by Rick Manning
Suing a price monitoring software company is not going to solve this problem, but in a world where blaming something is more valued than doing the right thing, it is to be expected.
Vice President Kamala Harris and the recently tossed aside President Biden continue to amaze with their lack of basic economic awareness.
Their latest ostrich move is their call to set rental housing price controls at 5 percent and throw the full weight of the federal government against a software company that monitors rental prices and suggests price ranges for comparable units to property managers. The property managers then have full autonomy to choose whether or not to follow those price recommendations.
The irony is that the pricing software merely mirrors the market. A neighborhood with declining desirability and low demand would likely see rents remain the same or go down, while a high-desirability and high-demand area might see rental costs increase.
Democrats may not like it, but that’s how our market system works—prices rise and decline based on the invisible hand of supply and demand.
For those policymakers who have caused a housing shortage through policies that created scarcity of both new home and rental unit building, the software program is merely a messenger that shows the real-world impact of bad policies. Progressive cities, often run by the environmentalist, not in my backyard crowd, that have put barrier after barrier up to stop new development and are responsible for making housing unaffordable, must find somewhere to shift the blame.
An additional strain on the housing supply is the steady flow of thousands of immigrants flooding our borders—a challenge straining the housing market and social services of places like New York, Boston, and the Bay Area of California.
The basic laws of supply and demand are taught in the first week of any economics class. When demand (in this case, desire for housing) exceeds supply, prices go up. This price increase incentivizes those who would build housing to get busy and create more units, risking that the demand will still exist when their new or converted units hit the market.
Leftist policies that hamper if not make the building of even low-cost new units nearly impossible, also often create substantial add-on costs to housing, which increases their costs to the consumer.
So, what do the lawyers in the Biden-Harris administration propose to make housing more available and affordable?
Get their Justice Department to file a misguided lawsuit against using software that applies data-driven housing price models in rental housing. In other words, find someone to blame by deciding to allege that a politically neutral rental pricing software is illegal.
After all, data-driven software that signals that prices are too high or too low must be the reason why prices in places like Harris’s San Francisco have skyrocketed.
Pay no attention to San Francisco’s nuttiness when it comes to housing policy. Years ago, housing developments along parts of the Bay were actually stopped due to concerns about something known as the ‘salt marsh harvest mouse.’ The grounds for the initial federal lawsuit to prevent these developments were they were intended to be built on land adjacent to the mouse’s natural habitat, and in the event of global warming-induced sea rise, that land would be needed by the mouse for its survival.
Now, there are millions of dollars of government studies about the mouse, but nary a one about the impact the subsequent reduced number of housing units available have on the humans who live in the area.
Millions of voters face housing cost inflation. Suing a price monitoring software company is not going to solve this problem, but in a world where blaming something is more valued than doing the right thing, it is to be expected.
Instead, the single best way to deal with the high price of rents and housing as a whole is to encourage builders to do what they do best—build—breaking down federal government barriers to rapidly increase new construction to meet demand.
But unfortunately, Kamala Harris and the Democratic Party are the party of lawyers and bureaucrats. It would never occur to them to create conditions to build out of the housing inflation they are wholly responsible for creating. It is not in their DNA.
Maybe, instead, the solution to the affordable housing crisis is to hire a builder to be president. Someone who has actually built buildings and created housing units. Someone who has dealt with federal, state, and local governments and bureaucrats to get something built.
What a radical approach, putting someone in the White House who actually knows what he is doing.
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The author is president of Americans for Limited Government
Rick Manning
Source: https://amgreatness.com/2024/09/10/team-harris-crazy-kill-the-messenger-rental-housing-price-control-lawsuit/
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