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Late antiquity, Asia Minor. The residents of a manufactured housing community are gathered near the entrance to the park. [1]
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What are we waiting for, assembled in front of the mailboxes? [2]
Rent control legislation is due today.[3]
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Why isn’t anything going on in the office?
Why have people stopped mowing their lawns? [4]
Because rent control legislation will be passed today.
What’s the point of mowing your lawn now?
Once rent control is in place, the lawns will mow themselves.[5]
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Why did the mayor of the park get up so early
And why is he sitting on a camp chair by the entrance sign
Holding court, wearing his pork-pie hat?[6]
Because rent control legislation will be passed today
and the mayor is waiting to meet with a representative
from HCR. He’s even got a plaque to give her
loaded with titles and imposing names.[7]
.
Why have the stripper and her grandmother come out today
before ten, wearing their special-occasion pasties and thongs?
Why have they put on nose-rings with diamonds,
Belly piercings with magnificent green glass?
Why have they tattooed pink ribbons below their butt-cheeks
and high heels on their calves?[8]
Because rent control legislation will be passed today
and things like that dazzle the sponsors of the bill.[9]
.
Why doesn’t the Professor turn up to extract
gold from discarded iphones and rail against vaccination?[10]
Because rent control will be passed today
and the sponsors of rent control legislation are bored by data.[11]
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Why this sudden bewilderment, this confusion?
(How serious people’s faces have become.)
Why is the space by the mailboxes emptying so rapidly,
Everyone going home lost in thought?[12]
Because night has fallen and rent control hasn’t passed.
And a text from Albany says rent control is off the legislative calendar.[13]
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Now what’s going to happen to us without rent control?
That legislation was a kind of panacea.[14]
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[1] For the text of the 1904 poem Waiting for the Barbarians translated into English by Edmund Keeley, see here . The poem should not be confused with the 1980 novel by J.M. Coetzee by the same name. In that novel, the magistrate of a town at the edge of an empire is squeezed between his feelings for a barbarian girl and the arrival of a force from the Capital intended to quash a perceived incipient barbarian incursion. In 2019, a movie of the same name, based on the novel, was made starring Johnny Depp. Readers should boycott anything involving Johnny Depp.
The Dirtlease founder once passed within five feet of J.M. Coetzee. Shortly after he won the Nobel Prize, Coetzee taught at the University of Chicago for a year. While he did that, he rented a house two doors down from that of a friend of the founder. One morning while he was visiting his friend, the founder saw Coetzee on the sidewalk outside his friend’s house. He immediately jumped out of his chair, bolted out the door, and dreamed up some excuse to be on the sidewalk. When they passed each other, the founder attempted to nod a greeting, but Coetzee scowled at him. Another fan-boy, his face said. I didn’t sign up for this when I became a rock star. Fuck off.
[2] In the poem, the inhabitants of a town in late antiquity gather outside the city gates to hand power over to a group of barbarians, who are scheduled to arrive that day.
[3] Rent control is like fossil fuel. Its direct effects address a salient problem in a highly visible way but its secondary effects, whose costs greatly outweigh it’s the benefits of its direct effects, are difficult to observe. This mis-match in salience distorts political discourse. Voters get riled up about high rents. They are not stirred by negative externalities.
[4] The town has retained the structure of civic life inherited from classical antiquity (‘Why don’t our distinguished orators turn up as usual to make their speeches, say what they have to say?’), but the practice has become mere muscle memory.
[5] In economic textbooks, rent control is considered to be counter-productive. See, e.g. Friedman and Stigler, Roofs or Ceilings, The Current Housing Problem, Found. Econ. Ed., 1946. This is because market distortions create disincentives for landlords to maintain properties and for builders to develop new properties. It also causes deadweight loss, or misallocation of valuable resources – think the empty-nest couple who hold on to a rent-controlled three-bedroom apartment that they don’t need anymore because, well, they can. Three recent changes in law allowed economists to test these hypotheses empirically. In 1994, the city of San Francisco changed its rent control law to cover one-to-four family buildings built before 1980. Under the law, one-to-four family buildings built after 1979 remained uncontrolled. This allowed economists (Diamond, McQuade, Qian, The Effects of Rent Control Expansion on Tenants, Landlords and Inequality: Evidence from San Francisco, Am. Ec. Rev. 109(9), 3365-3394 (2019)) to compare the performance of newly-controlled units with a control group. In 1995, the rent control law of the city of Cambridge, MA was repealed by State law. This allowed three economists (Autor, Palmer, Pathak, Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge, Massachusetts, NBER Working Paper 18125, avail at https://www.nber.org/papers/w18125) to observe the effect of rent control on the price of controlled units as well as that of adjacent non-controlled units. In 2021 the city of Saint Paul, MN passed a strict rent control law under which rents could only be increased by three percent per year including new construction. This allowed economists (Ahern and Giacoletti, Robbing Peter to Pay Paul? The Redistribution of Wealth Caused by Rent Control, NBER Working Paper 30083, avail at https://www.nber.org/papers/w30083) to separate deadweight losses from negative externalities and to observe the effect of rent control rules on wealth redistribution.
