Confidential to New York Democrats - The Vietnamese Communists Saw Rent Control was Stupid

According to the Marginal Revolution, rent controls are returning to New York (hat tip to FEE)

The bills announced on Tuesday night by the Democratic leaders of the State Senate and the Assembly would abolish rules that let building owners deregulate apartments and close loopholes that permit them to raise rents.

The legislation would directly impact almost one million rent-regulated apartments in New York City, which account for more than 40 percent of the city’s rental stock, and allow other municipalities statewide beyond New York City and its suburbs to adopt their own regulations…

The rent regulation package, which is expected to be approved before the end of the week, is perhaps the most resonant symbol of the change in power in Albany since Democrats took complete control in November.

It turns out that actual communists are smarter about their failures than the American "wannabe communists".  In the 20 years after the Vietnam war, the communist leadership realized that rent controls destroyed Hanoi more effectively than US bombs ever could. 

NEW DELHI—A “romantic conception of socialism” … destroyed Vietnam’s economy in the years after the Vietnam war, Foreign Minister Nguyen Co Thach said Friday.

Addressing a crowded news conference in the Indian capital, Mr. Thach admitted that controls … had artificially encouraged demand and discouraged supply…. House rents had … been kept low … so all the houses in Hanoi had fallen into disrepair, said Mr. Thach.

“The Americans couldn’t destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy,” he said.

—From a news report in Journal of Commerce, quoted in Dan Seligman, “Keeping Up,” Fortune, February 27, 1989.

Fee does a little Economics 101 on the subject that might help your denser friends who want rent controls.



I'm sure the socialists will say it's the nasty, greedy landlords, or the Big Renters manipulating the city that force this, not the invisible hand of the free market.  I was saying elsewhere today that you never hear the Democratic Socialists say that if someone is manipulating the cities that government is at fault, too.  It's stupid to only blame someone paying a kickback (also known as a bribe) when taking the bribe is a crime just like paying one.  Corruption is a crime for both parties.  Monopolistic practices are a crime for both the company and the government regulators.

Everybody has been in the situation where the rent was higher than they'd like.  I've got that tee-shirt, too.  The free market is always better at fixing things like the supply of rental units than government committees will be.  Yes, it's an axiom.