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April 01, 1988 - Image 4

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The Michigan Daily, 1988-04-01

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Page4 Friday, April 1, 1988 The Michigan Daily


Ete gd t an Miciga
Edited and managed by students at The University of Michigan

Rent control

is destructive

Vol. XCVIII, No. 123

420 Maynard St.
Ann Arbor, MI 48109

Unsigned editorials represent a majority of the Daily's Editorial Board. All other
cartoons, signed articles, and letters do not necessarily represent the opinion
of the Daily.

rent control shows their
for tenants' rights andf
only has a minion paid
terests been tearing dow
on C" posters, but tena
cates were attacked b
manager and threatene
bat while campaigning
Landlord interests ho
posed tenants' rights
speak out against highr
ing conditions. The
McKinley Propertiesa
organizers of the tena
common tactic as landlo
suit against any tenant
The landlords desire t
rights swept under the r
The rent stabilizatio
succeeding, in spite of
by the landlords, harass
managers, and publicly
local media which ins

harassing tenants
APPOSITION to counter-factual comparisons to Berke-
r lack of concern ley or New York without paying atten-
free speech. Not tion to the specifics of the Ann Arbor
[by landlord in- housing code. The success of this
vn the "Vote Yes mass-based organization in the face of a
ants rights advo- wealthy public relations campaign
y an apartment demonstrates the seriousness of rent
d with a baseball control to rent-paying peoples of this
for rent control. community.
Tearing down posters and threatening
ave always op- those who attempt to organize are just
advocates who further efforts in the overall strategy of
rent or poor liv- silencing people working for social
landlords at change and greater equality in housing
are evicting the rights.
nts union - a Landlords are only interested in
)rds typically file profit. The abuse of the right to livable
who complains. and affordable housing through re-
o have tenants taliatory evictions, bogus suits, and
rug. physical opposition and threats - all
n campaign is evince the need for rent stabilization
being outspent legislation that connect increases in rent
ed by apartment - to repairs and guaranteed housing
smeared in the inspections. Vote Yes on Proposi-
ists on making tion C.

By Charles Coustan
The irony of the rent control issue is
that the people it is intended to help are
the one's who will be hurt most by rent
stabilization. Well-meaning liberals have
advocated rent control as a way of preserv-
ing the community and protecting the
poor. As a liberal, I also seek intelligent
social policy characterized by fairness and
equality of opportunity. However as a'
student of economics and a real estate
investor, I also know that these goals have
not been achieved by controlling rents in
markets with high demand.
There is actually a surprisingly strong
consensus among economists, politicians,
and journalists on both the right and left
that rent control doesn't work. While con-
servatives and libertarians obviously op-
pose rent controls for ideological reasons,
well-versed liberals who have seen the
consistently negative results have united
in opposition to rent control. Both the
New York Times and The New Republic,
the most important and well respected
bodies of liberalism, have regularly op-
posed rent control. "...Rent control has
stifled new construction. It helps a few
tenants (most of whom aren't poor at all)
at the expense of many more tenants who
must contend with crumbling buildings.
and condo conversion." (The New Repub-
lic, "Shelter Skelter" 5/11/87) "There's
probably nothing that distorts a city worse
than rent regulation. It accelerates the
abandonment of marginal buildings, deters
improvement of good ones and creates
wondrous windfalls for the middle class-
all while harming those it was meant to
help, the poor." (NYT, "End Rent Con-
trol," 5/12/87)
What have been the effects of rent con-
trol? Why?
1)Reduced supply and quality of
Charles Coustan is a LSA senior.

