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Opinion
Page 8 Thursday, June 18, 1981 The Michigan Daily
The Michigan Daily
Vol. XCI, No. 31-S
Ninety Years of Editorial Freedom
Edited and managed by students
at the University of Michigan
Stockpiling
the world
A MERICA'S DECISION to sell lethal
military arms to China is international
pragmatism at its most cynical. Though the
Reagan administration harbors no historical
love for the Peoples' Republic, the White House
is now- perfectly willing to cozy up to rulers
whom doctrinaire Reaganites used to regularly
castigate as "bandits."
Clearly, expediency speaks louder than
ideology. The ancient conservative litany
exalting "noble Taiwan" is now to be primly
discarded for the sake of diplomatic paranoia
over the big, bad bear to the East: The
Russians are coming, and we must all prepare
for the worst.
Our new China policy exemplifies
Washington's ever-increasing penchant toward
militarism as a problem-solver. More than
ever, America seems locked into a rigid com-
mitment to arm the world: We bestride the
narrow earth like a colossus, dispensing
missiles here, phantom jets there, tanks prac-
tically everywhere.
The bulk of our foreign aid goes not for food or
housing for the world's poor-it goes for ar-
maments for the "defense" of their respective
governments. Our mania for military stock-
piling extends beyond the mere selling of our
own weaponry, as Washington's current, coer-
cive pressuring of Japan to increase its defense
spending bears out.
Global military commerce is hardly a new
American pastime. Yet the siege mentality the
Reagan administration now applies to inter-
national relations heightens immeasurably the
risk this planetary powder~keg will soon ex-
plode: In a good-guys vs. bad-guys world,
someone's sure to start shooting.
Gindin
To the Daily:
Congratulations to Mark Gin-
din ("Common Sense: The Rent
Control Game," Daily, June 13)
on passing Econ 201. He's
learned his supply curves
and demand curves very
well - especially the sup-
ply side.
But you see Mark, those models
only work for widgets in sim-
plified models, not for housing
stock in the campus area.
Perhaps I can dispell a few
serious misconceptions:
First, rent control DOES NOT
"have the effect of reducing and
perhaps eliminating the lan-
dlord's profit." Rent controls now
in effect throughout most of this
country are "moderate" as op-
posed to "restrictive" controls,
such as those imposeddhere
during World. War II, during
Nixon's wage-price freeze and in
your own post-war France exam-
ple. "Moderate" controls provide
owners with annual rent in-
creases to compensate for in-
creases in operating coats and
taxes.
The laws also provide incen-
tives for capital improvemen-
ts, something that is not provided
for in the local housing "free
market". If the allowable rent
fails to provide for a reasonable
return on investment or to cover
costs for major capital im-
provements, the landlord may
apply for a "hardship increase"
in rents charged.
To simplify all this for you,
Mark, moderate rent controls
have the following features: (1) a
guarantee of a fair and
reasonable return on investmen-
ts; (2) all increases in a lan-
dlord's operating costs must be
economics...
passed along to tenants in the more housing. The supply curve
form of increased rents; and (3) is horizontal. "Free market for-
all new multi-family construc- ces" don't apply here.
tion is exempt from controls. Disillusioned, Mark? Actually
Second, since moderate rent there is one way we can make the
controls exempt new construc- "free market" work a little bet-
tion and allow owners to pass ter. There is land that the
maintenance costs on to tenants, University owns and has con-
moderate rent controls do NOT sidered building on - across
lead to disinvestment in rental from West Quad, East Quad and
housing. Studies have actually on North Campus. But the Regen-
shown increases in some rent- ts felt it wasn't worth their while.
controlled cities' rate of new con- Maybe you'd like to stop by and
struction. While there is a find out the details on why the
nationwide decrease in new con- U' has neglected its respon-
[F X F tA- JE1
f /FOR-THE-WEAlTIV
SOIEY~)-
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, Theyre proposing poor people work for their subsidy!
You don't suppose they'd do that to us, too?'
struction, this decrease is taking
place in non-rent-controlled cities
as well. It is based on the costs of
land, money, labor and materials
- NOT rent control.
Thirdly, in Ann Arbor - and
especially in the central census
tracts where most U-M students
live - there is no room to build
...sadly out of
To the Daily: becomes a justifiable measure in
I read with great consternatioi the eyes of both HUD and the
Mark Gindin's banal essay of Supreme Court.
rent control, misappropriately In Ann Arbor there are no land
entitled "Common Sense." Mr. tracts large enough to build new
Gindin's trite analysis is paled housing in the central eight cen-
only by his inability to com- sus tracts (campus area). The
prehend anything more complex only way a new landlord can get
than . the supply side into this "free market" is by
Reaganomics that he heard on buying existing housing, not by
the telly the night before. building new units. It is this
The rent freeze that Mr. Gindin buying and selling of units that
refers to incorrectly as rent con- lure the investor because they
trol occured only at three times in lead to a large return on invest-
our nation's history - World War ment due to inflation.
I, World War II and the Nixon 90 What about the tenants who are
day freeze on wages, prices, and actually buying the building for
rents. the landlord through the acruing
Rent control, on the other of their collective rents? Nothing
hand, (allowing for pass through - they can paper their walls with
of costs) is a temporary measure Mark Gindin's "Common Sense."
employed when the housing Why not spend some time in the
market fails to provide adequate streets and homes of any of our
housing (an equitable vacancy nation's cities - or in Landlord-
rate is roughly 5 percent). When Tenant court in Detroit where the
the vacancy rate dips below this average case lasts six minutes,
figure - as it has in Ann Arbor with judgements favorable to the
ever since the early 1950's - landlord issued nearly 90 percent
falling below 1 percent for most of the time? There you will see
of the last decade - rent control the housing crisis at its most ar-
sibility'to build new housing. In
the meantime, we had better
start considering rent control as
a serious option.
-Dale M. Cohen
Financial Coordinator
Ann Arbor Tenants
Union
June 15
whack
ticulate - talk to them about the
"free market."
Rent control is not a panacea,
but it is a step toward better
housing and a wonderful
organizing tool where neighbors
meet each other and redefine
their community. Other steps in-
clude the co-op movement (not
for profit housing), eviction con-
trols, tenant management and
dozens of other innovative ideas
to give housing back to the
people.
At a time when nearly a quar-
ter of all American tenants must
choose between eating and
paying their rent, Mr. Gindin
must begin to understand and
appreciate the complex issue
which he chooses to undertake -
until then, his column should be
reserved for your Monday
edition.
-Richard S. Levick
Campus Program
Coordinator
PIRGIM
June 15
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