Friday, April 16, 2010

Rent Control

The price of rent control: Landlords have absolutely no incentive to maintain buildings because there is no way they'd get paid for the renovation.
One Swedish economist (can't remember who - he had previously been a socialist and had shifted ideologies after he saw how misguided socialism was) noted that short of dropping bombs, rent control is the fastest way to level a city.
This is backed up by the rent-controlled Bronx in the 70s, during which 40% of the housing stock was destroyed in fire. The culprit was arson - landlords who couldn't get any money out of renting apartments and couldn't sell the rent-controlled building to someone else, because they didn't want to deal with rent control, would light their own buildings on fire to collect insurance money.

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