At the Mont Pelerin Society meetings at the Hoover Institution last month, I had a conversation with a man who lives in Santa Monica. (I have his permission to tell his story but without his name.)
He was telling me about the horrors of rent control in Santa Monica. In case you didn’t know, voters in Santa Monica voted in rent control in April 1979 and it has been in force ever since. According to the Santa Monica government’s web site, they voted it in “in response to a shortage of housing units, low vacancy rates and rapidly rising rents.” I leave the economically literate reader to find the irony in the use of those first two reasons as an argument for rent control.
The fact that it has been in force so long means that the regulated rents are way out of whack with what the market rents would be. You might think that this man doesn’t like rent control because he’s a landlord and it hurts him. Wrong. Rent control helps him.
He has lived there a long time and he and his wife pay $1,800 a month for a 3-bedroom, 2-bathroom apartment in a nice area. He pointed out to me that some students pay as much as $6,000 a month for something comparable.
The man telling me the story is the son of a well-known free-market economist and I’m guessing that had something to do with his more general concern for others.
Rent control gives a huge benefit to people who are there when, or shortly after, it is imposed and hurts people who are footloose. That fact applies not just to Santa Monica, but to rent control in general.