Rent Control And the Penultimate Solution; S. Gardner

I can readily understand why. For the past fifty years, rent control has been a sacred cow of statism. In fact, this law is considered by many to be among the crowningachieve ments of enlightened social legislation. As a former owner of a small Manhattan townhouse with just six residential tenants, I had occasion to experience this" crowning achievement" first hand. During the ten years I owned this property, I was involved in thirty or forty administrative actions, which included assorted rent rollback hear ings, illegaloccupancy determinations, non payment proceedings, violation sum monses, unauthorized subleases, and rent overcharge rulings, all precipitated by my tenants' unlawful conduct. Mr. Gardner, aformer landlord and proponent of free-market housing, is a newspaper columnist and author ofLive Rent-Free for Life, a satirical expose ofthe New York City rent-control system. In every case I found myself at the "en lightened" mercy of a group of judges, politicians, and bureaucrats who exhibited such biased and vindictive attitudes toward landlords that I began to feel as though I were a Jew in Nazi Germany.

At first I dismissed this feeling as an outrageous over-reaction to the difficultiesI was going through. Having had relatives who perished in the Holocaust, I tried to convince myself that this inappropriate comparison was the product of my own imagination. Mter doing some additional research, I came to the conclusion that this apparently innocuous law called rent con trol is not so benign as its proponents would like us to believe it is. While there are obviously many differ ences between rent control and Naziism, both systems display similaritiestoo numer ous to ignore. The sad truth is that when rent control's rhetoric of humanitarianism is peeled away, underneath is a political phi losophy ominously similar to fascism. I am aware that in today's entitlement oriented society, there is a great resistance on the part of the social liberal community to see rent control in any but the most humanitarian light, claiming it provides a measure of protection for the poor and the downtrodden. Naziism initially was also seen as a great benefactor of the poor by many observers both inside and outside Germany.

230 Long before Hitler embarked on his pro gram of mass extermination, Nazi discrim ination and restrictions against the Jews were primarily economic in nature: expul sion from the professions, confiscation and destruction of commercial property, extor tion of money for ransom and exit permits. To avoid trivializing the Holocaust and invoking visions of Auschwitz, I therefore limit my comparison of rent control with the early treatment of the Jews at the very beginning of the Nazi regime. The analogy between rent control and Naziism starts with the disturbing fact that while it is unfortunate for people to be antagonistic toward landlords (or Jews as the case may be), it is extremely dangerous to have these prejudices mandated by gov ernment, codified by law, and politically enforced. Rent control laws that have been en trenched in communities like New York City, Berkeley, and Cambridge implicitly assume all landlords are greedy scoundrels and need to be disciplined and punished for exploitation of their tenants (who are all paragons of virtue in desperate need of protection against such monsters). By singling out landlords for such "special"

treatment-and making it the law-rent control's similarity to the Nazi policy of discrimination against Jews becomes readily apparent. Rent control is based on a denial of the notion of equality before the law. For ex ample, in New York City, any and all statements by tenants are automatically ac cepted at face value as true, while every allegation by a landlord must be accompa nied by documented proof. While there are dozens of official complaint forms, tele phone hotlines, and agencies dedicated to protect tenants against their landlords, noth ing similar is available for landlords' pro tection against their tenants. While tenants are given free legal counsel by the city, landlords must assume these costs pri vately. And finally, the law specificallyfor bids tenants from entering into separate rental agreements with their landlords, thus abrogating property 'owners' rights of vol231 untary contract. But this double standard before the law is just the tip of the iceberg.

While rent control stops short of confis cating a landlord's property outright like the Nazis did to the Jews, this law does force landlords to subsidize their tenants regard less of whether the tenants need such sup port or whether the landlords can afford to give it. The large numbers of wealthy tenants enjoying the benefits of rent control includingsuch luminaries as a former mayor of New York City, a city housing judge, a state assemblyman, the U.S. Ambassador to the United Nations, and an heiress to the MCA fortune-have been well documented in the press. This irrational system lacks even the ap pearance of logic, which underlies welfare state redistributionism that requires the rich to subsidize the poor. Yet despite its irra tionality, rent control has remained in force so many years for three primary reasons: • Landlords area small minority of the voting population. • Landlords cannot pick up their proper ties and move them across state lines to escape such restrictions.

• A combination of envy and animosity toward landlords as a group has created a climate of public indifference to their plight. One of the hallmarks of totalitarianism is the use of group stereotypes as a way of achieving certain ends. When Hitler said that "Jews are parasites sucking the life blood of their hosts," he wasn't talking about one or two individual Jews; he was talking about all Jews. The deliberate vili ficationof a whole class of people fosters the hatred that is the first step in a campaign whose ultimate goal is the destruction of that group, as the world to its horror eventually discovered. When I hear local politicians calling land lords, "greedy speculators gouging their tenants with unconscionable rents," they are not talking about one or two individual landlords; they are talking about all land lords. (By an interesting coincidence, in the Nazi party newspaper, Volkischer Beobach ter, Jews were condemned as " ... foreign 232 THE FREEMAN • JUNE 1993 landlords who pocketed the money of Ger man tenants.' ') Landlords are capitalists, and the anti-capitalistic mentality prevalent in Hitler's Germany may be found in Amer ica as well.

