Saturday, September 13, 2008

Rent control for the rich

In our book, we say that price controls destroy wealth by preventing the movement of assets of higher valued uses. And Representative Rangel's over-consumption of rent-controlled apartments (he lives in three of them, and uses a fourth for an office) has shown us that when politics, rather than markets, are used to allocate apartments, it is the politically powerful who end up with them:

According to the New York City Rent Guidelines Board annual report, "Housing NYC: Rents, Markets and Trends," across the city there are 87,358 New York households reporting income of more than $100,000 a year which pay below-market rent thanks to the city's rent control and stabilization laws. A full 35% of all the city's apartments covered by the rent control regimes are rented by tenants who make more than $50,000 a year.

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