Rent Control

Letter writer Jonathan Shibley [Nov. 22 issue] claims that Wall Street investors have forced housing rents higher, so we now need a rent control authority to tell us what rents to charge? My parents, hardworking immigrants who started with nothing were landlords. I have 14 years mortgage banking/real estate experience from a decade ago. I paid $750 rent on a house in 1987. Today it would be $2,800. Hamburgers, gasoline, cars, everything goes up. That’s life. Don’t want to pay rent that goes up over the years? Buy a house. Interest rates have never been lower.  

If anything, due to the mortgage industry crash in 2008 caused by greedy Wall Street, housing prices were lowered due to the huge inventory of defaulted properties that became available. A lot of regular folks got a great deal on a house.

Shibley’s solution to this so-called problem is to have our efficient, well-run government bureaucracy take control of rents and force private property owners to abide by laws dictated via non-elected rent control boards. Local and state government can’t even deal with homelessness, despite having billions at their disposal. According to Shibley, they’re the answer to matters of housing? No thanks.

Communism is the politics of advocating class warfare and leading to a society in which all property is publicly owned and/or controlled by the government. We see this practiced in the poorest nations on earth like Cuba and Venezuela. So, his solution to lower or controlled rents is to relinquish control of your personal property to an authoritarian entity by way of force? I think most rational thinking, freedom-loving Americans I know will pass and wish you all the best in the validation of your personal grievances with someone else’s hard work and money.

Robert Van der Upwich

 

Mr. Jacobs is correct in that when dealing with our market system you cannot try to manipulate the market by using ceilings or floors when it comes to prices or costs. Just ask President Nixon in the 70s when he put a ceiling on costs and interest rates went over 15%. The housing market was stagnated for years, even after he took the ceilings off.

Shibley says that supply and demand are not the culprits here in California. I believe he is wrong and I believe that California leaders have manufactured these conditions by making certain decisions, which have resulted in a low supply of renting properties and at the same time a rise in demand for those properties.

California leaders declared the state a Sanctuary state and invited thousands of immigrants from South America and Mexico to reside here (and of course to vote for left-wing Democrat Progressives). They also made choices when they did try to make new housing, by basically building high-end units instead of low-cost units.

These choices have left California housing in a state of flux. The additional people needing affordable housing had to fight with other folks that had lost their jobs because California is not very business friendly.

Shibley believes that the culprit is the “Wall street gang” of speculators who have manipulated the market to get an advantage. He must know that there are a lot of regular folks in California that want to invest in housing to help them survive the high cost of living here. Are they the Wall Street folks he is referring to, and as investors they want to make a profit? That’s capitalism and they are not looking to make a loss.

So because the market in California has fewer units and too many people that need housing – especially in the low-cost arena – the market has been going up. This is the way supply and demand works in the market. We need to build more low-cost units, and some of the folks looking should look to border states for lower costs; that’s the answer.

But there is one other thing you mentioned that has my blood boiling. Prop 10, as you stated was defeated by the people, so why is Governor Newson pushing a bill through the Senate and Assembly to put in place something the people had said no to already?

Thomas Jefferson had many great quotes, but this one fits this situation: “When government fears the people we have liberty; when the people fear government we have tyranny.” Tyranny: Absolute power, arbitrarily or unjustly administrating laws –depotism.

We have a governor, who apparently is a despot. So who is really trying to manipulate the housing market in California? The Wall Street folks or our beloved despot governor? I think the answer is very easy. But Mr. Shibley, might I suggest that both you and the governor should probably take two courses in economics – micro and macro – and then you both might understand what is truly happening in California.

John Schweitzer

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