“After debating rent control in Santa Monica on Monday with a leader of a liberal community group, I was left thinking about a great quotation from a famous left-wing Californian, author Upton Sinclair: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” In this case, Santa Monica residents’ controlled rent depends on their not knowing the first thing about how economies work.
Sinclair ran for governor in 1934 on the End Poverty In California (EPIC) platform. In the ensuing years, California progressives have grabbed control over every lever of power in the state. Lo and behold, poverty wasn’t ended. In fact, California has the highest poverty rate in the nation, when the Census Bureau takes cost of living into account.
Liberal activists think they’re helping the poor, but if Proposition 10 passes in November, then those poverty rates will spread across the state as more municipalities embrace extreme forms of rent control. Recent reports suggest that Santa Monica, which has some of the toughest rent controls in the nation, also has the highest rents in the nation. Median home prices there have topped $1.7 million. Hey, how has rent control been working there so far?
The basics are pretty obvious to readers of this magazine. You get less of whatever the government punishes, and rent control punishes people who provide rental housing. It turns every proposed rent increase into a political battle. Rent control boards and bureaucrats decide what private property owners can charge their customers. So people get out of the business — or invest mainly in high-end luxury apartments and condos. There’s no money to be made renting affordable units to people who are likely to squat there until your dying day.”