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The Mayor of Huntington Beach, Matthew Harper, is doing big things. His positions on beach fire-pits and the plastic bag ban, for examples, mark this up-and-comer as one who appreciates the future direction of the Republican Party. If the GOP is to have a future, it must find a basis for broad support, while encouraging free-enterprise. His support of beach fire pits is popular; people find a fire at the beach enjoyable, it is a tradition, and it really does not kill anyone. With respect to the ban on plastic bags, the issue is critical for local grocers and corner stores. Modest, often family run, businesses such as these must constitute the Republicans’ base, a party committed to a less burdensome government.
Lately, Mayor Harper has been fighting the imposition of ‘rent control’ in Huntington Beach. I lived in Santa Monica for many years, a city infamous for so-called ‘rent control’. Like many seniors in Huntington Beach, I was on a fixed income living off the loans I took out for law school. To say the least, I did not feel protected by Santa Monica bureaucrats. Government control of the rent market is tempting to those on a fixed income because they are particularly vulnerable to greed and shifting economic conditions. A matter certainly deserving attention, but to that end, ‘rent control’ is a failed policy.
By definition, rent control requires the authorities to treat people differently. Government will determine how much rent can be charged on a particular property. This means different rules apply to different properties. In addition, such laws require distinctions be made among people: based on behavior and based on identity. Not only will one’s residency history be relevant, but seniors will likely be treated differently than students. The more government engages with these sensitive matters, the more they end up in litigation. More likely than not, legal costs over the particulars of ‘rent control’ will absorb much the time and money of local policy makers.
If ‘rent control’ takes hold in Orange County, the result would be a surge in the amount of regulations and the size of government. In Santa Monica, regulations under the law are promulgated by an elected five member board. From the city’s website:
The Rent Control Board and its staff work to advance the Rent Control Law’s basic goals, including: Controlling residential rents; Limiting the grounds for eviction; Preserving rental housing; Encouraging maintenance; and Ensuring rental-property owners a fair return.
“The rent control law is not self-executing, and its administration is not free,” said Santa Monica Rent Control Board’s General Counsel, Stephen Lewis. Santa Monica residents, already cursed with the highest rent in the country, will vote this November on whether landlords should pay to cover the city’s Rent Control Board’s administrative costs.
In the early 70s, local homeowners began to organize and formed a palpable constituency for the maintenance of a neighborhood’s ‘quality of life’. In densely populated, highly desirable, Santa Monica, this frustrated developers who were increasingly thwarted by local residents seeking to curb the influx of apartment units. Thus decreasing the supply, we can accordingly presume an increase in demand.
Responding to the rapidly increasing cost of housing, a constituency of retirees emerged and pushed for SaMo’s rent control ordinance, which passed in 1979. The number of provisions grew and grew and were ultimately very strict. Property owners saw these developments as tantamount to confiscation and as a violation of their rights. Electoral and courtroom battles between apartment owners and tenants have constantly raged and continue to this day.
‘Rent control’ only made housing more scarce. Santa Monica saw a twenty-six percent drop in the number of rental units as a result of the policy. Until recently, the city was seen as hostile to outside investment. Further, apartment owners have a significant incentive to rent to single, high-income professionals. Landlords also fear renting to people unable to make their own repairs and pay for their own interior improvements. So to the extent ‘rent control’ is about protecting seniors or the ‘average working person’, it has been an abject failure.
The proposed ordinance in Huntington Beach, to be voted on in November, appears limited in scope. Nevertheless, it would be the height of folly to ignore Santa Monica’s experience. Once the mechanism is in place the temptation to expand will be too much for politicians searching-out possible constituencies. It should also be stressed that the policy, in some sense, is a one-way street; it will be difficult to reverse course. Tenants, who will increasingly organize, will not give up what is perceived to be a benefit.
There is no reason for Orange County to go down this road. I hope voters in Huntington Beach stand with Mayor Harper and reject ‘rent control’ at the ballot-box.