I have read that in the days when newspapers still used metal type, the compositors used to keep commonly used headlines ready-formed. The Bloomberg headline below would require only the substitution of the appropriate country name to work for anywhere in the world in any decade since governments came to vex mankind:
How Rent Controls Are Deepening the Dutch Housing Crisis
A law designed to make homes more affordable ended up aggravating an apartment shortage.
Two years ago, Nine Moraal and her two children moved into a one-bedroom flat near the Dutch city of Utrecht, a comfortable spot close to family and friends. Although she had only a two-year lease, she expected to be able to extend it and stay until she could get one of the Netherlands’ many rent-controlled apartments.
But last spring, her landlord told her she’d have to move out in November, because renting the flat was no longer profitable. Despite “frantic efforts on social media, phone calls, visits to realtors and housing agencies,” the 33-year-old educator says she hasn’t found anything. “The cost isn’t the problem, but a real shortage of housing is.”
Moraal is among the growing number of Dutch people struggling to find a rental property after a new law designed to make homes more affordable ended up aggravating a housing shortage. Aiming to protect low-income tenants, the government in July imposed rent controls on thousands of homes, introducing a system of rating properties based on factors such as condition, size and energy efficiency. The Affordable Rent Act introduced rent controls on 300,000 units, moving them out of the unregulated market.
[…]
ASR Nederland NV, which owns about 15,000 apartments across the country, has called on the government to rethink the measure. Almost its entire portfolio was shifted into the regulated segment on July 1, spurring it to abandon plans to purchase more rental properties, says Jos Baeten, ASR’s chief executive officer. “There are other investment categories that are more appropriate,” he says.
One provision of the law bars short-term leases, instead requiring all contracts to be open-ended. Some in the industry suggest the change will encourage landlords to prioritize foreigners, who are more likely to move away after a few years, giving owners more flexibility.
Emphasis added. That’ll go down well with the PVV, currently the largest party in the Dutch House of Representatives.
I think I have said this about Kamala’s plans to place price controls on food in the USA: Price controls create shortages? OMG what a surprise. How could they possibly have predicted that? Someone should write that down in an economics book somewhere.
One example that could be inserted between the square brackets was Britain a hundred years ago. Rent control had been introduced during the War but afterwards they found that they couldn’t get rid of the controls until the houses were built and they couldn’t build the houses until the controls were abolished. Plus a few other things like taxes and regulations.
“The price mechanism is treated with particular uncomprehending hostility by the sort of people who become activists in any political party. Margaret herself was not entirely immune, …” – Nigel Lawson, The View from No. 11.
As Fraser Orr, and Patrick Crozier and Alan Peakall, have pointed out – that prices (including rents and wage – they are both prices) should be set by supply and demand NOT government edicts, is one of the oldest principles of economics – that price controls create economic chaos has been known for thousands of years.
These leads to two possibilities – either people who introduce such things as rent controls are sadly ignorant and the correct response is to carefully explain economics to these people.
Or…
The people who introduce such edicts deliberately (intentionally) wish to do harm.
I started out believing the first option – but over the decades I have come to the grim conclusion that the second alternative is normally the truth. The people who introduce such edicts deliberately wish to do economic and social (cultural) harm, so explaining basic economics to them is pointless – because they already know.
@Paul Marks
These leads to two possibilities – either people who introduce such things as rent controls are sadly ignorant and the correct response is to carefully explain economics to these people. The people who introduce such edicts deliberately (intentionally) wish to do harm.
No there is a third option, and that is the correct option. The people who makes these decisions do not operate in the same economy you or I do. They operate in the political economy where things are measured in likeability, votes and re-election rates, rather than euros or satisfaction. The people who work in (the top levels of) government have two goals: get re-elected and expand the power and budget of their departments. Rent controls are very popular and create new oversight boards with power and money. Within that economy rent control is a very rational decision.
There are definitely some of them who are evil, and some of them have specific evil agendas. But for the most part I don’t think the people who do these things are immoral per se, they are more amoral, and I think that they largely convince themselves to believe the utter bullshit they say.
