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Walter Block's avatar

Dear Bubba: thanks. Best regards, Walter

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Walter Block's avatar

Dear Bob: My phd was on rent control. Your comments are right on the mark. Best regards, Walter

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Walter Block's avatar

Dear Gail: What a horrid story. Thanks, Walter

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Walter Block's avatar

hopefully, private charity will help them. robbery on their part is still not justified. If Jean Val Jean is allowed to steal bread to feed his starving child, bakers will stop baking bread and all children, and adults, will starve. the reason for the plight of "those" are government policies in the first place. As a libertarian I oppose those policies.

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Bob Reagan's avatar

As a lawyer representing landlords, my experience is that a good many tenants regularly game the system. These tenants seem to have sufficient funds to pay for smart-phones and other luxuries. My clients have been owners of single-family dwellings who have invested their money and expect and deserve a return. They need regular rent payments to maintain the property and pay installments on purchase money loans. I have been a landlord in the past, and have experienced the hassles.

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Bubba Shaffer's avatar

Dear Walter,

I have nothing to add or argue. Very well written. Regards, Bubba

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Vincent Cook's avatar

Once upon a time, I was a candidate for a local "rent stabilization" board in Berkeley, California (a member of the pro-landlord slate, of course), so I can field this question.

Food and clothing are fugitive assets, but houses aren't. While rental housing shortages will still develop over time and the supply will gradually shrink after price controls and/or confiscation are instituted, the process takes years and the opportunities for activists to gain political and financial leverage from the slow-motion destruction of the rental housing stock abound. This is quite unlike the sudden disappearance of retail food and clothing from a locality.

One of the socialist activists in actually wrote a book about how rent control fit into his plan for Berkeley ( https://openlibrary.org/books/OL22787663M/The_cities_%CC%95wealth ). To understand his strategy, try reading Hayek's _The Road to Serfdom_ or Mises's _Middle-of-the-Road Policy Leads to Socialism_ from the perspective of someone who wants to institute socialism via a sequence of smaller interventions.

In the plan for Berkeley, the first intervention was to use zoning laws to prohibit increases in the overall size of housing stock, both rental and non-rental (what came to be known as the "Neighborhood Preservation Ordinance"). Rent control was then the second intervention. The first intervention's artificial restriction on the supply of housing intensified the upward pressure on rents (already strong due to the great inflation of the late 1970s), thus increasing the appeal of rent control to existing renters, enabling voter approval of the rent control ordinance. The third intervention was to leverage federal subsidies for "public housing" (i.e. socialist housing) by using them to acquire units for housing activists who work for the local socialist political machine. Over time, deterioration of the private rental housing stock and declines in its value would make it easier and easier to socialize it.

There were several flaws in the plan. First, there were a number of legal loopholes for escaping rent control. Single unit properties of course could be immediately reoccupied by the owner as their home, and then sold if necessary. Likewise, a large number of homeowners rented spare bedrooms to University of California students, so of course those rentals vanished immediately. In lower income neighborhoods, rental property owners could escape rent control by providing Section 8 housing, where federal laws trump local rent controls. Smaller buildings (duplexes and 4-plexes being common in Berkeley) could escape via exotic tenancy-in-common sales. Some larger older buildings were torn down (or in at least one case, deliberately burned down) and replaced by condominiums, often with a reduction in the number of units.

The more rapid-than-anticipated loss of housing stock had another unintended consequence, namely that UC students had to commute to Berkeley instead of living there. This caused a huge increase in weekday traffic and in the demand for weekday parking spaces near the campus, which upset local homeowners. The socialist response was to attempt to appease homeowners by reserving street parking for them with a parking permit system (later extended to cover Saturdays having Cal football games), but they never solved the problem of increased traffic.

Another interesting unintended consequence was that property owners looked for clever ways to extract non-rental revenues from tenants. The most outrageous scheme (run by the owner of the apartment I lived in, a Indian and a Cal grad who became the largest rental property owner in Berkeley) was to exploit illegal immigrants from India (many of them young girls), housing them in rent-controlled units while employing them in various cash businesses (with income not fully reported to the IRS, of course), including an Indian restaurant, taxis, and building maintenance services (the latter business being a fake IT firm, enabling it to commit H1-B visa fraud). His girls were used for sex as well as for working in some of his businesses; I can remember when a team of lovely young Indian women dressed in saris (not what one would think of as a typical working clothes) were up on ladders painting the building I was living in.

Instead of paying his girls, he would send some of them back to India with gold. This was done for "smurfing" India's restrictions on gold imports at the time (a "tourist" could only bring small amounts of gold into India from overseas) as well as keeping other girls of his loyal to the scheme. He also ran a scam back in India in the form of a "non-profit" engineering school for teaching computer skills.

He and the end of his scheme are memorialized in a Wikipedia page ( https://en.wikipedia.org/wiki/Lakireddy_Bali_Reddy ). One of his girls accidentally died in one of his apartments due to a carbon monoxide leak, and his team got caught trying to spirit the corpse out of the unit, and trying to force another distraught girl away from the scene. Shockingly, the Berkeley police weren't interested in investigating this, but a student reporter for the Berkeley High School newspaper got suspicious because the dead girl was her own age but was not a BHS student. The articles in the high school newspaper about the dead girl got the attention of federal prosecutors.

The unintended consequence that was the final blow to Berkeley's strict version of rent control (strict in the sense that the local Board controlled the rate of rent increases), however, was the flood of litigation it triggered, which the local judges eventually got fed up with. New rental housing construction became possible again (albeit with payoffs to the corrupt city council members to get approvals from zoning and building code boards). Inflation is making rent controls popular again in California as we as the COVID rent holiday, so we may have to go through this dreary cycle all over again.

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Vonu's avatar

A lot of those who don't pay their rent have to close between paying the rent and eating.

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Gail's avatar

Stranger than fiction is the “ Squatter Law”. The homeowner who allows a guest access to his/her home as a goodwill gesture often becomes the victim of said generosity.Unbeknownst to the homeowner, the predatory guest can address change with the postal service.Receipt of a single piece of mail bearing the squatter’s name and the homeowner’s address bars the homeowner from evicting the guest. The squatter is afforded greater rights than the homeowner. Worse still, it can’t be litigated!

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Gail's avatar

Callousness is reserved for the decent,law abiding , hardworking taxpayers who live within their means. The Americans who appreciate what has been afforded them in a once constitutional republic of shared values and norms.

Attorney/Client Privilege has been abolished by an unelected bureaucracy formed as pseudo law i for enemy. Witness intimidation, judicial intimidation, whistleblower protection, free and fair elections, Doctor/Patient privilege, a free press, free speech, the right to privacy, free enterprise, protection from intrusive government overreach, equal Justice under the law, limited war powers, the Freedom Of Information Act, government transparency and accountability, freedom from religious and political persecution, immigration laws, actual collusion with foreign enemies, representative government, the expectation of protection from violent mobs, neutral SCOTUS jurisprudence vs activism predicated by personal ideology( both sides), limiting political power, government by and for “ We The People” no longer exists.

Bottom line, NOBODY has our back .But the corporate donor class has the ear of our vaunted ruling class by virtue of its collective pocket. Too many idiots still believe voting in partisan majorities will save them. How’s that working out?

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