The debate about rent controls prompted me to recall the following:
When I was an undergarduate at Manchester in 1975 I had an interesting exchange during an economics seminar.
Our tutor had gone thru a long explanation of why housing subsidies distorted the market and ended up disadvantaging the poor they were intended to help. He concluded we should logically oppose housing subsidies.
I spoke up to point out that wasn’t the only possible logical response. If the housing market inevitably disadvantaged the poor, I said, maybe we should get rid if the market in housing?
His response genuinely shocked and surprised me at the time – he told me I should f*** off to Russia if that’s what I thought. Not what I expected from an academic, perhaps naively. (At the time Manchester’s economics department was well known for its strong right-wing bias).
Completely free markets in housing rarely exist and where they do they do indeed disadvantage the poor. They rarely supply all the housing a modern society needs ti function well – including for labour markets to remain flexible. As a result many – most? – modern states use some forms of regulation, subsidies and public or social ownership housing.
Indeed the current Coalition government has been busily offering all sorts of subsidies to house purchasers and interfering in property rights (right to buy) to distort housing markets in directions it wants. Whatever the merits of rent controls, the criticsm that it is in principle wrong to intervene in ‘the markets’ is nonsense, and hypocritical nonsense at that.