California’s race to destroy housing opportunities



Progressives are, if nothing else, consistent. It doesn’t matter if something has failed to work in the past, or even crashed and burned spectacularly over and over. They will not abandon their dogmas, which make the most devout religious observers look completely rational by comparison. You think that someone who sees the face of Jesus in a bowl of oatmeal is relying completely on faith? Not compared to those who sing the hosannas of rent control.

Governor Gavin Newsom, who never met a progressive dogma he didn’t genuflect to, has just signed a rent control law that will, if the past is any guide, destroy the availability of rental units up and down the state as landlords take their properties off the market. 

You would think they would have learned the lessons from San Francisco, which has been in the grip of rent control for years. Yet still there is a housing crisis and the only people who can afford to live in the City by the Bay are the rich. Oh yes, and the homeless. 

The laws of economics are harsh. If you make something too expensive to operate at a profit, the owner will pull it off the market or come up with another use for it. If the supply of rentals decreases, even if rent control exists, the amount of available housing will decline. You can’t force people to operate businesses at a loss, and that includes rentals. 

The inability of California to create enough not just affordable housing—but housing that a majority of residents can actually live in—is a key reason why the exodus of productive people from the state has accelerated in recent years. 

Today, virtually 50% of all renter households spend more than the recommended 30% of their incomes on rent. The United State is in the midst of its longest economic expansion on record, but for many, housing costs are dampening that good news. In California it’s not just damp, it’s a hard rain. 

One of the worst parts of the state for housing, outside of San Francisco, is San Diego, where, according to “Apartment List’s” American Community Survey, the cost burden for renters increased from  57.2% in 2017 to 57.8% in 2018. San Diego has the #5 highest cost burden rate of America’s 100 largest cities.

You might suppose these statistics are arguments FOR rent control, but they are not. They are the canary in the mining shaft of the Golden State’s terrible housing situation that has been created by decades of rampant NIMBYism unfettered by the slightest governmental probity. 

No one wants houses built near them. The well-off are particularly well suited to fight residential developments near them. They are willing to use any and all tactics to fight such developments. Because they are so successful at slowing down or stopping residential building, the production of houses has fallen well behind need. And that helps drive up rents. 

Finally, rent controls cause the quality of existing units to decline because landlords can’t afford to spend the money they take in on upkeep. So rent control inevitably leads to slums. 

Another result is that families living in rent-controlled units may not move out of them, even if they have a need to trade up. That means that rental units don’t change hands, and the ability for people to move up to better units is degraded.

But don’t take my word for it. Just wait around a few years as California continues its death spiral. 

*Note: Opinions expressed by columnists and letter writers are those of the writers and not necessarily those of the newspaper.

One response to “California’s race to destroy housing opportunities”

  1. Bill says:

    You say that the “well-off” are to blame. Nonsense. The real culprit are all the rules, regulations and codes and fees that the State forces on builders. Those costs have to be passed onto the buyers. Thus, the State caused the problem, and then tries to fix it. We all see how that has worked out. Government control of rent, spending, wages, or anything else has never worked, and never will.

Leave a Reply

Your email address will not be published. Required fields are marked *