Propaganda has a powerful impact on public opinion. If you repeat something loud enough and long enough, a lot of people will believe it, no matter how preposterous the statement may be. When the Nazi press attacked the German Jews as vicious, un scrupulous, money-grubbing scoundrels the same terms in which capitalists have been denounced for more than a century even the Jews began to have doubts. Coin cidentally, those are the very same adjec tives used today by American politicians and journalists to describe American land lords. When the Village .Voice headlines the "Ten Worst Landlords of the Year," or former New York City Council President Andrew J. Stein's lists of "The Dirtiest Dozen Landlords," it seems to me that Herr Goebbels himself could not have planned a more effective propaganda campaign to dis credit all landlords for the faults of a few. Once the smear campaign has been effec tive, it is relatively simple to deprive the victims of their fundamental rights, and to do it in a tone of moral righteousness. After all, if New York landlords, or German Jews, are that despicable, they deserve to be treated as criminals.

In Germany, punishment for Jews arrived in the form of Adolf Hitler's Nuremberg Laws of 1935, a set of statutes designed to "protect" the German Volk. The govern ment deprived Jews of their rights of citi zenship as well the right to own any business or property. As a result of those laws and the tacit permission they granted, the legal restraints and civil niceties normally observed be tween fellow citizens broke down and the floodgates of prejudice were opened wide. It became a profitable game for anyone to cheat, denounce, discriminate against, or confiscate the property of Jews without having the slightest pangs of conscience or suffering any legal consequences. In New York, punishment for landlords came about as a result of the Rent Control Law of 1943, a set of statutes designed to protect the city's tenants from "rent goug ers." The government officially deprived landlords of the most fundamental tenet of property ownership: the right to charge free market rents. Imposed during the War, the law was justified as a temporary wartime necessity.

After the war, however, when the vast majority of such emergency statutes were repealed across the nation, New York's rent control law, for various political reasons, was kept on the books. As a result of rent control and the tacit permission it grants, in New York City it is considered socially acceptable, if not morally praiseworthy, for tenants to cheat, denounce, discriminate against, or confiscate the property of their landlords without having the slightest pangs of conscience or suffering any legal conse quences. Most law-abiding New Yorkers would rather die than swipe a loaf of bread from their grocer; most would never dream of stealing a coat from their tailor. Yet these same people haven't the slightest qualms about violating their contracts and illegally subletting their apartments, falsifying their true primary residences, withholdingrent for years by means of convoluted legal tactics, demanding enormous sums of money from landlordsto move, or complainingto anyone of a dozen government agenciesabQuttrivial or nonexistent violations in order t~ thwart and delay legitimaterent increases.

A similar thing happened in Nazi Ger many. There was a segment of the populace who did not necessarily approve of Hitler's treatment of the Jews, but who were all too ready to cash in on the results. They took advantage of the situation to enrich them selves at the expense of their Jewish neigh bors. I suppose it is an unfortunate failing of human nature, but when government gives people a license to steal, it takes a very highly principled person to resist the temp tation. Our entire structure of political re distribution of wealth is based on an implicit RENT CONTROL AND THE PENULTIMATE SOLUTION 233 recognition of that fact. In New York City, for example, there is no penalty for defraud ing your landlord or for committing any of the actions listed above. There is only re ward for the unscrupulous tenant. Yet land lords are routinely given stiff penalties in cluding fines, treble damages, and jail sentences for relatively minor infractions of the law.

The Jew in Germany had no remedy in law; the courts were in Hitler's pocket. Instructions to the police and Gestapo were well defined: The National Socialist state did not want the Jews, but it did want their property. The Jews had no choice but to abandon their property and flee-if they could. The landlord in New York also has no remedy in law; the courts have upheld the city's right to control rents even though it violates the property rights guarantee of the Fifth and Fourteenth Amendments. With government policy dedicated to making rental property ownership a losing proposi tion, many landlords had no choice but to abandon their buildings and lose their life savings. Since the imposition of rent control, the city has confiscated in rem 20,000 such abandoned structures containing over 100,000 apartments; at the time perfectly usable apartments that could have eased the city's chronic housing shortage and relieved the plight of the homeless. Instead, most of these buildings have turned into vacant wrecks giving refuge only to drug pushers, addicts, and prostitutes; mute testimony to the social cost of rent control.

Every election brings out an assortment of social-liberal candidates who try to outdo each other in currying the tenant vote by squeezing the landlord even harder. The imposition of commercial rent control as wellas various proposals for permanent rent freezes and anti-warehousing legislation are typical examples of such "enlightened" civic thinking. Set against a background of landlord bashing, political pandering, and tenant av arice, it is no wonder that every time the city holds its Rent Guideline hearings, the meet ingsare dominated by rowdy, mob-frenzied, Brownshirt-like demonstrations by highly organized tenant activists who shout down opposition speakers and attempt to disrupt the proceedings. In a lawsuit filed by five major real estate firms against the Rent Guidelines Board, affidavits by two members of the ROB claimed that they were unable to perform their duties, because' 'throughout the meet ing there were threats, intimidation, and harassment. This was accompanied by in cessant and deafening noise, demonstra tors, whistling, chanting and banging of chairs. "

I'm sure that none of the foregoing dis graceful situations was foreseen by those who originally drafted the rent control stat utes. But illegal tenant activity, biased judges, hostile administrators, political op portunism, negative public opinion, and mob action against landlords are just as much in effect in New York as they were in Nazi Germany against the Jews-and they have turned rent control into a national travesty. Despite the overwhelmingevidence of the financial and social damage of rent control laws, politicians in New York, Berkeley, and Cambridge, among many others, have succeeded in keeping alive this iniquitous system that most Americans repudiated years ago. It is time we Americans were jolted out of our complacency and made to see rent control for the evil it really is: bigotry pretending to be benevolence, anti-capital ism pretending to be humanitarianism, and demagoguery disguised as democracy. 0 THEFREEMAN IDEASON LIBERTY SEXUAL HARASSMENT: WHAT Is IT?