The most basic principle of real estate is
the principle of highest and best use.
Simply stated: real property will be put
to that use which will create the highest
return on investment. In rent controlled
markets, the potential for profit is drasti-
cally reduced. Why would any intelligent,
profit-seeking person invest money where
he/she will receive a return based not on
his/her own effort or initiative but on the
strict control of a rent control board unfa-
miliar with real estate investment? Not
only will the incentive for new investment
be effectively eliminated, but current rental
housing will become substantially less
valuable. Thus rental housing will become
relatively more valuable as single family
homes and condominiums.
Further, the existing stock of housing
will deteriorate. Even in the best-case sce-
nario, with strict enforcement of the
housing code, property owners will have
little incentive to improve or replace any-
thing. Because profit from improvements
will become illegal, it will be cheaper and
faster to repair what needs replacement
rather than trying to pass costs on to ten-
ants, which would involve extensive red
tape. Widespread trends of deterioration
witnessed in rent controlled markets led
"Gunnar Mydal, Nobel Prize-winning
economist and the architect of Sweden's
welfare state to write that rent control 'has
constituted the worst example of poor
planning by government lacking courage
and vision."(Washington Monthly,
"There's Nothing Liberal About Rent
2)The poor get pushed out of
their housing, exacerbating the
homeless problem.
As actual rents fall below market rents,
tenants who normally would have moved
to more expensive apartments stay in their
rent controlled apartments, thus obstruct-
ing the natural upward flow of tenants that
would occur in competitive markets. New

vacancies will not be made for low-income
tenants who depend on this flow of tenants
in order to occupy low-income housing.
"The poor, thus excluded even from the
trickledown of decent housing get little or
nothing from rent control. Improving their
housing requires broadly based financial
help, in place of the unjust- and mis-
taken- pretense that sosidies should
come only from landlords. Decent housing
is a goal to which all society ought to
contribute." (NYT, 5/12/87)
3)Distorted social policy with
increased discrimination.
In rent controlled markets, "the available
apartments have to be rationed by some
device other than price. This of course
may allow landlords to engage in many
forms of subtle and not so subtle forms of
discrimination in choosing ten-
ants."(Edwin Mansfield, Microeconomics,
p. 42) Income guidelines and reference
checks of new tenants will be more strin-
gent. Lower income and student tenants
will beincreasingly turned down because
landlords must minimize their risk by
leasing only to people with good jobs,
few roommates and flawless credit.
If rent control is so destructive ,why has
it received any support?
1)Cheaper Rent. Rent levels will be
unaffected until May 1989. If one consid-
ers finders' fees, the difficulty in finding
an apartment, the condition of rental
housing, very few will benefit while stu-
dents and the poor will get hurt.
2)Ignorance. Many people simply
don't understand what has happened and
will happen in rent controlled cities.
3)Activism. There is a feeling that if
the people band together we can improve
the community. The feeling is admirable,
but it is unfortunately channeled in the
wrong direction. Rent Control will only
hurt those it is supposed to help.
Vote no on proposal C.


Raise the minimum wage


of Representatives Education and Labor
Committee passed a bill to raise mini-
mum wage to $5.05 gradually over
four years. The House should vote in
favor of the bill when it convenes after
the spring recess.
Fifty years ago under the Fair Labor
Standards Act, Congress passed legis-
lation- creating a minimum wage of
$.25 per hour. Since then, they have
raised the minimum fifteen times -
the last time was in 1977 when it rose
from;$3.10 to $3.35. Although the
minimum wage rose steadily from
1938, it has remained unchanged since
1977 while the cost of living has in-
creased 30 percent. Currently, it is im-
possible to support a family and not fall
below the government poverty line.
Minimum wage was originally set at
half the average wage for non-supervi-
sory private workers. It was designed
to keep a family of three out of poverty
and it has fallen behind in its intended
While legislation increasing'the min-
imum wage stood little chance under a
Republican controlled Senate, Demo-
cratic control should allow an increase
to prevail. Further, President Reagan's
influence over Congress seems to have
waned, as evidenced by Congress's
End Mee
THE EXODUS of several top-ranking
Justice Department officials in the past
two days attests to the damage Attorney
General Edwin Meese's arrogance,
debauchery and general exploitation of
his government post for personal gain
has wreaked upon the department.
Deputy Attorney General Arnold I.
Burns, Assistant Attorney General
William F. Weld and four of their aides
reportedly felt Meese's questionable
leadership and the continuous criminal
investigations into his behavior were
harming the department enough to
sacrifice their prestigious jobs. Weld
said U.S. attorneys were worried that
judges and other lawyers would laugh
at them in court because of their boss'
indiscretions. Weld described Meese's
legal embarrassments as a "poison gas"
spreading throughout the department
and hindering its ability to function.
The department was reported in
disarray yesterday as remaining
employees attempted to function under

