Sometimes the Guardian surprises. This piece by David Crouch certainly came as an unwelcome surprise to some of the regular Guardian commentariat. Mr Crouch has written a very fair appraisal of the effects of rent control in Sweden: “Pitfalls of rent restraints: why Stockholm’s model has failed many.” He writes,
The result [of rent controls] is a thriving rental property black market, with bribes of as much as 100,000 kronor per room to obtain a direct contract, McCormac says. Many people sublet space in their rental apartments. When one tenant advertised a tiny closet last year for rent, there were many potential takers.
“It is almost impossible for immigrants and new arrivals to penetrate this market – it is all about who you know and how much money you have,” McCormac says. Students, young people and immigrants are consequently shut out, and ethnic and social segregation is increasing.
A commenter called “JohannesL” adds his own story:
When I moved to Helsinki in 1982, there was strict rent control in place and the tenant was well-protected, it was very difficult to get rid of even the tenant from hell. Because of this, there were no rental flats available at all, except the council flats, which were definitely not available for healthy non-addicted young men.
There were plenty of people living in tents and cardboard huts in the woods then. (I enrolled in the university just to get a room in a student dormitory).
In the early 90’s they got rid of the rent control which made renting a profitable business, with the result that suddenly there was an active and relatively abundant rental market, and has been ever since.
Sad but true. Rent control does not work. Also, it must be possible to get rid of your tenant in reasonable time. It breaks my bleeding lefty heart, but that’s just how it is.
I was born in Manhattan and grew up in New York City. We had rent control and it is/was ruinous. NYC has been run by leftist idiots that have destroyed the place.
http://www.forbes.com/sites/scottbeyer/2015/04/24/how-ironic-americas-rent-controlled-cities-are-its-least-affordable/
Rent control works for those in power and enables them to proclaim their moral superiority to those greedy selfish “others” who would raise the prices. Therefore it is an unalloyed Good Thing and may not be challenged by mere facts and experience.
Agreed George A.
And Agreed John Galt.
Good article – even if the leftist readers of the Guardian reject it.
The laws of economics (part of the universal laws of reason) are not optional.
They are not determined by culture, race or historical period.
They are as true in Sweden as they are Tibet.
As true in the 21st century as in Ancient Rome.
People think of Glasgow tenements as slums, but these four-story sandstone blocks are actually found in every district of the city. There are tenements not far from where I live in which the first and third floors are (or were) the servants’ quarters for the ground and second. It was always a bit of an exaggeration, but it used to be said that everyone in Glasgow lived in a tenement.
These buildings were built in the 19th and early 20th Centuries, without exception, for rent. Nobody bought a tenement flat, no matter how salubrious. Then along came the Rent Act. The first effect was that building for private rent stopped dead. Which is why, by the 1970s, Scotland had more state-owned housing per capita than communist Poland.
The second is that today, the overwhelming majority of tenement flats are owner-occupied. Faced with mandated rents that simply didn’t cover their costs, the landlords had no choice but to sell up.
So, a socialistic measure intended to help the poor actually promoted inequality: the poor had no alternative but to take what was handed to them by the state, while those who could afford to bought their own. The middle ground simply disappeared.
What John, George, and Paul said.
Thanks, Natalie. :>)
And kudos to Mr. Crouch (though I haven’t read his piece), and good job, JohannesL.
Sam, you commented while I was composing. So I’ll add, What Sam said. :>)
ll
It is worth reiterating what George said. Rent control DOES work. It just doesn’t work for the alleged purpose. Rent control is very effective at gathering votes and power for the people who write the laws, and provides a fabulous whipping boy both to complain about “slum housing” and to crow about how without politicians greedy landlords would suck the poor innocent dry with their price gouging.
Mostly in the world people do stuff that works. It is just a matter of which metric you are using.
Maybe it hasn’t been tried enough! Total rent control! A vote winner! And a positive boon for the black market. To any hypersensitive Americans, you can read ‘for the African-American market’. Feel better?
Julie near Chicago
Ringo was unavailable for comment.
I’m sorry. I’ll get me coat.
:>)))!!!
Roue: Someone lays a straight line out there in front of you, all dressed out on a silver platter, WITH serving utensils?
No need to apologize.
The phrase that strikes me is the bit about his “lefty bleeding heart”. Here, encapsulated, is the irrational moral inversion that allows members of the collective to cause untold poverty and misery while believing beyond any doubt that their motives are pure, and their compassion unblemished.
If we who reject the collectivist mentality are to make any headway against this massive self delusion, we must thoroughly delegitimize this endless self congratulation, in which constant failure is never allowed to call into question the moral validity of collectivist motivations and intentions.
Those of us who are skilled in debate and adversarial technique must construct arguments so compelling, examples so blatant, case studies so convincing, that the advocates of collectivism’s endless rationalizations can no longer hide behind the claim of good intentions.
The maxims of collectivist ideology are no longer mere philosophizing about some mythical utopian future. We have endured the horrors of an entire century of collectivist experiments, in multiple variations, on every continent, inflicted upon people of every race, color, and creed.
