In April 2020, the town council in Montclair, New Jersey, passed a rent control ordinance. The Montclair Property Owners Association (MPOA) launched a petition drive to submit the ordinance to a referendum. The town clerk refused to certify the petitions, but on February 22, 2021 a judge ordered the town council to repeal the ordinance or submit it to the voters. While MPOA is correct to fight against the rent control ordinance, it has surrendered its most valuable weapon.
The destructive consequences of rent control have been well known for decades. By imposing arbitrarily low rents on landlords, rent control discourages investment in rental housing. One result is a shortage of housing. Not surprisingly, most economists oppose rent control. Indeed, the Swedish economist Assar Lindbeck once noted, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
In opposing rent control, these destructive consequences are certainly worth noting. But the impractical results should not be the foundation for opposition. After all, the Montclair town council (and many other legislative bodies across the country) enacted a rent control law despite the well-known consequences. Arguing against rent control on the basis of its impracticality is itself impractical.
To effectively oppose rent control (or any property rights violation), one must adopt a position founded on moral principles.
As an example of the wrong approach, in an open letter to voters in September 2020, MPOA stated:
We acknowledge that there were unconscionable rent increases for some tenants and expressed our commitment to work to prevent that in the future. We don’t think rent control is the best solution, but most property owners live with rent control in other towns and it could work in Montclair, as well. But this Ordinance is an inexcusably poorly conceived and crafted document that the tenants themselves should object to.
In other words, MPOA isn’t opposed to rent control as a matter of moral principle. The association just doesn’t like the particular version passed by the town council. This approach will fail in the long-term because it cedes the moral principle involved—the right to property.
The right to property means the freedom to produce, trade, use, keep, and dispose of material values. It means that if one wants to offer a property for rent, one is free to do so. It means that one is free to establish whatever terms and conditions one chooses, including the amount that will be charged for rent. Others are free to accept or reject those terms and conditions. Property rights protect the freedom of landlords and tenants to trade on whatever terms and conditions that they find mutually acceptable.
Rent control removes this freedom from landlords. Rent control establishes the terms and conditions of rental properties, and landlords have no voice or choice in the matter. The desires and judgment of landlords are rendered irrelevant.
Legally, a referendum to repeal the ordinance is proper. But that campaign must be founded on moral principles. The ordinance should be repealed, not because it is destructive, but because it is immoral. The ordinance violates the rights of property owners.
Our rights, including property rights, are not subject to a vote. If rights can be removed by voters, then rights are nothing more than temporary permissions that can be revoked whenever enough like minded people choose to do so.
Sadly, the victims of property rights violations often surrender the moral high ground. Instead of defending their moral right to use their property as they deem best, they compromise and accept some controls and restrictions, so long as they don’t go “too far.” And then, when activists make new demands for more controls and restrictions at some point in the future, the victims are defenseless. The victims can’t defend their rights as a matter of principle, and so, they are left to bicker over details. They can only complain that a particular proposal is poorly conceived or unenforceable.
The moral argument is the only practical argument.