override of Reagan civil rights act veto.
Opponents in the business commu-
nity believe raising the minimum wage
would do more harm than good. They
fear employees would be forced to hire
fewer workers, or fire some. They also
say that because the existing minimum
wage only applies to certain groups of
workers, raising it would be ineffec-
tive. But if the existing minimum wage
is not enough to keep people out of
poverty then there is no point in having
one at all.
Increasing the minimum wage would
not only elevate the impoverished to a
level of sustenance, but could also
stimulate the economy by providing
more people with more money to
And contrary to what opponents
contend, even those exempt from the
raise would benefit; any rise in the
minimum wage will drive up pay for all
low-income employees.
The business community is using
self-serving arguments based on profit
motive which are neither pragmatic nor
sound advice for the majority of U.S.
wage earners. The Government does
not even have to spend any money to
fight for social equality, it only has to
raise the minimum wage.

Get Out the Vote for Rent Control

By Mark Weisbrot
Charles Coustan's essay against rent
control makes him the first student I've
run across that holds this position. I'm
sure there are others, but they are few and
far between. The outcome of the election
will in fact depend on how many students,
tenants, and poor people vote this Mon-
day. If these sectors of the electorate, who
normally don't vote in April elections,
turn out in even a sizable fraction of the
numbers in which they vote in November,
rent control will pass. If they don't, it will
fail. It's that simple.
So I want to encourage everyone to
help get out the vote: just stop by
the fourth floor of the Michigan
Union any time after 6 p.m. Sunday, or
from 7 to 7 on Monday. The rent you
save may be your own.
Before I address some of Mr. Coustan's
arguments, which are the same as those
made by the landlords, I would like to
commend him for stating up front that he
is not only an undergraduate student, but a
real estate investor.
Mr. Coustan asks, "What have been the
effects of rent control? Why?" Let's look
at his answers point by point:
1. "Reduced supply and quality of hous-
ing." Unfortunately there are no facts here
about the effects of rent control in the
more than 200 cities where it has been
implemented in the U.S., but merely a
textbook argument. There is no doubt that
Mark Weisbrot is a Ph.d. candidate in

rent control will reduce the potential prof-
itability of rental housing. This will have
some long term effects on supply. But the
real question is, how much? Is there any
reason to think that current landlords,
whom everyone agrees are making a
healthy profit, will want to remove their
buildings from the housing market simply
because their rents will only be allowed to
rise at the rate of inflation? No one has
offered any evidence that this is so.
As for new housing, the proposed ordi-
nance allows for it to rent at the free mar-
ket rate, as it comes on the market. Most
new housing that has been built in Ann
Arbor in recent years in not low income
housing. Developers will still be able to
satisfy the needs of rich people for what-
ever price they are willing to pay. Rent
control will protect the low income ten-
ants currently living in Ann Arbor from
being driven out of town, as is now hap-
pening at an alarming rate.
Regarding ,the quality of housing, the
proposed ordinance would not allow land-
lords to raise their rents by the rate of in-
flation unless their units are in compliance
with the housing code. This would give
tenants more power to enforce the housing
code than they currently have.
2) "The poor get pushed out of their
housing, exacerbating the homeless prob-
lem." Mr. Coustan has it backwards here;
this is what has been happening without
rent control. We now know that rents in-
creased by an average of 17.8 percent an-
nually between 1986 and 1988 in Ann
Arbor(this is from the city's latest house-

