The Definition of Insanity...

The following is an open letter to the editor of the New York Times:

To the Editor:

Your 11 September 2019 article on a new housing bill in California proudly proclaims “California Approves Statewide Rent Control to Ease Housing Crisis.” However, the caption of the accompanying photograph tells us that the headline is incorrect, that the bill will not end ease the crisis, but rather make it worse: “San Francisco has had rent control for decades, but it has not been spared from a housing squeeze and rising homelessness.”

In your article, you allude to some of the economist objections to rent control, and the caption quoted above indicates those objections are correct. But there is very little in the article dedicated to addressing those objections. Most of the article is on the intentions of the bill, intentions that will not be realized. The fact that the California bill calls such control “price caps” does not change this fact. The fact that the California bill is not as strict as other cities’ bills does not change this fact. The fact is: California has taken steps to make the housing crisis worse. Restricting supply will not allow more supply to come to the market.

Jon Murphy

Jon MurphyPrice Theory