New York City breadlines

Zohran Mamdani, a candidate for New York City’s mayoral Democratic primary, proposes to address the city’s housing and affordability crisis through rent control (rent freezes and public housing projects) and city-owned grocery stores.

It is about time for New Yorkers to realize that their solutions to the housing crisis are making the problem worse. Since the 20th century, New York City has enforced extensive rent-control policies. If they had worked to lower the rent and improve the quality of rental units, there would no longer be a problem. There is a strong consensus among most economists across various ideologies that rent control policies eventually decrease affordability in the long-run while diminishing housing quality and supply. Freezing rent hurts both the landowners and renters in the long run. Constituents must recognize that public servants care less about the long-run outcomes of their detrimental policies than about short-term political wins.

On the supply side, Mamdani proposes extensive public housing projects. His focus is on the wrong place. The problem was never greedy landowners, but corruption in building permitting and inspections, excessive regulations for builders, and inefficient contracts awarded to corrupt contractors. All of this results in increased costs for building and managing that get passed onto the consumer. Landlords should be competing with other landlords, not with the corrupt local government and their anti-entrepreneurial policies.

If rent prices naturally regulate themselves due to government deregulation and competitive policies, grocery stores would keep their operation costs low, reducing the incentive for further price hikes. New York City’s cost of living is high not because of corporate greed, but because the costs of running businesses are higher. When complex regulations, inefficient labor laws, and real estate scarcity all increase the cost of business, businesses have no option but to raise prices or shut down.

History shows that punishing entrepreneurs through excessive regulations, price controls, and corrupt government practices has decreased the welfare of citizens. New York City residents must decide they want real affordability driven by competition or a government that blames the markets for the problems they impose upon themselves.