: If an investment involves a higher degree of risk, then investors will demand higher returns to put their money behind it.

If landlords have no property rights, how does anyone else know that de Blasio won’t decide to effectively expropriate their business, leaving them as owners only in a narrow technical sense? This is a red flag in more than one sense that investors would be wise to acknowledge before sinking a penny into a city that would elect a Hugo Chavez type like de Blasio.

On a tip from Varla.

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