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Here’s a letter to the Washington Post:
George Will details rent-control’s ill consequences (“Supreme Court should take on New York City’s rent control laws [2],” Feb. 16). Among these is that rent-control discourages couples from moving into smaller apartments when their children leave home. The supply of large apartments available to young families with children is thus kept artificially low.
Rent-control creates what the legal scholar Michael Heller describes as a “tragedy of the anticommons.”* This tragedy arises when too many people can veto decisions on moving property from one use to another. Without rent-control, authority to decide the use of an apartment rests exclusively with that apartment’s owner, subject only to the terms of the lease he or she signs with tenants. With rent-control, however, this authority is shared with tenants (beyond the terms of their lease) and with the rent-control board. The need to get so many people to unanimously approve changes in how property is used stifles the market’s capacity to move property from lower-valued to higher-valued uses.
Heller explained that the “tragedy of the anticommons” significantly slowed economic development in post-Soviet Russia. How sad that housing in modern-day New York City suffers from the very same government-created tragedy.
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030* Michael A. Heller, “The Tragedy of the Anti-Commons: Property in the Transition from Marx to Markets [3],” Harvard Law Review, Vol. 111, Jan. 1998, pp. 621-688.
(In case anyone is wondering why I’m again [4] citing Michael Heller’s important work: in the graduate Law and Economics class that I’m teaching this semester at GMU, I assigned Heller’s article on the anticommons.)