I explained why pure supply-and-demand laws don't work here. It's the same reason the schools are so bad: No place for the kids to get hired when they graduate, because of the constant influx of highly qualified out-of-towners. So why should they bother to work hard?
And finally, no one is getting cheated, except in their own minds. Wealthy types like Malanga salivate at the thought of living in a cheap apartment, thinking of all the cash they'd save, but they're not actually getting cheated, because nothing would change if the rent regs ended. Or the only thing that would change is that unregulated tenants would stop feeling cheated.
The landlords are not getting cheated either: They have a guaranteed increase every year, even if their expenses have gone down, as they did this past year because of the warm winter. They had the chutzpah to claim hardship because of increased security costs. Show me one landlord who has increased security. The doormen are all out switching the cars from one side of the street to the other, sleeping, or mysteriously absent while the "Doorman Will Be Back in Five Minutes" sign grows cobwebs.
There is no government subsidy. In fact, people with rent-regulated apartments actually decrease their eligibility for government handouts, like college financial aid for instance.
I should have specified "effective subsidy" in the same sense that analysts will sometimes refer to tariffs and import quotas. The difference between the artificial price and the market price amounts to a subsidy of the beneficiary.
I explained why pure supply-and-demand laws don't work here. It's the same reason the schools are so bad: No place for the kids to get hired when they graduate, because of the constant influx of highly qualified out-of-towners. So why should they bother to work hard?
I lost you with the schools, and I can't say just how. Sorry.
I think I see your point now about housing from your reply to Lurker. You assume a demand for NYC housing at price range x, a demand always larger than any likely supply, and so we won't see any price drop upon deregulation. Looks plausible to me.
And finally, no one is getting cheated, except in their own minds. Wealthy types like Malanga salivate at the thought of living in a cheap apartment, thinking of all the cash they'd save, but they're not actually getting cheated, because nothing would change if the rent regs ended. Or the only thing that would change is that unregulated tenants would stop feeling cheated.
I don't know NYC at all, so I don't know what you might know about Malanga. I don't see in the article where he claims rents would drop upon repeal of rent control.
People find it unfair that the politically well-connected get benefits that others don't. It violates the idea of "equality under the law".
The landlords are not getting cheated either: They have a guaranteed increase every year, even if their expenses have gone down, as they did this past year because of the warm winter. They had the chutzpah to claim hardship because of increased security costs. Show me one landlord who has increased security. The doormen are all out switching the cars from one side of the street to the other, sleeping, or mysteriously absent while the "Doorman Will Be Back in Five Minutes" sign grows cobwebs.
Sounds like the landlords have learned to play the game as well, to at least limit their loss. Thus does politics flourish.
But the landlords can't have a guaranteed price above a certain point, unless the government cuts a check to them, like farmer subsidies. They have a guaranteed loss, limited a bit by their political clout.
The tenants get an effective welfare check in the difference between the market rent and their lower government restricted rent. That difference has to get paid for by other people, in this case the building owners, or so it seems to me.