Tag Archives: rent increases

President Biden’s Plan For Inflation

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On Tuesday, Hot Air posted an article about one way the Biden administration plans to fight inflation. It’s a plan guaranteed to be rife with unintended consequences.

The article reports:

Enough about Joe Biden’s mindless nastiness. I’ll take my cue from Donald Trump and Biden himself and focus on policy this morning.

Specifically, let’s talk about Joe Biden’s mindless and nasty demagoguery on economic policies. Faced with the electoral consequences of his corrosive inflationary wave, especially in shelter costs, Biden has to come up with some promised policy solution. And that is … federal rent control:

According to the Associated Press:

President Joe Biden is ready to propose a 5% cap on annual rent increases for tenants of major landlords as he tries to show he’s doing something about the high cost of housing, according to a person familiar with the plan.

The proposal, to be announced while the president visits Nevada on Tuesday, is being championed by Biden in the middle of a tense presidential campaign and a time when housing costs have been a major driver of overall inflation.

Hasn’t this man ever studied economics?

Housing costs are a major driver of overall inflation. That is true, but let’s examine why. Interest rates are double what they were under President Trump. According to U.S. News, the interest rate on November 19, 2020, for a 30-year mortgage was 2.72 percent. A loan of $250,000 would be paid back at the rate of $1,016.63 per month. On May 16, 2024, the interest rate on a 30-year mortgage is 7.02 percent. That loan would be paid back at a rate of $1,666.62 per month. The cost of the actual house you would be financing has also increased significantly in the past four years. So exactly what would be the result of federal rent control? First of all, find rent control in the U.S. Constitution. It’s not there. The 10th Amendment does not include rent control.

In January 2020, The Manhattan Institute posted an article about rent control.

Here are some highlights from the article:

Rent Control Makes It Harder to Find an Apartment

    • Cities that implement rent control see substantial declines in the availability of rental housing.
    • Locking people in to existing rental units leaves many renters in apartments much larger or much smaller than they would prefer.
    • In some cities, waitlists for rent-controlled housing are decades-long.

Rent Control Does Not Increase Diversity

    • Rent control benefits incumbent tenants at the expense of migrants hoping to relocate to a city. In New York City, white tenants have disproportionately benefited relative to black or Hispanic tenants, and landlords give preference to older and childless households.
    • Many of rent control’s benefits typically flow to higher-income households even as rent control drives up rents for everyone else.

Rent Control Degrades the Quality of Its Beneficiaries’ Housing

    • Rent control reduces investment in a property’s quality and causes a city’s housing stock to decay.
    • By suppressing property values, rent control also reduces tax revenue to municipalities, hindering their ability to provide essential services.

It will not decrease inflation, but it will increase government control.

Fiscal Insanity

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The Daily Wire posted an article today about the latest proposal by Representative Alexandria Ocasio-Cortez.

The article reports:

The 29-year-old former bartender has unveiled a new six-bill package of legislation titled “A Just Society.”

“A just society provides a living wage, safe working conditions, and healthcare. A just society acknowledges the value of immigrants to our communities. A just society guarantees safe, comfortable, and affordable housing,” says a page on her House website dedicated to the package. “By strengthening our social and economic foundations, we are preparing ourselves to embark on the journey to save our planet by rebuilding our economy and cultivate a just society.”

The package has six parts:

  • “The Place to Prosper Act” would prevent year-over-year rent increases of more than 3%.
  • “The Uplift Workers Act” would mandate that the Department of Labor to create a “worker-friendly score” considering factors such as paid-family leave, a $15 minimum wage and union membership.
  • “The Mercy in Re-entry Act” would grant public benefits to those convicted of criminal offenses.
  • The “Guarantees the Economic, Social and Cultural Rights for All” Act does, well, just that.
  • “The Recognizing Poverty Act” orders the Department of Health and Human Services “to adjust the federal poverty line” based on location.
  • “The Embrace Act” would allow illegal aliens to claim the same welfare benefits as all U.S. citizens and legal immigrants.

How about a “just society” where everyone gets to keep what they earn, and those who feel the need to help others are free to do that.

A New York Times article from November 3, 2018, reported the following:

Charitable contributions may be lower in Democratic-leaning counties, but residents support the social safety net through higher taxes.

Note to those who support government programs over private charity–in general private charities are run much more efficiently than government programs. Private charities also have a handle on who genuinely needs help and who has learned how to game the system.

Generally speaking it is never a good idea to take money from people that earn it and give it to people who did not–at best it is de-motivational, at worst it is simple theft.