[6] Now that the reader knows that the town is waiting to give the key to the city to the barbarians, the image of the emperor sitting in state, wearing his crown, is simultaneously cringe-inducing and full of pathos.
[7] The evidence from San Francisco indicates that rent control creates an incentive for owners to convert property to non-controlled use. In the observed case, that meant converting controlled buildings to condos, which were sold to residents. This had the unintended effect of accelerating gentrification and increasing inequality, because higher-income residents tended to buy condos and the resulting scarcity of controlled units allowed owners to increase rents between tenancies. The authors also observed that rent control appeared to make tenancy stickier, particularly for older residents, and, in the short term, to help retard the displacement of ethnic minorities. Id.
[8] The skeleton of public life that has survived from the Republic and the Western Empire has become encrusted with a meretricious carapace.
[9] Autor, Palmer and Pathak found that decontrol in Cambridge had significant spillover effects. When rents were decontrolled in Cambridge, market values of formerly-controlled units increased. However, market values of formerly non-controlled units in Cambridge and neighboring towns also increased, albeit by a smaller amount. This is interesting because it is evidence of externalities. Rent control lowers values in two ways, i.e., by reducing the present value of future rents, and also by creating a disincentive for owners to maintain the property. The evidence from Cambridge indicates that people do not only not want to live in a badly-maintained property; they also do not want to live next to a badly maintained property. Rent control laws affect everyone in the neighborhood.
It should be noted that externalities of certain transactions can also be positive. Until the FBI weakened the Five Families in New York, law enforcement in certain neighborhoods was ceded to Cosa Nostra. So long as residents of those neighborhoods did not attempt to enter the protection or waste management businesses, they were safer, cleaner and more family-friendly than non-Mafia-controlled neighborhoods. The evidence indicates that externalities of rent control laws do not have these salubrious effects.
[10] Cavafy is being ironic when he says that the orators are ‘distinguished’ and ‘have to say’ what they say.
[11] Evidence from Saint Paul indicates that rent control laws benefit wealthy tenants more than they do poor tenants. This is because wealthy tenants tend to live in higher-end units in better neighborhoods and poor tenants tend to live in, well, crappy housing. The transfer of wealth from owners of higher-end housing to tenants therein caused by rent control is significant, while that caused by capping already-depressed rental values is de minimis. This indicates that a significant policy goal of rent control, that of redistributing wealth, is not furthered thereby. A better method of redistribution would be taxation and direct grants through rental insurance.
[12] In this stanza, the narrative voice zooms out. Where it has hitherto focused on individual townspeople (the emperor wearing a crown, consuls and praetors decked out in embroidered scarlet togas and jewelry (tell me Cavafy wasn’t gay), orators making fine speeches), here we are shown a panorama of faces in a crowd and empty public space. The disorienting rhetorical effect mimics the unease that has descended upon the townspeople.
[13] Call for Papers The first bunch of rent control laws in the United States was passed during the Second World War. Another wave was passed during the seventies and eighties, and a third wave has been passed in recent years. The earliest laws were what one economist has called ‘hard’, or ‘first generation’ rent control laws. Arnott, Time for Revisionism on Rent Control? J. Econ. Persp., Vol 9, No.1, 99-120 (1995). These laws had hard caps with no carve-outs. Laws passed during the seventies tended to be ‘soft’, or ‘second-generation’ laws. These tended to be more flexible with, say, indexing for inflation and decontrol in cases such as vacancy or conversion. They also exempted new construction. The 2019 Nakba law which imposed rent control on manufactured housing communities in New York State is a third-generation rent control law with a hard ceiling and backstops against perceived loopholes. The three percent cap is not indexed for inflation, home rents are treated the same as lot rents, there is no carve-out for new construction, the right to evict recalcitrant tenants is limited and there is a monetary penalty for owners who convert parks to alternate uses. Anecdotal evidence indicates that this has created significant deadweight loss. The number of parks in New York State listed on Mobilehomeparkstore.com has increased since the passage of the Nakba law. Many of these parks are older properties with deferred maintenance and low lot rents. Investors are unwilling to buy these parks because they cannot be upgraded with current revenue and rent caps. The result is that residents are locked into living in crappy conditions. A more effective way of helping these residents would be to raise tax revenue and to distribute same through a rental insurance scheme. Economists are encouraged to look at the data from New York State since 2019 and draw empirically-backed conclusions.
[14] The habit of victimhood has caused the citizens of the town to atrophy. When messengers tell them that the barbarians will not arrive because there are no longer any barbarians, the inhabitants of the town are shattered because that means that they have to, you know, get their shit together.