Wednesday, May 21, 2008

Why the ACLU-SC should immediately reverse its position on Proposition 98

Notice, as a result of this article my membership in the ACLU has been revoked effective approximately June 16, 2008.

Support of proposition 98 is the pro-liberty position. Opposing 98 is an anti-liberty position. The ACLU-SC (ACLU of Southern California) has taken a position against the people in favor of the government with regards to proposition 98, for three distinct reasons: Eminent Domain, Environmentalism, and Rent Control.

Starting with the easiest, the ACLU-SC’s argument about environmentalism is flawed. It is said that this is bad for the environment. There are no environmental provisions anywhere in proposition 98. It does not mention any environmental regulations anywhere in the text. The only impact this measure could possibly have on the environment is by limiting the ability of the cities and counties to seize property for the sake of environmentalism. That is an exceedingly unusual usage of eminent domain in the first place, given that the overwhelming usage is either to steal the property for public works or to steal the property to give to favored and politically connected businesses. No environmental regulations relating to the use of property are impacted in any way.

It is said that this "hurts California cities" by making planning more difficult. Well, that’s exactly why it is good for everyone else. Too often cities simply take what they want without regards for the wishes of the owners. Too often the victims of Eminent Domain are the poor and the minority populations of the city who lack the resources to get fair hearings to retain their property and, at the least, force a fair settlement.

Eminent Domain is stealing from the poor to give to the rich. There is no way a person can be an advocate for the poor and allow the government the continued ability to steal property. The ACLU itself has come out against Eminent Domain, citing Kelo versus New London as a travesty of a Supreme Court decision detrimental to the poor.

Few protested the Kelo ruling more ardently than the National Association for the Advancement of Colored People. In an amicus brief filed in the case, it argued that "[t]he burden of eminent domain has and will continue to fall disproportionately upon racial and ethnic minorities, the elderly, and economically disadvantaged." Unfettered eminent domain authority, the NAACP concluded, is a "license for government to coerce individuals on behalf of society's strongest interests."

One cannot have civil liberty without sound property rights. It is not possible. All that is necessary to punish someone for behaving within the law but in ways that annoy the local government is for that local government to concoct a rationale to steal the property, and the nuisance person who embarrasses the city council no longer lives in the city. Eminent Domain is a weapon in the hands of those who desire greater government control over the public and to limit the rights of all.

All of those reasons take a back seat to the big reason the ACLU-SC opposes Proposition 98, and that is because Proposition 98 also attacks rent control.

It is said that if Proposition 98 passes, rent control will disappear and that will hurt the poor.

Anyone who has read the actual text of Proposition 98 knows that there is no merit to that argument.

First of all, rent control will not disappear. As long as the resident lives in the property, it will still be rent controlled. Someone who secures a rent controlled apartment the day before Proposition 98 goes into effect will still have a rent controlled apartment the day after it goes into effect. Every single rent controlled property is grandfathered out, not eliminated out right. This does not do a thing to weaken the situation of those in rent controlled properties.

Second, it is argued that this will eliminate federal fair housing laws. Nothing in the state government can touch a federal law.

Third, it is argued that this will make it impossible for a working or poor family to find available housing. That is the biggest fallacy of them all, as the entire history of rent control from the first time it was implemented shows that it has made housing less available and less affordable in every city that it has been tried in.

It is argued that without rent control nobody would be able to afford housing, which argues that landlords would rather allow property to sit idle than make a profit by renting out the property.

It is argued that without rent control housing landlords will throw people out of their dwellings without warning, an argument that can only be made by one who has never managed a business of any sort.

The truth is that rent control increases the cost of renting.

First, those who have rent controlled dwellings hold onto them for a very long time. If effect, they are hoarding the housing. This includes people who are middle class who secured the properties in their youth when their need for affordable housing was greater, but can easily afford better lodgings now. They remain in the properties because the cost is much lower, keeping out any and all new entrants into the housing market.

