Editorial: Regulate this court: New York City rent laws may face their demise before the US Supreme Court
Published in Political News
Having lost at the trial and appeals level, landlords of regulated buildings are asking the Supreme Court to pull the rug out from under New York’s rent-control regime, arguing the court should review its case “to establish that forcing a select group of property owners to subsidize tenants who cannot afford market rents effects a regulatory taking.” A taking is a constitutional no-no — seizing one’s property without just compensation.
Economists left and right are agreed that rent regulation laws are counterproductive; as Nobel Laureate Paul Krugman put it, “The analysis of rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial.” It leads to “sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go — and the absence of new apartment construction...because landlords fear that controls will be extended.” An outgrowth of that consensus is that New York City editorial boards across the political spectrum, this one included, have lamented the persistence of rent regulations here on the grounds that they are effectively exacerbating the very housing emergency that they are designed to address.
Moreover, rent regulation here fails to target aid to those who truly need help. It showers wealthier and older Manhattanites with the biggest benefits.
But if the Supreme Court takes the case, it ought not take out a thick red pen and strike the entire system on sweeping constitutional grounds, as the six-member conservative block is probably wont to do. Rather, any ruling must understand and acknowledge the fact that even in this free-market-obsessed country, government imposes many effective controls on prices. Government sets limits on prescription drug prices. It sets minimum wages. Sin taxes try to ensure that the price of a pack of cigarettes, for instance, never falls too low.
There’s a huge difference between limiting the maximum a poor person pays on basic shelter and dictating the price tag on a pair of jeans, a computer or a tomato. Put another way, price controls are not created equal.
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