Thoughts on rent cotrol

rent control as a method to make housing more affordable and help the economy is one of the greatest misconceptions of our time. Many people fail to see the true harm that rent control can create. Although seen as a way to make housing more affordable, it only provides a temporary relief for few. Even though rent control was introduced to prevent inflation in the 1940’s, now with the rate of inflation continually increasing, rent control harms the land owner , thus creating less attractive homes and more slums. If we abolished rent control, we could let the market price mechanism balance the price for housing along with the help of a higher economic rent tax and the abolishment of improvement tax. Rent control abolishment will make the amount of apartments in demand meet at the equilibrium with the supply available, thus causing more competition between land owners would make homes become more affordable. Most importantly, one can not blame the high price for housing on landowners who rent their property. One must investigate why the land owner is forced to rent their property at such a high rate. You will find that the root cause of unaffordable housing is land speculation, underuse of the land and taxation on improvements.
Although rent control has the power to help some low-income families, it only serves as a temporary relief while it harms the majority. Rent control advocates have nothing to support their claims but their outrages remarks that anti-rent control is intended to suppress the poor and has overtones of racism. What is not shown in the media, are those people who take advantage of the rent control system and the landowners who are forced to find ways to compensate their expenses for the upkeep of the building when the rent on the property does not pay for itself due to rent control. Landowners need to raise the cost of property rent to match their continually rising expenses for the property. When the cost of everything in the market is rising, why should rent be any different? The landowner bought the property at a great cost to him and his is being told by rent control that he is only allowed to make so much on his return of his investment. Through regulations, landowners are discourages to improve or invest in new ones their properties because they can not get the money they invest on the improvements through the rent. These can be easily viewed as a preventative action to the building of new properties.
To really make housing more affordable, or any there business for that matter, the codes must be changed. One of the biggest taxes a land owner pays is their property tax. Property tax is the land value plus the improvements made multiplied by one percent. Land value is a tax that charges landholder a portion of the unimproved value of the site. If the government was to place a heavier charge on the land value and reduce or completely phase out improvement taxation, landowners would be more encouraged to use their land more efficiently causing the creation of more homes and business as well as revenue for the community. If a landholder only sits on his property, it would continue promoting land speculation and cause land would be treated as a collectible, and as economics teaches us, a collectible market only promotes an increase in prices. Levying a higher tax on land-value and eliminating improvement taxes, would encourage communities would flourish and be a lot more productive. There would be a lot more housing opportunities thus causing competition between landlords and driving the cost of living down. Imposing land value tax would always be certain and simple because land can not be hidden or removed. Even though it has been argued that land value tax can not raise enough revenue if taxed heavier than it is recently being taxed, it would be enough to support all the common needs of the community and every landowner would contribute to that cost equally not based on ability as it is today. Land value tax is created by the community. It is the community taking part of the true value they helped to create. Therefore we may tax land values as much as we please, without the slightest degree of lessening the amount of the land or the capabilities of the land. There are many countries that have implemented land value tax. Denmark for example, collects as much as 50% of its revenue through land value taxation. As well as in Australia where some states exempt all improvements in whole. Sydney is the largest city in the world to derive all its municipals revenues from land tax. Sydney enjoys the creation of many buildings and no slums.
In conclusion, rent control is not only a harmful idea, but it is unnecessary if we chose to eliminate the improvement taxes and raise the land value tax so more landowners would be encouraged to build and create prosperous communities.