In every single case, the results have been repression, cruelty, violence, warfare both internal and external, and massive and thorough going rejection by every subject population, even at the cost of torture, prison, and death.
Look around at the incompetent, corrupt elites who claim the mantle of “the public good”, as they destroy everything they touch, from the world’s economic well-being to the people who wish to hire out their vehicles without paying tribute to some grasping, crooked pol.
It is time, and long past time, to shine a very bright light on all their lies, corruptions, and mismanagement.
Cockroaches flee from the light.
“Sad but true. Rent control does not work. Also, it must be possible to get rid of your tenant in reasonable time. It breaks my bleeding lefty heart, but that’s just how it is.”
Why are you still a lefty then? Most lefty ideas are like this. They end up shipwrecked on the rocks of reality, producing a different outcome to the one intended and, whatever the problem was, usually making the situation worse that it otherwise would have been. Often though, the actual outcome was perfectly predictable if it had been properly thought through.
Oh Stony,
Please! It is because essebtial the left believ reality ia a creation and not just what is and if it doesn`t work out it iss reality`s fault not their fault. How ould it be otherwise? Because their belief is true goddamnit! Reality is wrong and must be adjusted accordingly.
Sorry ’bout the typing there. I’m on Kindle at the mo.
We have the perverse problem in Oz of housing being one of the few sensible investments available for people looking for a low risk way to park their money.
Largely due to the incredible proliferation of laws and regulations strangling every type of start up operation in its crib.
We have local councils scanning facebook to threaten people with fines for running small start ups at home. So instead of someone getting a chance to experiment in a low cost/low risk way to see if their product or service is viable its “spend X tens of thousands of dollars complying and being regulated or we will prosecute you”.
So in Oz we have extraordinary investment in property with crazy prices, the only shortage being in, you guessed it, government provided/subsidized housing.
We even have government ministers explaining it was better to spend millions on 3 flats in the middle of the city (in a lush suburb) rather than buy or build 15 houses 10km out because of “diversity”.
There is no-one as insane as an ideologue.
Veryretired: I have started to find it very effective to merely state that I want to reduce poverty and suffering and *that* is why I am in favour of free markets. Once they realise they can’t beat me with claims of moral superiority and have to explain *why* X or Y policy is better for poor people, the kind of amateur leftists I debate with go quiet rather quickly.
Oh, I don’t know. They always have ‘la, la, la, fingers in my ears, I can’t hear you, la, la, la’
Veryretired, you write,
Steady on, now. This particular individual obviously has started to doubt, based on his personal observations, even if he hasn’t gone all the way. People very rarely change their minds completely at one fell stroke. Any step in the right direction should be encouraged.
And for a left wing person the right direction is towards an uncovered man hole.
There is an earlier, critical, stage. If you begin to harbour doubts about the direction you are travelling in, the first thing you need to do is STOP MOVING. Doubting progressives need first to become conservatives. Only after this first essential non step has been made, can one make a properly considered decision about a new direction.
One of the most important intellectual failings of progressivism is betrayed by the name – the belief that perpetual motion is necessary. It is not.
Stony:
“Why are you still a lefty then? Most lefty ideas are like this.”
Bingo! (And yes, as Nick says, for all their protestations of “scientific socialism”, it’s because it’s an irrational belief system rather than the result of reasoned argument.)
Veryretired:
I was also saddened by that phrase, but i don’t think that “moral inversion” is quite appropriate: “moral vanity” would perhaps be more appropriate. This is not a case of someone who wants to impose misery via rent control, just because he believes that his motives are pure: this is someone who realizes (in this particular case) that nothing needs to be done by the State to alleviate misery, and it breaks his heart because he feels a compulsive need to do something to satisfy his moral vanity.
Natalie:
Quite true, but his moral vanity must be acknowledged, if nothing else to preserve our mental sanity.
Back to Veryretired:
That does work in some cases (and i admire Rob Fisher’s method of shifting the burden of the proof) but keep in mind that once people claim the moral high ground, they are fair game for ad hominem attacks: if i claim that i want to impose rent controls because i am concerned about people who cannot afford to pay rent (handwaving away the issue of what effect rent controls would have) then it is quite appropriate for you to impugn my motivations, instead of explaining to me the effects of rent control.
Frollicking Mole: a housing bubble in a country as sparsely populated as Australia (or Iceland, though i suppose that has popped since the last time i was there) does seem insane.
How long does it take to register a business firm in Australia? Perhaps i mentioned before that, in Denmark, one can do that by filling out a form on the web.
Denmark still has housing problems, but that comes from the fact that renting is such a hassle that people opt to buy instead. There are probably also perverse tax incentives.
A couple of follow-up points.
While I understand the impulse to applaud this guy for realizing that a particular well intentioned program has not only helped, but actually damaged, housing availability, what I’m speaking to is his obvious inability to understand that it is his persistent belief that the state can solve all problems by fiat that is the underlying problem in any number of serious social and economic problems. Even if he acknowledges that rent control doesn’t help provide more affordable housing, my bet is he would immediately default to a statist solution to any other issue that he considered.
