The Roundup 11

As the destruction caused by lock downs continues to grow, housing advocates have called for numerous measures to protect tenants, including rent control. And while economists have long agreed that rent control is destructive to the housing market, that hasn’t stopped politicians from catering to “tenants’ rights” groups. As an example, in Spain, a law that regulated rental prices caused the construction of an estimated 1,500 rental properties to be halted. Housing advocates got the law they wanted, but as is often the case when government intervenes in the market, the results were quite different from the stated intentions.

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In Indiana, legislators showed more sense. After the legislature passed a law that prohibited local governments from regulating rental housing, the governor vetoed the bill. But this past week the Indiana House of Representatives overrode the veto. The Senate had previously done so, meaning that the prohibition is enacted into law.

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And in Los Angeles, the Planning Commission is considering a proposal to limit housing density in Hollywood in an attempt to keep housing affordable. Ignoring a basic economic truth–the law of supply and demand–the proposal intends to limit the supply of housing while demand is soaring. This has been California’s approach for years, and explains in part why so many are fleeing the state. Instead of setting builders and developers free to produce the housing that California needs, politicians continue to shackle the producers.