Housing debate shows why capitalism doesn’t need defense
Yesterday I pointed out that for the left ideology trumps facts when it comes to the relationship between house prices and housing supply. The left refuses to recognize the benefits for consumers of competition in a market with few constraints. As I have already posted, the left is predisposed to see price as a social construct, something fixed and determined by individuals rather than fluctuating as part of negotiations between buyers and sellers. This stubborn assertion is a hindrance, but it also illustrates why there are few market-oriented advocates for a real increase in the supply of housing.
I facilitated a three-part training session for small housing providers across the country. The topic was how changing the discourse on housing would help change the policy. My claim has been and remains that there are two factors driving the stupid housing policy in the country. The first is the stubborn resistance of the ascending left to the origin of prices and the second is the perception that rental housing is a matter of passive income; the only job that comes with owning and operating a rental property is depositing rent checks each month.
But a third element that keeps the country locked in a self-imposed housing “crisis” is the Conservatives’ utter lack of interest in the housing issue and the willingness of developers to bribe beyond bureaucratic gatekeepers to get their permits. . I explore this in more detail in an article titled “Esta es La Mordida. “I touched on the ‘conservative’ problem a bit in a long and winding article on conservative identity.
Why is there so little intellectual promotion in favor of the market? Why do “conservatives” simply emulate what they think are conservative views with instinctive opposition to taxation and opposition to “big government?” Why are left-wing academics and flashy efforts to promote a nonexistent ‘deportation crisis’ proliferating as so-called conservatives invest millions of dollars in issues like abortion and gun rights?
My assumption is that what we call capitalism and what I prefer to call the exchange of value does not need defense. What I have found is that developers and housing providers, when faced with regulatory barriers, find ways to get around them. At the beginning there is outrage: “How dare they forbid the eviction!” and “No credit check!” This is crazy! ”Then somehow they all figure out how to run their business anyway.
A perfect example is the mandates for the inclusion of low-rent housing in new developments, the Mandatory Inclusion Zoning (ZIM) scheme. At first, developers are hitting each other on the cost per square foot on their product. They oppose it. Some even claim, “This will push us out of this market!” ”
Then the developers start negotiating on the fees that will be laundered by the government and in the pockets of the nonprofit developers. Once the fees seem reasonable, they capitulate and the fee regime goes into effect. From anyone watching, life goes on, homes are being built anyway. This validates the politicians’ position: the opposition was just hype and worried about lost profits.
What is really happening is that developers are redefining their expectations regarding land costs, debt coverage and rent assumptions. Ironically, what makes this possible is that demand continues unabated, rents remain high and thus streamline costs. Individual developers might not care about rising inflation in the market; in fact, it is the basis on which they can continue to build. Higher prices for consumers mean there is enough money to keep projects profitable and to absorb costs.
Purists like me ask, “Where is the outrage? ”
Then on a Claude Rains ride as captain Louis Renault from Casablanca. Captain Renault is neither an intellectual nor a man of principle. Renault is a rational actor unlike the more romantic figure of Victor Laszlo. We didn’t need Ayn Rand to point out that human beings act like Louis Renault while wanting to be Victor Laszlo. In fact, in many ways the company is structured to allow us to be Renault while still feeling like Laszlo. John Murray Cuddihy’s excellent book, “The test of civility, underlines how Jewish intellectuals like Marx and Freud pointed this out precisely; the Christian-capitalist vision of society is not only to allow contradiction, but to sanctify it.
The idea that the price is a construction is poppy. This is simply not true. This is why the left has written book after book arguing points like “housing is a human right” as a justification for imposing inflationary charges. While housing producers may barge onto the scene from time to time claiming to be “shocked, shocked to see the game unfold here”, they soon find a compromise with the regime and disappear, counting their money as they go. to measure.
I find this both frustrating and edifying. If I really subscribe to the notion of Fable of the bees, the “invisible hand, “and spontaneous order, how could I be anything but satisfied that the exchange of value continues, no matter what the left tries to impose to create “fairness”. Yet the Richard Blaine in me wants to do the “right thing”; so instead of having the daughter, I always end up going away with Louis. Never mind. We’ll always have Paris.