People with a collectivist mentality cannot comprehend the concept of solutions that do not come from state action. As in any fundamentally religious belief, their faith in the benevolence and moral validity of collective ideas and action is usually so powerful that not even the utter horrors that various states, espousing the very same ideas they profess, have repeatedly caused can shake their devotion to the magical thinking that believes “next time it will work”.
My point about marshalling our best efforts and arguments is not aimed at converting the faithful, although that occasionally can happen, but reaching out to those youthful or uncommitted people who have never heard anything but the conventional wisdom of collectivist ideas and proposals.
I would guess that it is entirely possible to go through our debauched and corrupted educational system from kindergarten to graduate school and never hear any positive instruction about free market ideas, or even individual freedom that didn’t involve some leftist cause du jour. Those of us who value freedom and individual liberty have a serious obligation to make a forceful case for those values whenever and wherever we have the chance. This is especially crucial when it involves young people who are searching for moral guidance.
As to the term “moral vanity”, I agree this is a significant factor in the collectivist mentality, but what I am referring to is not just moral preening without just cause, but the entire underlying structure of moral values and justification which is based on the premise that coercive state action is not only effective, but morally proper, while voluntary private action is suspect and morally dubious at best.
Sad? What is the fuck is SAD about discovering the truth? It breaks my non-lefty heart that shit-for-brains lefties get to mess up so many lives and then just wistfully walk away muttering about their kind and sharing bleeding hearts. FUCK. YOU 😡
Perry, our disagreement is tactical rather than one of principle but profound for all that. If you want to win a war, don’t make it dangerous for people to come over to you from the other side.
It’s not at all obvious to me, from reading JohnnesL’s comment, that “bleeding lefty heart” was meant seriously in the first place.
It makes perfect sense to read it as a snide swipe at bleeding-heart lefties in general.
It also makes perfect sense to read it as a sort of humorous self-mockery: Johnny hasn’t a bleeding heart nor a lefty bone in his body, as people [that is, his friends both in person and on-line] ought to know perfectly well.
I do that myself fairly often. “Of course, there’s nobody I’d rather see take over the Sith’s golf-course than the Trumpster, but I fear we’ll be stuck with some blasted semi-libertarian. Rand Paul? Or somebody inclined to kayo the Big Unions, like Walker. I fear this because it would never be the same country afterwards.”
You-all do know me, so to speak, and by now you must realize that I’m capable of poking the other side with a faux self-mockery. We don’t know Johannes; but mightn’t we give him the benefit of the doubt?
Although I must say that to me, anybody can be wrong, seriously wrong, about some major principle; to realize it at all, acknowledge it publicly, and state some true conclusion is extremely difficult and worthy of applause.
(I still don’t think the guy sounds serious, behind the self-mocking or self-deprecating words.)
There’s another aspect to the thing. What if it the whole comment is a dry, sly correction of the Grauniad’s mostly-librul/leftist leadership? Along these lines:
“I hate to tell you, honey, but though it breaks my unicorn-believing heart, the Tooth Fairy is not going to come leave the mortgage payment under my pillow tonight.”
Same thing exactly.
Snorri Godhi
I wont bore you with the detail (and there is so much of it). Getting a business registered is easy, being allowed to run it, or even get a premises to run it from is not.
In short. Australian local government (councils) get income based on land values (rates on properties). They also control planning as well as an alphabet soup of regulations.
Its not in councils interest to allow land values to fall so the release of new land/re-zoning is made deliberately Byzantine, expensive and in general impossible for the layman.
Also coincidently many of the people on the council own commercial property in town, by the deft application of zoning regulations they can ensure monopoly rents.
If you wanted to design, deliberately, a more open to corruption, deliberately unresponsive organ than Australian local government I couldnt imagine it.
Frollicking Mole: thank you for the feedback, though i am sure it must have been a relief for you to get it off your chest.
When i registered my business in Denmark, i put down my home address as business address and had no problems, even though i did not even own my home. Of course it was a strictly one-person business: don’t know what i’d have had to do if i wanted to upgrade.
WRT planning, i have come to think that international comparisons of economic freedom in the housing market are long overdue. I also believe that the best way to find out whether you’d want to live in a given country, is to go there and try to rent temporary accommodation. Apart from finding out what kind of housing the ruling class allows the plebs to live in, you’ll also meet a sample of local people and find out what they’re like.
The naive young lefty, partly idealistic and partly enjoying the ego rush of being the good guy fighting the bad guys, gets successive hints from reality as they grow older. Over time, the accumulating hints force a choice: the idealism _or_ the ego rush; it can no longer be both. The more they shouted their hatred of the bad guys when they were young, the more dubious deeds they did “for the cause”, the harder it is for them to choose the idealism rather than the ego rush (as some college professors well know when they make activism part of the curriculum), but becoming “an apostate” is emotionally hard in any case. It can be a slow process. It can take years. From Robert Conquest to Thomas Sowell, some quite effective people were marxists when they were youngsters. So I’m sufficiently with Natalie to say that signs of doubt should not be discouraged (though I do understand why actual encouragement of those who are still fighting to retain their ego rush even as they admit doubt can sometimes stick in the throat).