Rent Control: The Failed Concept is Rearing its Ugly Head, Again

Timothy L. Coyle
Consultant specializing in housing issues

In response to California’s housing crisis, housing advocates are calling for price controls – specifically a cap on rents. It’s a popular reprise: “Blame it on the landlords” and hold them responsible. The critics of high rents say those who provide the housing are guilty of manipulating circumstances and are lining their pockets. Indeed, the […]

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Government reform? How about setting priorities?

Timothy L. Coyle
Consultant specializing in housing issues

State government is broken.  Just about everybody agrees – including an apparently
growing number of Californians.  Poll
after poll shows a large majority of voters believe the state on the "wrong
track" and nearly as many suspect dysfunction in Sacramento is to blame.

So, lawmakers, business leaders, think tanks, local elected
officials and other organized interests are actively advancing some kind of "fix
it" plan – or plans for a plan.  Special committees of the Legislature have been formed, calls
for a constitutional convention are being made and political pundits are
endlessly speculating on a basketful of ideas.

Primary attention is focused on the Legislature and its
myriad "processes" although a strong case can and should be made for closely
examining the excesses, overlap and accountability of state bureaucracies.  (Remember the "boxes" to be blown up a
few years back?) 

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Getting it right on fees

Timothy L. Coyle
Consultant specializing in housing issues

A recent editorial by the Sacramento Bee says unlimited fees on housing have no impact on its development or affordability. The Bee says that the efforts of local governments in the Sacramento area to reduce those fees (aka “construction costs”) so that more housing can be built isn’t really good policy and should be at best temporary.

Sheesh. I guess the Bee wants us to believe that costs don’t matter. Most Californians know better. They know, for example, that when gasoline goes from $2.50 a gallon to $2.85 a gallon it costs more to truck produce to the supermarket and, therefore, aren’t surprised when the price of lettuce goes up 15 percent.

Taking the analogy a step further, if enough customers start eating less salad, because buying lettuce for 15 percent more money doesn’t fit in their budgets, the supermarket’s lettuce orders go down, making the marginal cost of the gas hike much bigger for the supplier. If the cost gets too high, the supplier may not be able to economically truck the lettuce to the supermarket at all.

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The growth question

Timothy L. Coyle
Consultant specializing in housing issues

Denial is the first obstacle an individual must overcome if he or she is to break the bondage of alcoholism. Step number one in the now-renown “12-step” process for beating the addiction reads:

We admitted we were powerless over alcohol – that our lives had become
unmanageable.

Thinking about the sorry conditions the state is currently laboring under – economic decline, fiscal chaos, dysfunctional governance – I can’t help but see the similarities between a struggling addict and us. That is, we seem to know what the problem is but are trying mightily to ignore it. California is in denial.

Admittedly, it may be naïveté, not denial – state leaders have been acting for decades as if bad things “can’t happen here.” After all, they grew up believing that “California has it all” – the brains, the brawn, the beauty – and that those gifts of God, or accident, would keep California’s standard of living high and in great demand; would keep the economy humming; and, correspondingly, would grant those leaders the freedom to govern as they saw fit.

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The Power of Tax Relief

Timothy L. Coyle
Consultant specializing in housing issues

Liberals and conservatives in California have debated endlessly over the benefits and shortcomings of taxation. More taxes produce a broader and more durable social and welfare safety net, argues one side. The other side says taxes that progress with incomes discourage initiative, enterprise and hard work.

And, as California is well-recognized as one of the nation’s higher-tax states – and maintains its appetite for more government spending – the debate is certain to continue.

But, someone will record a moment in the state’s history – earlier this year – when, for only a few months, a tax cut worked so well that everyone liked it. No kidding. Nearly the entire Legislature not only voted for it but later marveled at its success.

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