{"id":1557978,"date":"2022-07-17T06:00:08","date_gmt":"2022-07-17T10:00:08","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1557978"},"modified":"2022-07-17T06:04:46","modified_gmt":"2022-07-17T10:04:46","slug":"alleged-comedian-john-oliver-flubs-the-facts-on-high-rent","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/alleged-comedian-john-oliver-flubs-the-facts-on-high-rent\/","title":{"rendered":"Alleged Comedian John Oliver Flubs the Facts on High Rent"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Falleged-comedian-john-oliver-flubs-the-facts-on-high-rent%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1557978&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>Comedian John Oliver last month dedicated a <a rel=\"nofollow\" href=\"https:\/\/www.youtube.com\/watch?v=L4qmDnYli2E&#038;t=494s\">22-minute segment<\/a> of his weekly HBO late-night show to a deep dive on housing policy and rising rents.<\/p>\n<p>In the segment, which has garnered more than 4.6 million views on YouTube, he points out that \u201crent is skyrocketing\u201d \u2014 explaining that it\u2019s \u201cup 15% since the same time last year, well above the rate of inflation. And it\u2019s up over 30% in cities like Cincinnati, Seattle, and Nashville, and nearly 50% in Austin.\u201d This is a significant problem because, as Mr. Oliver mentions, over a third of American households rent.<\/p>\n<p>More difficult than pointing out the problem of high rents, though, is figuring out <em>why<\/em> they are so high. Mr. Oliver says that it \u201cis partially true\u201d that \u201chigh rents are a supply and demand issue: basically, too many renters, not enough units.\u201d<\/p>\n<p>However, he posits that this explanation is not sufficient. He believes that the status-quo can be more accurately attributed to 1) greedy landlords that will \u201ctake any opportunity to push rents higher\u201d and 2) deeply-rooted structural issues that give landlords significant power in their relationships with tenants, such that tenants are left without any real options.<\/p>\n<p>This is an explanation that has been <a rel=\"nofollow\" href=\"https:\/\/twitter.com\/ilhanmn\/status\/1255906939923566594\">embraced<\/a> by many, including <a rel=\"nofollow\" href=\"https:\/\/apnews.com\/press-release\/business-wire\/north-america-human-rights-and-civil-liberties-social-affairs-elections-campaigns-7bc4b3cad18f4a3f9613bee64e6cc0d6\">national figures<\/a> such as Vermont Senator Bernie Sanders and Rep. Ilhan Omar (D-MN). But how reflective of reality is it? And what can be done to fundamentally change the landscape of the rental market?<\/p>\n<p>Let\u2019s take a closer look.<\/p>\n<h2>The Incomplete Narrative of \u2018Greedy Landlords\u2019<\/h2>\n<p>Mr. Oliver\u2019s contention about \u201cgreedy landlords\u201d is not without <em>some<\/em> merit. After all, one would be hard-pressed to argue that self-interest \u2014 a synonym for greed, to some \u2014 is not a part of human nature. Therefore, if a landlord is able to charge high prices, he will naturally do it because it helps him and his business.<\/p>\n<p>On its face, this seems like a pessimistic proposition. Who wants to live in a society where success is zero-sum and people will squeeze every cent they can out of customers? Well, almost nobody. For this reason \u2014 and because we cannot change our predisposition towards self-interest \u2014 it is our job to create systems that channel human self-interest for good.<\/p>\n<p>This is where the free market comes in.<\/p>\n<p>In the current market \u2014 where demand is far greater than supply \u2014 landlords have significantly more bargaining leverage than tenants. Potential tenants do not have many options, which allows landlords to charge high prices and, in some cases, be careless with the quality of the product they are providing. These high prices reduce the number of people who are actually able to afford the rent. This is clearly not an ideal situation.<\/p>\n<p>However, in a true free market \u2014 where new housing supply is not hindered by the government \u2014 the landlord-tenant power dynamic would be far different. Even though landlords may still <em>want<\/em> to charge high rents and provide less service, it is no longer in their self-interest to do so, unless they want to lose tenants. The landlord\u2019s \u201cgreed\u201d is checked in a market where there are many competing firms because, if he charges too much, most people would simply do business elsewhere. So, if the landlord wants to make money, he <em>must<\/em> be in tune with the needs of the tenant. Moreover, the price would naturally go down due to the increased supply \u2014 therefore also helping tenants.<\/p>\n<p>This is how the natural drive towards self-interest is harnessed for good in a free market. It is still there, but the incentives have changed in a way that benefits consumers.<\/p>\n<p>In his segment, Mr. Oliver includes a video of a prominent landlord talking about how there is currently an \u201cunprecedented opportunity\u201d to \u201cpress rents.