Here’s a letter to WTOP Radio:
Apparently worried about a looming shortage of rental units in Montgomery County, MD, some government officials there propose legislation to require, among other things, that all landlords offer two-year lease renewals (“Montgomery Co. to consider bill on security for renters,” June 27).
This legislation is counterproductive. Because nothing now prohibits two-year lease renewals – and because landlords prefer the security of longer leases to the uncertainty of shorter leases – a landlord who offers a tenant a lease renewal only for less than two years obviously does so for a reason. The most likely reason is that the tenant’s reliability, while not unquestionably poor, is not sufficiently strong to justify a two-year lease renewal. Another reason that landlords might reject two-year lease renewals is that they believe the chances are high that market rental rates will rise significantly within the next two years.
Whatever the reason landlords sometimes refuse to offer two-year lease renewals, requiring landlords to offer such renewals raises their costs of supplying rental units. Over time, the result will be fewer and more pricey rental units than otherwise. Tenants will be harmed rather than helped. Worse, this harm will fall disproportionately on young and low-income tenants. Because these tenants pose the highest risks to landlords when their leases are renewed for two years, it is these tenants who will suffer disproportionately greater difficulty in finding rental units to begin with.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercator Center
George Mason University
Fairfax, VA 22030
……
Typical politicians: rather than spend their own time and money to increase the supply of some good they believe to be in short supply, they order other people to do so. And these pols don’t understand that such orders, by discouraging these other people from participating in the market, over time reduce the supply.
Also, if you read the WTOP report in the above link, you’ll encounter this passage that contains a quotation from the idiot politician who is pushing this legislation:
As for the bill’s prospects: “I’m optimistic,” [Marc] Elrich said. “It doesn’t take a bite out of landlords.”
Behold, Cafe patrons, the typical politician displaying his typical powers of analysis! This Marc Elrich person, if we are to believe that he believes what he mutters, believes that some contract terms that are (1) valuable to some tenants but (2) not offered by landlords to those tenants, (3) nevertheless cost landlords nothing when landlords are forced to offer those contract terms to all tenants.
…..
There might well be – indeed probably is – a special-interest-group maneuver going on behind the scenes here, but, regardless, such legislation will harm low-income tenants.
