We Can’t Reduce Housing Costs by Wishing for Rent Control: New at Reason

A new California ballot initiative proposal combines wishful thinking with the heavy hand of government.

Steven Greenhut writes:

he term “magical thinking” describes people who believe, as one psychology related website puts it, “that one’s own thoughts, wishes or desires can influence the external world.” It’s the idea that if we wish for something hard enough it might actually come true. It’s become a fixture in California’s political world, especially as it relates to the problem of high housing prices.

For example, a group of community activists has proposed an initiative for the November 2018 statewide ballot called the “Affordable Housing Act.” It would vastly expand the ability of municipal governments to impose rent-control ordinances by repealing a 1995 law, known as the Costa-Hawkins Act, that essentially bans local rent caps (and vacancy controls) on newer buildings and single-family homes. Its repeal would lead to a flurry of local controls on rent prices.

Sure, the initiative’s drafters make some good points. Housing prices have indeed skyrocketed, median rents are higher in California than other states, and many Californians spend too much of their family budgets on housing. As a result, they add, “three times as many Californians are living in overcrowded apartments” as in the nation at large. This leads to the state’s sky-high poverty and homelessness rates.

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