Since it is never the case that all of the housing in any city is rent controlled, this increases the demand for housing in the uncontrolled sector, pushing up the prices there. This amounts to a subsidy paid by the poor to those middle class who do not leave their dwellings.

Second, there is little incentive for investors to create more rental properties. Investors have a wide range of options to choose from when deciding where to invest. They could invest in rental properties, knowing that their returns will be low and will diminish in time. They could invest in other areas with much better returns. New rental properties are therefore not built.

Third, because rent control creates shortages, it creates the situation where poor and working families must crown into inferior sizes of housing, sometimes with two or more families in one unit, and it also exacerbates the homeless problem in the city.

The whole argument boils down to two basic economic misunderstandings. First there is ignorance of the laws of supply and demand, and the mistaken and misguided belief that the government can legislate against natural law. Just as it would be impossible for a city council to pass a law repealing the law of gravity, a city council cannot pass a law repealing the laws of supply and demand. When in an open market situation the equilibrium is close to the intersection of supply and demand. When the price is held artificially low by rent control laws, demand increases beyond the natural market state and supply drops similarly. Failure to account for such basic principles is the reasoning behind support of rent control.

Then there is the belief in market failures, that without the guiding hand of government the market is unable to function. People making this argument often say “yes, I believe in the free market, but there must be some controls.” That argument is untenable given the effectiveness record of rent control, as every control has made the situation worse, but that argument is still used all the time. Economic controls always backfire because it is impossible to repeal a natural law. Market failures are always the result government intervention, and using failures as an excuse for further interventions is recommending more poison as the cure for previous poison.

There is also the emotionally laded (but not rational in any sense) argument that by opposing rent control a person is siding with landlords against tenants, but the truth is that by opposing rent control one siding with both landlords and tenants against the government. Every time someone opposes rent control the argument is made that opposing rent control means that the person opposed to rent control hates the poor and loves the rich and wants the rich to profit off of the poor. It has to be an emotional argument because as has been demonstrated rent control actually hurts the poor. The motive for such an economically ignorant argument is "burn the rich."

Yes, proposition 98 is supported by wealthy land owners. They are looking out for their own best interests, just like everyone else. Somehow it is imagined that they should not have the right to look out for themselves. But in this case, their cause is also the cause of liberty. They have just as much of a right to security of property as everyone else. Hatred of the rich is a very base and undignified reason to support or oppose any measure. It is also supported by the Howard Jarvis Taxpayer's Association, which should indicate how much this measure is for the benefit of all against the government.

Finally, this is primarily an Economic Liberty proposition, not a Civil Liberty proposition. Given the horrendous record the ACLU has on economics, and given that the focus of the ACLU is Civil Liberty, that alone should have been sufficient reason to take no position. But since the ACLU-SC decided to take action, it is imperative that economics be studied sufficiently to understand that support of Proposition 98 is the only position in line with the desire to increase liberty. It increases the liberty of the rich and the poor, it increases the opportunity of the rich and the poor, and not only does it fail to legislate against reality it instead opposes legislation that oppose reality.


Ayn R. Key said...

As a result of this article, my membership in the ACLU has been revoked.

Anonymous said...

Aside from the facts that this is very dated; that Prop. 98 passed handily; that rental property owners are still in business; freedom is still pretty much alive and well in our land; and Mr. Gonella's analysis was wrong, it needs to be said that his membership in the ACLU was never revoked, unless that was an action he foisted upon himself.

Ayn R. Key said...

If anonymous had read the article, he'd have a response that relates to the article. 98 did not pass, 99 passed. 98 ended rent control. 99 did not. 98 limited eminent domain. 99 pretended to. 98 was preferred by Howard Jarvis and the Libertarian Party. 99 was preferred by politicians and the ACLU-SC.

And my membership was revoked. They disaffiliated me.

As for being dated, your comment was written in 2009 while the article was written in 2008 - BEFORE the election. It is not the article that is dated, it is your response.

Next time you respond, try using facts. And if you're going to call me a liar, hiding behind the mask of anonymity is quite cowardly.