February 18, 2015—If you thought rent control helped to provide affordable housing to the most needy and deserving among us you need a lesson in basic economics. That sounds a little harsh but one need look no further than New York City to see the damage rent control has done to low income real estate there. Since January 2014 zombie foreclosures jumped 54 percent — to 16,777. Zombie foreclosures refers to homes abandoned by the owner or landlord and the banks and are now stuck in limbo.
Some residents have decided to take matters into their own hands and take over the abandoned properties for themselves. But the question of whether or not they should be allowed to do so is, in my opinion, missing the point.
Today on my show we talked about the issue of rent control and the damage it does to the housing market.
When you institute rent control, housing shortages emerge. Don’t believe me? Just look at New York, Santa Monica, Berkeley and San Francisco all who have strict rent control laws. In each and every case you find sky high real estate prices, above average homelessness and a massive shortage of housing. But why? Isn’t rent control supposed to help the poor and disenfranchised? Yes, it was supposed to help. But like most progressive ideas and State meddling the result more often than not hurts the very people they intended to help.
When you mess with the free market and choose to arbitrarily set price floors and ceilings you get shortages. I don’t care whether it’s the cost of rent, a pound of pork or the minimum wage. Any attempt to control or fix prices will have an adverse effect on our economy. Wake up politicians! You are hurting the very people you aim to help. Let the free market do its job and give each of us the freedom to make our own decisions regarding what we will pay and sell our products for.