State needs to stay out of return to rent control regulations

Massachusetts abolished the concept of “rent control” in 1994. It’s legal in only 13 states, but nine of those states haven’t implemented controls, so essentially only four states — California, New York, New Jersey and Maryland — and the District of Columbia are the only places that place regulations on rental prices and price hike procedures.

The Bay State, and Boston particularly, is an expensive place to live. Rental prices — like home prices — are among the nation’s highest.

On Tuesday, a handful of legislators at the state and municipal level voiced support for a bill that would permit cities and towns to implement rent control, which they currently cannot do.

First of all, when legislators — not voters, not the people — call for something, be skeptical about their motivation. It’s no secret rents here are sky-high — but so is personal income relative to that. Rental prices are a hand-in-hand byproduct of a robust local economy.

Owners of rental properties carry all the weight of those homes. If the water main breaks, if there are any problems with the property, it’s the owners who are on the hook for repairs. Not to mention that Massachusetts has some of the most stringent regulations in place to protect tenants. Tenants write a monthly check —  albeit, a big one — and then they don’t have to worry about the extensive maintenance costs, property taxes, paying the mortgage, making sure they have tenants …

Imagine you’re a small business owner — which essentially is the case for many property owners — and government decides how much you can charge for services and products. Most of us would rather pay $4.99 for a juicy filet mignon. That’s not realistic, nor does it make sense. Restaurant owners forced to limit their prices based on a government calculus will soon be former restaurant owners.

Gov. Charlie Baker has said that rent control is a bad idea, and we agree. Government’s role in the high cost of housing is not to place restrictions on business owners, but this is typical of a lot of government thinking — to rant about a problem, then throw taxpayer money at it without actually devising a solution. If the government wants to address the high cost of housing, instead take that money and build public housing. That’s been happening for years.

In Cambridge, according to a report from the National Bureau of Economic Research, the end of rent control lifted the value of that city’s housing stock by $1.8 billion.

What happened next? Builders aren’t dumb: They got to building. There was money to be made.

That’s called the free market, and it works. The market decides. Many of us would love to live in a Back Bay brownstone, but can’t afford it. This isn’t complicated. If those places were rent controlled, get ready for frat-boy parties every weekend next door to your nice digs.

Our recommendation: Do not expect a filet priced at $4.99, do not force businesses to pursue unprofitable investments, and do not let the State House artificially restrict the price of anything.

from Boston Herald https://ift.tt/2WtyNsl