The New Ideas Blog

It is one thing to have reasonable regulation of rental housing for the sake of true safety. A tenant doesn’t necessarily have the ability or knowledge to judge the safety of a building. Landlords aren’t likely to say if there are dangerous conditions, making it fraud to rent to tenants who rightfully assume a basic level of safety.

On the other hand, regulations which specify the maintenance of conditions unrelated to safety are not only uncalled for, but they hurt the people they are designed to help. I read through a rental code for a town where I used to live, and it said there had to be enough window space for proper lighting, there couldn’t be missing screen doors or any peeling paint and much more. It was essentially trying to legislate a certain “quality of life” for renters, rather than sticking to safety issues.

Forcing a landlord to create a pleasant environment for tenants may seem like a nice idea, but let’s look at the actual results. It certainly discourages providing housing for renters. Most of the landlords I knew at the time were not wealthy. They might have hoped to become wealthy by investing in rental real estate, but only if they could make a decent profit on it. When they are forced to spend money to install new doors or windows, one of two things happens.

The first possibility is that they get discouraged and sell their houses to homeowners, thus taking those properties out of the rental market and making life more difficult for renters. In case you didn’t take an economics class in college, when the supply of something is reduced the average price (rent in this case) goes up. We know people need rental housing, so we shouldn’t be discouraging people from providing it, right?

The second and more common result is that the cost is passed on, again meaning the rent is raised. This certainly can’t be good for those renters. After all, if they could afford higher rent, they would probably already be in a nicer place, right?

People rent “ugly” homes for a reason - they are cheaper. When they are not, renters are forced to move to where rents are lower. I have seen this happen over the years. As we mandate “nice” housing with regulations (and by outlawing mobile homes), the poor move further and further from town - to where housing is cheaper.

Of course now they are further from jobs. They have to spend more on gas, meaning such regulations make them poorer. When a family can afford a nicer place, they’ll find one and pay the rent required. But when they can’t afford it, you don’t help them by taking away their option to pay less. Sometimes I wonder if these kinds of “well intentioned” laws really are an attempt - possibly unconscious - to push the poor away.

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Tags: landlord, regulation, rental housing, renters

This entry was posted on Tuesday, November 4th, 2008 at 7:25 am and is filed under Economic Theories, Political Ideas. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.