I posted on this a week or so ago when the suit was first announced with great fanfare, but here’s an analysis by Rick Manning, Preesident, Americans for Limited Government:
Suing a price monitoring software company is not going to solve this problem, but in a world where blaming something is more valued than doing the right thing, it is to be expected.
Vice President Kamala Harris and the recently tossed aside President Biden continue to amaze with their lack of basic economic awareness.
Their latest ostrich move is their call to set rental housing price controls at 5 percent and throw the full weight of the federal government against a software company that monitors rental prices and suggests price ranges for comparable units to property managers. The property managers then have full autonomy to choose whether or not to follow those price recommendations.
The irony is that the pricing software merely mirrors the market. A neighborhood with declining desirability and low demand would likely see rents remain the same or go down, while a high-desirability and high-demand area might see rental costs increase.
Democrats may not like it, but that’s how our market system works—prices rise and decline based on the invisible hand of supply and demand.
For those policymakers who have caused a housing shortage through policies that created scarcity of both new home and rental unit building, the software program is merely a messenger that shows the real-world impact of bad policies. Progressive cities, often run by the environmentalist, not in my backyard crowd, that have put barrier after barrier up to stop new development and are responsible for making housing unaffordable, must find somewhere to shift the blame.
An additional strain on the housing supply is the steady flow of thousands of immigrants flooding our borders—a challenge straining the housing market and social services of places like New York, Boston, and the Bay Area of California.
The basic laws of supply and demand are taught in the first week of any economics class. When demand (in this case, desire for housing) exceeds supply, prices go up. This price increase incentivizes those who would build housing to get busy and create more units, risking that the demand will still exist when their new or converted units hit the market.
Leftist policies that hamper if not make the building of even low-cost new units nearly impossible, also often create substantial add-on costs to housing, which increases their costs to the consumer.
So, what do the lawyers in the Biden-Harris administration propose to make housing more available and affordable?
Get their Justice Department to file a misguided lawsuit against using software that applies data-driven housing price models in rental housing. In other words, find someone to blame by deciding to allege that a politically neutral rental pricing software is illegal.
After all, data-driven software that signals that prices are too high or too low must be the reason why prices in places like Harris’s San Francisco have skyrocketed.
Pay no attention to San Francisco’s nuttiness when it comes to housing policy. Years ago, housing developments along parts of the Bay were actually stopped due to concerns about something known as the ‘salt marsh harvest mouse.’ The grounds for the initial federal lawsuit to prevent these developments were they were intended to be built on land adjacent to the mouse’s natural habitat, and in the event of global warming-induced sea rise, that land would be needed by the mouse for its survival.
Now, there are millions of dollars of government studies about the mouse, but nary a one about the impact the subsequent reduced number of housing units available have on the humans who live in the area.
Millions of voters face housing cost inflation. Suing a price monitoring software company is not going to solve this problem, but in a world where blaming something is more valued than doing the right thing, it is to be expected.
…..
Maybe, instead, the solution to the affordable housing crisis is to hire a builder to be president. Someone who has actually built buildings and created housing units. Someone who has dealt with federal, state, and local governments and bureaucrats to get something built.
What a radical approach, putting someone in the White House who actually knows what he is doing.
I recently saw a count of the D.C. politicians and their deep state flunky regulators that have actually run a business in a prior life: the result was close to zero, which explains a lot.
Here’s a portion – the bulk os paywalled — of George McGovern’s infamous 1992 letter to the WSJ on what he discovered when he tried to operate a business:
Letter from George McGovern to Wall Street Journal (June 1, 1992)
In 1988, I invested most of the earnings from this lecture circuit acquiring the leasehold on Connecticut's Stratford Inn… In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn's 43-year leasehold. I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender.
… my business associates and I also lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I never doubted the worthiness of any of these goals, the concept that most often eludes legislators is: `Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape.' It is a simple concern that is nonetheless often ignored by legislators.
For example, the papers today are filled with stories about businesses dropping health coverage for employees. We provided a substantial package for our staff at the Stratford Inn. However, were we operating today, those costs would exceed $150,000 a year for health care on top of salaries and other benefits. There would have been no reasonably way for us to absorb or pass on these costs.
That’s the headline of a report to be released Wednesday by the Committee to Unleash Prosperity, compiled by Stephen Moore and Jon Decker. The pair studied the résumés of 68 top executive-branch officials whose work shapes the economy—from President Biden and Treasury Secretary Janet Yellen to White House special assistants on economic policy.
“Average business experience of Biden appointees is only 2.4 years,” the authors found. Any fresh-faced 25-year-old on Wall Street has clocked more private business hours than most of Washington’s top officials. Sixty-two percent have “virtually no business experience.” By contrast, the average Donald Trump cabinet official had 13 years of experience in the private economy, the authors say.
Some familiarity with business is especially important given that President Biden and Vice President Kamala Harris have spent their lives in law or politics. But the authors found that Biden economic officialdom is dominated by careers in law (20), politics and government (21), and academia or policy-making (12). The main business experience is in venture capital or investing (five).
