4 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~)- 4 4 4 4 , 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 '1'