The rising rent prices in the United States, particularly affecting younger generations, have led to increased frustration and calls for systemic change. This summary examines the claim that government actions, not corporations like BlackRock, are the root causes of the housing crisis.
1. High Rent Crisis: The median rent has increased by 25% over six years, severely impacting young people's ability to afford housing. This has led to increased political activism among younger voters.
2. Misplaced Blame: There is a common narrative blaming corporations such as BlackRock for driving up housing prices by purchasing homes and renting them at high rates. However, the author argues that the real issue lies in government intervention in housing markets.
3. Ineffectiveness of Rent Control:
• Only 2% of economists support rent control, a policy that historically discourages new housing supply and leads to scarcity.
• Countries and cities with rent controls, like California and Boston, have seen a decrease in available rental units.
• Examples from places like the Netherlands indicate that even minimal rent freezes can lead to increased housing shortages, contradicting the intended outcomes of such measures.
4. Historical Context: In New York, the introduction of housing regulations began in 1920, and since then, population density and overall numbers have decreased significantly. This suggests that rent control measures do not effectively address housing affordability.
5. Corporate Influence Overstated: Contrary to popular belief, corporations own a small fraction of housing in the U. S.—around 10% of apartments and 3% of rental properties overall. The majority of rental units are still owned by individual landlords.
6. Regulatory Obstacles:
• Zoning laws complicate the building of new homes by requiring approval from city officials and neighbors, which can diminish the incentive to construct new housing.
• This often leads to a conflict of interest where existing homeowners may resist new development, fearing it will lower their property values.
7. Examples of Housing Policy Failures:
• In Argentina, rent control led to a 140% increase in rents due to restrictive policies. After repealing these controls, housing supply increased dramatically, and prices fell substantially.
• In Dallas, despite an influx of people from higher-priced areas, rents decreased due to fewer regulations.
8. Identifying the Real Problem: Issues like inflation, heavy taxation, and overregulation in the housing industry are presented as the actual causes of high housing costs rather than the actions of investors or corporations.
The housing crisis cannot be blamed solely on corporate investors; instead, government policies and regulations play a crucial role in creating the conditions that keep rents high. To achieve real affordability, the author advocates for fewer regulations and more opportunities for builders, arguing that only an increase in the housing supply will make homes more affordable. Overall, the premise is that more government control leads to less housing availability and higher prices, contrary to the intentions of those advocating for such measures.
https://mises.org/mises-wire/government-intervention-not-blackrock-blame-housing-crisis
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