Gavin Newsom’s rent forgiveness scheme assures that rent will continue to spiral out of control
California’s Dem. Govenor Gavin Newsom has just assured that rents there will continue to skyrocket in price and spiral out of reach for most of the residents.
That’s because he said the state will pay all the late rent of every Californian:
California will pay residents' past due rent accrued during the COVID-19 pandemic.
Gov. Gavin Newsom announced that the goal was to give renters a clean slate. pic.twitter.com/MA0BmRmW2l
— WRTV Indianapolis (@wrtv) June 22, 2021
Now look, some of this will undoubtedly help people who really need it. But here’s the problem – some of this money will go towards people who really can’t afford to live in the place they’re living. This just kicks the can down the road, and in the meantime, rents (and probably property values too) will continue to skyrocket.
Some people are going to point out that California has rent control. It does. And that will make rent skyrocket too because it incentivizes people to stay in their apartments and never move. That means every new apartment unit will have much higher rents on and on forever.
It’s an unpleasant thing but evictions are a kind of relief valve for inflated markets. There is a high demand for more rental units, and because there haven’t been enough units built in the last ten years, there’s very low supply. Evictions, as terrible as they are, are a way to increase supply where it’s needed.
Instead, California is choosing the short term gratification that will lead to more long term pain. Reality keeps trying to teach us the same lessons, and stupid people refuse to learn them.
It’s the classic cycle of socialism. Some things are bad, so people blame the rich and turn to socialism. Socialists make it worse, blame the rich, and call for more socialism. More socialism makes it much worse, so they blame the rich and demand much more socialism…