\u201d The reason? Well, he points out that \u201cthe country is highly occupied. We\u2019re 97.5%. And so, where are people going to go? They can\u2019t go anywhere.\u201d Mr. Oliver\u2019s takeaway is to blame landlord heartlessness. But the real implication is clear: if the tenants <em>had<\/em> somewhere else to go, then landlords would not be raising rent.<\/p>\n<h2>Why Are Rents So High?<\/h2>\n<p>If the skyrocketing rents cannot be chalked up to \u201cgreed,\u201d then what <em>can<\/em> they be attributed to? The answer is surprisingly simple: there is a shortage of housing.<\/p>\n<p>Why is there a shortage of housing? Again, the answer is surprisingly simple: it can be attributed to housing policies that discourage new construction, thus constraining supply and driving up prices.<\/p>\n<p>Let\u2019s take each part of that in turn.<\/p>\n<p>First, in order for people to have access to housing, there must be adequate supply. But that supply of housing does not simply appear out of thin air. Rather, as I have <a rel=\"nofollow\" href=\"https:\/\/fee.org\/articles\/here-s-why-the-eviction-moratorium-is-likely-to-create-more-homelessness\/\">written before in FEE<\/a>, \u201cIndividuals or businesses must conclude that it is in their financial self-interest prior to adding units to the market.\u201d The issue is that, over the years, policies across the country have been put in place that disincentivize \u2014 and in many cases prohibit \u2014 individuals and businesses from putting new units on the market.<\/p>\n<p>In <a rel=\"nofollow\" href=\"https:\/\/fee.org\/articles\/heres-the-real-reason-young-people-can-t-afford-a-home\/\">many<\/a> communities, there are strict zoning laws that prohibit, or severely limit, the construction of high-density, multi-family units. Additionally, even in places that may allow construction of such units, public hearings are often required before the project is able to be approved. This not only puts extra regulatory roadblocks in place, but those projects <a rel=\"nofollow\" href=\"https:\/\/www.governing.com\/community\/ending-single-family-zoning-is-not-a-stand-alone-solution\">also<\/a> \u201care more likely to be rejected.\u201d This, combined with restrictions <a rel=\"nofollow\" href=\"https:\/\/www.governing.com\/community\/ending-single-family-zoning-is-not-a-stand-alone-solution\">such as<\/a> \u201cminimum parking and maximum building height requirements and prescriptions regarding lot size, lot coverage or floor-to-area ratio,\u201d make the process to build new housing for an increasing population an absolute nightmare. This is not to say that repealing all laws that regulate building is the proper solution, but a critical second look at many of the policies currently in place is surely needed.<\/p>\n<p>We can also look at a few examples of policies instituted over the past year or so that have kept housing supply down. For most of 2021, in response to the Covid-19 pandemic, the Centers for Disease Control and Prevention (CDC) imposed an eviction moratorium. The stated intention was to ensure housing for millions who were in terrible circumstances. However, it ended up <a rel=\"nofollow\" href=\"https:\/\/fee.org\/articles\/here-s-why-the-eviction-moratorium-is-likely-to-create-more-homelessness\/\">backfiring<\/a> in <a rel=\"nofollow\" href=\"https:\/\/fee.org\/articles\/conan-o-brien-sidekick-accidently-exposes-unintended-consequences-of-government-intervention-in-housing-markets\/\">numerous<\/a> ways. It created the possibility that the landlords \u2014 who were often middle-class individuals just trying to get by \u2014 would not get paid and would consequently be forced to pay for <em>other<\/em> people to occupy and use <em>their<\/em> privately owned land and property. This likely led many to take their units off the rental market, as they didn\u2019t perceive the risk to be worth it.<\/p>\n[embedded content]\n<p>In many cases, public policy has also discouraged the construction of new housing.<\/p>\n<p>Last November, for example, residents in St. Paul, Minnesota, passed a city ordinance to institute rent stabilization, which is a type of rent control. In the six months after it passed, the number of building permits issued for housing <a rel=\"nofollow\" href=\"https:\/\/twitter.com\/NickHannula\/status\/1539417669027479560\">decreased<\/a> by 84% \u2014 from 2,180 permits down to 352 \u2014 relative to the same period during the prior year. This makes sense because even though the policy had not yet gone into place, producer expectations are a crucial determinant of supply. When considering <a rel=\"nofollow\" href=\"https:\/\/www.nmhc.org\/research-insight\/analysis-and-guidance\/rent-control-laws-by-state\/\">how many municipalities<\/a> across the country have some form of rent control, it is hard to argue that it is not contributing in real ways to the issue of housing supply.<\/p>\n<p>The primary consequence of these policies is a housing shortage \u2014 which is present in most American cities today. <a rel=\"nofollow\" href=\"https:\/\/magazine.realtor\/daily-news\/2022\/05\/17\/biden-administration-takes-aim-at-america-s-housing-shortage#:~:text=The%20nation%20faces%20a%20shortage,National%20Association%20of%20REALTORS%C2%AE.