For example, when people in the USA blame the massive increases in the cost on food on “the greedy grocery companies” they really do believe it. It is for the same reason some people believe the earth was created in seven days. Believing something that isn’t true supports a whole network of other beliefs that are very important to them. And, to prevent feeling like a hypocrite, the actually convince themselves their nonsense is true.
Fraser Orr – you make some good points here Sir.
Fraser,
It is often said that politicians top priority is getting elected, as you say in your previous comment, yet how do you square that with the Tories self destruction in the recent election? There can be no doubt that they knew what conservative voters wanted, but refused to even entertain such policies.
And while we’re on the subject of the Tories, why on earth is sonny boy Sunak still here?
Roue le Jour.
Some Conservative Members of Parliament did not support the policies on which the party was elected – such as ending mass immigration, ending “Woke” (Frankfurt School Marxist) censorship and persecution, and reducing taxation.
But some Conservative Members of Parliament, and Conservative Ministers, supported these policies very strongly – but found themselves to be powerless to enact these policies (see Jacob Rees-Mogg on all this).
I have explained what has happened to the British system of government many times – but people cling to the idea that the elected government is fully “in charge” and can do what it likes, as if the officials (not just the Civil Service but also the Quangos such as the Bank of England) did not exist and did not have their own agenda – an international agenda.
I had hoped that at least the coup, by the Bank of England and allied Corporations (the Corporate entities are dependent on Credit Money and, therefore, are not examples of free enterprise) against Prime Minister Liz Truss would have put to bed this notion that elected politicians are “in power” rather than in office (a very different thing from being in power) – but it seems it has not.
As for Mr Sunak – he is going when a new leader of the Conservative Party is elected, I thought this was understood.
The question is – would the election of a Conservative majority in the House of Commons, or a Reform Party majority in the House of Commons, make a fundamental difference?
Or has the system of government in the United Kingdom moved out of elected control?
The idea is that a politician who is wealthy enough not to depend on being elected, and who really does support “Reactionary” policies, will be able to enact them.
But Jacob Rees-Mogg (amongst others) fits that description perfectly – and was unable (unable – not unwilling) to enact “Reactionary” policies. Because the British system of government has “evolved” to the point where it is very difficult to carry out “Reactionary” policies – such as restoring Freedom of Speech.
Still, in theory, an Act of Parliament could do anything – for example abolish the Bank of England or abolish the Civil Service.
Although the blackmail of “if you move against us we will destroy the British economy – and YOU will be blamed” would be used.
Remember what the European Union, but also the “international community” generally – including the United Kingdom and United States part of it, define as the “Rule of Law”.
By this term, the “Rule of Law”, they do NOT mean fundamental liberties against the state – on the contrary they detest (fanatically hate) fundamental liberties as limits on state power. As they show with their Covid “lockdowns” (soon to be “Climate lockdowns”) and their war-of-extermination against Freedom of Speech (which they call “Hate Speech” or “Repressive Tolerance”).
What they mean by the “Rule of Law” is the power of unelected officials, such as Central Bankers or “Woke” Judges, their independence from the power of elected “reactionaries” (such as the former government of Poland or the present government of Hungary).
That power be kept from the hands of elected “Reactionaries” is fundamental to the definition of the “Rule of Law” held by the international establishment, it is what they mean by the term.
It must not be confused with fundamental liberties as limits on state power, or with natural rights – natural law, the international establishment reject all that. They reject it with vicious contempt.
Paul,
I can’t help wondering why the Tories were so relaxed about losing the election. It’s as if they had some kind of reverse pyrrhic victory thing going on, having achieved enough to make losing irrelevant.
Sunak should have stepped down immediately after the election and a caretaker appointed to oversee the selection of a new leader. No one has any honour any more, Sunak for hanging around and the Tories for letting him.
Milei … That’s the way to do it!
https://www.cato.org/commentary/argentina-offers-textbook-study-why-rent-controls-are-bad-idea#