2023 Leg Session, Ari Armstrong, Exclusives, Housing, Land Use, Uncategorized

Armstrong: Let’s commodify housing in Colorado

If puritanism is, as H. L. Mencken quipped, “the haunting fear that someone, somewhere, may be happy,” then progressivism is, as others have noted, the haunting fear that someone, somewhere, may be making a profit.

We see that dynamic at play in the debates over housing in Colorado. To expand the housing supply and bring down prices, we need to free up the market so that developers can build housing and people can use it without arbitrary governmental constraints. Instead, progressives, prejudiced as they are against profit-seeking developers and owners of rental housing, want to further bind housing in regulations, thereby making it relatively scarcer and more expensive. Here I’ll discuss three examples.

Progressive love government controls

As Sherrie Peif reports in Complete Colorado, House Bill 1068 would forbid owners of rental properties to “charge extra damage deposits or increased rent to tenants who wish to own pets, while forcing some to allow all pets regardless of size or breed.” The bill also forbids insurers to deny a homeowner’s policy because of dogs, with an exception for dogs the government has declared dangerous. It also creates a new dog-damage welfare bureaucracy.

There is only one problem here that should concern legislators: Government has artificially limited the supply and use of housing, thereby raising costs and making it harder for many people, including many pet owners, to find housing they can afford. When people are free to interact, insurers, property owners, and renters are more than capable of negotiating mutually acceptable terms. But freedom of interaction is just what progressives cannot tolerate.

Another bill, HB-1171, not content with people freely negotiating rental contracts, would further restrict when owners of rental properties may evict tenants. Properly, owners may evict people after giving due notice who violate the terms of the rental contract or who are renting month-to-month. According to its summary, he bill “prohibits a landlord from evicting a residential tenant unless the landlord has just cause for eviction.” And who decides what cause is “just?” The government, of course. Otherwise, the property owner must pay the tenant at least two month’s rent to relocate.

One key provision (from the text of the bill) says one “just cause” is if “the tenant refuses to sign a new rental agreement with terms that are substantially identical to the tenant’s current rental agreement, including terms establishing rent in the same amount or in a reasonably increased amount.” And who decides whether a rent increase is “reasonable?” Again, the government, although the bill is not specific as to how.

Again, the central problem is that, by artificially restricting the supply and use of housing, government has put renters in a poor negotiating position. There’s just too little housing available. But, rather than seek to fix that government-caused problem, the progressives in the legislature seek to impose yet more government controls on housing, thereby further driving up average costs. This is comparable to “helping” people with a viral infection by leeching blood from their arm.

But wait, there’s more! There’s always more taxation and regulation in the works with progressives. House Bill 1115 would give local governments virtually unlimited power to impose rent controls, which discourage development of new housing and maintenance of existing housing.

Rent control—price controls on housing—is so stupid and destructive that even the Colorado Sun’s Diane Carman, whom I cannot offhand recall ever before criticizing a new government program unless it involved abortion restrictions or the like, recognizes (quoting an academic friend of hers) that rent control “decreases affordability, fuels gentrification and creates negative spillovers.”

But progressives love government controls and so usually are self-blinded to any bad consequences of those controls. And often they hate employers and property owners, who they allege are “exploitative” by their very existence, so they consistently blame them for the problems caused by the intrusive government that they endorse.

Free the market

The Democratic Socialist on Denver’s city council, Candi CdeBaca, declares, “It’s government’s role to regulate the free market when it comes to housing. We can’t expect the market to fix the problems, when the market created them.” Uh, no. It is government that arbitrarily restricts development, restricts how people may use their housing (as with arbitrary occupancy limits), and upends property rights to subject development to costly political maneuvering.

CdeBaca further declares, “In order to ensure a new economy, we need to decommodify basic needs and basic essentials.” Really? Does anyone think we’d be better off if government ran all the farms, grocery stores, houses, and so on? If only we had some historical examples to show us how “decommidifying our basic needs” works out in practice.

A commodity is basically something that people can buy or sell in a market. Not everything is a commodity, obviously—friendship, for example. But things like food and housing are and should be commodities. The alternative to people buying and selling things in a free market is the politically powerful confiscating stuff and doling it out by political pull.

The problem with housing is not that people are able to buy, sell, and rent it. The problem is that in important ways government prevents people from providing and using housing by mutual consent in a market. The problem is not that property owners profit by selling or renting housing, but that government often forcibly prevents them from doing so. We need legislators not to further restrict housing but to fully legalize it.

Ari Armstrong writes regularly for Complete Colorado and is the author of books about Ayn Rand, Harry Potter, and classical liberalism. He can be reached at ari at ariarmstrong dot com.


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