\">According to Realtor Magazine<\/a>, the gap between the current number of housing units and how many we need is 5.5 million. And econ 101 tells us that when some factor \u2014 in this case, restrictive housing policy \u2014 leads to a decrease in supply, prices rise and quantity goes down. This is precisely what we have seen in practice across the country.<\/p>\n<figure class=\"image undefined\">\n<div><figcaption>A decrease in supply leads to higher prices.<\/figcaption><\/div>\n<\/figure>\n<p>As for the many other issues that Mr. Oliver pointed out with the current rental market \u2014 such as many landlords\u2019 refusal to accept Section 8 housing vouchers or rent to people who had been evicted in the past \u2014 research <a rel=\"nofollow\" href=\"https:\/\/reason.com\/2022\/06\/20\/what-john-oliver-gets-wrong-about-rising-rents\/\">cited<\/a> in <em>Reason<\/em> suggests that \u201clandlords would likely be willing to take a chance\u201d on such tenants \u201cin a world of housing abundance\u201d (i.e. in a more competitive housing market in which landlords didn\u2019t have the luxury of being picky).<\/p>\n<p>And regarding the solutions Mr. Oliver puts forward \u2014 such as expanded funding for Section 8 housing vouchers \u2014 they cannot work unless the supply issue is solved first. As Christian Britschgi <a rel=\"nofollow\" href=\"https:\/\/reason.com\/2022\/06\/20\/what-john-oliver-gets-wrong-about-rising-rents\/\">writes<\/a> in <em>Reason:<\/em><\/p>\n<blockquote>\n<p>&#8220;Dumping a bunch of housing vouchers into supply-constrained housing markets will only raise prices. If there are not enough units already, and it&#8217;s difficult to build more, landlords can easily raise prices to capture the value of the new vouchers without fear that they&#8217;ll lose customers. People that don&#8217;t receive a housing voucher will see their housing costs go up. The government will have to perpetually increase voucher funding to try and stay ahead of the higher prices they&#8217;re causing.&#8221;<\/p>\n<\/blockquote>\n<p>So, Mr. Oliver\u2019s interventionist \u201csolutions\u201d to the real problem of skyrocketing rent are not solutions at all. Rather, they will raise prices even further, which likely will only prompt calls for more intervention.<\/p>\n<p>This is a phenomenon we\u2019ve seen repeatedly throughout history.<\/p>\n<p>Ludwig Von Mises described the dynamic in his book <em><a rel=\"nofollow\" href=\"https:\/\/mises.org\/library\/bureaucracy\">Bureaucracy<\/a><\/em>:<\/p>\n<blockquote>\n<p>\u201cEconomic interventionism is a self-defeating policy. The individual measures that it applies do not achieve the results sought. They bring about a state of affairs, which \u2014 from the viewpoint of its advocates themselves \u2014 is much more undesirable than the previous state they intended to alter.\u201d<\/p>\n<\/blockquote>\n<p>\u201cAs a remedy for the undesirable effects of interventionism,\u201d Mises says <a rel=\"nofollow\" href=\"https:\/\/fee.org\/media\/22117\/interventionismaneconomicanalysis.pdf\">elsewhere<\/a>, \u201cthey ask for still more interventionism.\u201d<\/p>\n<p>This is why Mises believed that \u201cmiddle of the road\u201d policies <a rel=\"nofollow\" href=\"https:\/\/mises.org\/library\/economics-middle-road-policy\">were a pathway to socialism<\/a>. He wrote: \u201cIf the government, in order to eliminate these inevitable but unwelcome consequences, pursues its course further and further, it finally transforms the system of capitalism and free enterprise into socialism.\u201d<\/p>\n<p>Mises\u2019s warning is especially applicable to today\u2019s housing market. Intervention leads to less affordable housing, which leads to more intervention, which leads to less affordable housing, ad infinitum. . And the cycle will continue as long as politicians and the John Olivers of the world continue to champion government \u201csolutions\u201d instead of simply getting out of the way and allowing housing markets to function.<\/p>\n<p>The solution to high housing prices isn\u2019t more subsidies or price controls. The solution is more housing.<\/p>\n[embedded content]\n","protected":false},"excerpt":{"rendered":"<p>Comedian John Oliver last month dedicated a 22-minute segment of his weekly HBO late-night show to a deep dive on housing policy and rising rents. In the segment, which has<\/p>\n","protected":false},"author":1,"featured_media":1574046,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1557978","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1557978","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1557978"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1557978\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1574046"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1557978"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1557978"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1557978"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}