hold survey, conducted in February and
March). These unprecedented rent increases
force people out of their homes - rent
control would enable them to stay where
they are.
3) "Distorted social policy with in-
creased discrimination." Landlords already
practice discrimination in their choice of
tenants - by race, against people with
children, and whatever else they choose to
do. Would rent control make this situation
worse and how much? Again, no evidence
is offered on this question. It staggers the
imagination to think that such negative
effects of rent control would outweigh the
benefits to the thousands of poor and mi-
nority tenants whose rents will be stabi-
lized by the ordinance.
Rent control is not a permanent solu-
tion to the problem of affordable housing.
I hope that all the "liberals" who are so
concerned about the problems of rent con-
trol will work for publicly subsidized low
income housing and other more permanent
and efficient solutions after we pass this
ordinance. We will need their help.
Exorbitant rent increases are rapidly
converting Ann Arbor to a system of eco-
nomic apartheid, where the people who
work in this city - as well as lower in-
come students - cannot afford to live
here. We need to stop this process of
Yuppiezation before it is too late.
For those readers who have not been
here long enough to see what rising rents
have done to this community, at least
look out for your own interest as a tenant.
The landlords are looking out for theirs.



the cloud of Meese's behavior and the
resignations. Administration officials
tried to pass off the resignations as
routine and re-asserted Reagan's
support of the Attorney General.
The mass resignations were the
biggest shake-up in the Justice
Department since the October 1973
Saturday Night Massacre when
Attorney General Elliot L. Richardson
chose to resign instead of enforcing
Nixon's criminal order that he fire the
Watergate special prosecutor. Reagan's
attitude that Meese is suitable for his
position rivals Nixon's irresponsibility
and refusal to face up to reality.
Meese's presence at the Justice
Department has created a crisis
Reagan should no longer allow the
abuse of powerful positions within his
administration, which has the highest
number of indictments ever. Since
Meese clearly intends to continue his
reign of corruption instead of resigning,
Reagan should fire him.

Bash today

- bong for your rights

By Eric L. Holt and
David Webster
We smoke dope. Lots and lots of dope.
In fact, we are almost always baked. Today
is the seventeenth annual Ann Arbor Hash
Bash and April fools day. The Bash starts
at "high" noon. We'll be there, will you?
We're in general agreement with the
whole Hash Bash concept, but there are
some things about the Bash that really
suck. First of all, Ann Arbor gets to
charge a five dollar admission fee for the
most raucous party of the year. The re-
pressive pot laws in Ann Arbor call for
the issuing of a five dollar citation for
possession of an ounce or less of the
mother herb.
This law should be protested and we've

The idea behind this ploy is to get the
cops so stoned that they can't function. If
carried out effectively, the pigs will get so
baked they'll take off all of their clothes
and start screaming at the tops of their
lungs, "I'm an embarrassment to human-
ity ... LEGALIZE IT!"
All laws against the possession, con-
sumption and distribution of ganja in Ann
Arbor must be repealed. The city has ab-
solutely no right to deprive the people of
their right to sit on the Diag and smoke
huge spleefs, while listening to preacher
Mike tell them they are going to spend an
eternity burning in Hell.
Something else that's a real drag about
the Hash Bash is that lately members of
the Greek system have been donning tie-
dyes and listening to the Dead on CD. No

buy a huge bag (at least a Q.P.) and bring
Vice President Henry Johnson, Dean Peter
Steiner and Regent Deane Baker out on the
Diag to smoke out of his six - foot
bong. No, never mind, we don't want to
smoke with these people either, Too much
We know what some of you are think-
ing ... "I ain't smokin' that shit." Come
on - all the kids are doin' it. Besides, the
Hash Bash is probably the finest institu-
tion at this University. Without pot,
hanging on the Diag on beautiful spring
day is like having sex without orgasms.
Today at "high" noon the party com-
mences. SMOKE OR DIE!!

Su port bli
To the Daily:
Today is "Blue Jeans Day" at University
of Michigan. Lesbian and Gay Rights Or-
ganizing Committee (LaGROC) has
designated this day "Blue Jeans Day" as
part of the second annual Lesbian and Gay


e jeans day
an end to anti-lesbian/gay harassment and
discrimination. Let them know that you
support the amendment to Regental By-
Law Section 14.06 that LaGROC insists
be enacted.
2. Refuse to be a follower: Show that


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