Californian Rentals & Real Estate are Extremely Expensive Because of Government Intervention

I read a very interesting article today about a topic I’m very passionate about. You can read this BusinessInsider.com article by clicking the link below

California real estate is so expensive that families, retirees, and even tech workers are living in cars and vans

The first thing I’d like to say is that poverty first begins in the human mind, poverty an actually be taught to children by adults, in many instances by parents who over the years developed bad habits which they inevitably pass on to their offspring. When this poverty state of mind gets embodied by young adults they often stop reasoning and instead look for easy answers to problems. It’s at this stage where politicians often use people in poverty as their platform for more government intervention.

The harsh truth about economics and poverty is that the governments only job shouldn’t be to eliminate poverty but to help prevent exploitation. How do you prevent exploitation you ask? You prevent exploitation by teaching people that there are pros and cons to every action. As an example, if I’m a politician and I say to the people I was told that rent is too high, so what I’m going to do is create rental controls, immediately the citizens should ask a common sense question which is, we’ll Mr. or Ms/Mrs politician won’t creating rental controls prevent rental housing from being built?

Yes, if you’re reading this, just so you’re aware the moment you create rental controls the private citizens or corporations that build rental apartment buildings will instinctively stop building rental apartments. If you’re wondering why companies stop building rental housing once government creates rental controls the answer is simple. Rental controls are a cap on earning potential.

Now at this stage, you can argue all you want about how unfair this is, but even the government doesn’t like to get into the home building business if you’re wondering why the government doesn’t want to build housing for poor people the answer revolves around the cost of maintenance. Apartment buildings, which there are very few for obvious reasons in California require elevator repairmen, apartments also require the government to hire people to clean up the mess left by tenants. Contractors have to fix or correct structural issues, plumbing issues, electrical issues and on top of this because this is housing for the poor the government is going to get little to no rent from the occupants.

So, in reality, providing housing for the poor has no motive for profit from the government. So in many instances what the government will try to do is pay people in the private sector to house people who are receiving government assistance(s). That said what ends up happening are horror stories about tenants who are receiving government assistance, furthermore because of the regulations that revolve around people who are receiving government assistance, it can be hard for Landowner to kick out a tenant who is getting government assistance, which leads to most landlords not wanting to rent to them.

To add to the problem is the difficulty qualifying for any government program, the bureaucracy involved in getting into and out of these sorts of programs is quite difficult which is also very costly because government workers are often paid whether their method of housing the poor is profitable or not. Some could argue that an inefficiently run government is good for government employees because again Government employees have jobs as long as that government program exists, and if a government program is run efficiently there’s a good chance that many government workers might lose their jobs. Which is why in a freedom based society good deeds are supposed to be fueled by volunteerism.

So what’s the real problem in California? The problem is the government, California is very leftist and very left-leaning politically. The typical outcome of left-leaning cities is poverty. Sure it never happens right away, but the decay in society is pretty obvious after a few years. The interesting thing about Left-leaning cities is that people looking for free stuff tend to move to these places first.

Free stuff is very alluring to people who come from nothing and have no education about basic economics. What looks disastrous to a person like me might seem like a great place to immigrate too for a person who has seen worse. As more and more of these type of people gravitate to this welfare hotbed more and poorer people will compete for dwindling housing supply.

This disaster in its entirety was actually created by the government. So am I saying if the government did nothing about housing in California things would be better? My answer is 100% yes. If the government got rid of rental controls and excessive regulations that only the very rich in California can pay for then this problem would be solved quickly.

How do you ask? Because when a property is owned by private investors they’re going to do everything in their power to attract the best tenants, why does this matter you ask? Because humans aren’t stupid, humans will behave if they have to behave. If people in a society know that the government won’t be there to offer them free housing and also that landlords can kick them out or raise rents if tenants are destroying the property people will instinctively take pride in their rental unit. This type of thinking will permeate through California. People misbehave in a civil society because the option is available to them.

Humans push their luck because they have alternatives and other options when a culture of love and caring for each other is established people will know that there are real consequences for their actions. This is the concept of property rights, a smart landlord will not raise rents on tenants just because he or they can if he has real competition, meaning that another builder can build a building or buildings nearby, in the real world bankruptcy is a real thing. If you’re not a good business person your business will go bankrupt, the world is littered with landlords that went bankrupt because they thought they could simply raise rents and not provide a service equal to their high rent prices.

 

The fictional world in most left-leaning cities revolves around government intervention in the name of protection or raising the standard of the poor. The government in a sense trying to fix cosmic justice. No good deed goes unpunished, that’s the real world, sometimes God or a higher power will create cosmic challenges for people to overcome as individuals.

The politicians often try to play the role of superhero, well even in the comic books where there’s a superhero there exists a supervillain. The reason a superhero requires a super villain is that otherwise, life would be boring, nature, the simple laws of nature all on their own can make life a fantastic experience, it’s the people that try to CONTROL EVERYTHING that ruin society. Going forward I hope people can learn to be more caring and more volunteeristic instead of relying on the government.

In my opinion, Californians might like the way things are, when a culture is formed sometimes that’s just the culture and there’s nothing that can be done about it. But the solution to their housing dilemma is quite simple. Remove the silly regulations and let the free market flourish. Let me add that free market system isn’t perfect, the free market will never be perfect, but it’s better than the government intervention model.

Interesting times ahead.