In late March, the Montclair (New Jersey) Property Owners Association reached a compromise with city officials over a rent control ordinance the city passed in 2020. Landlords had petitioned for a referendum on the ordinance. As a part of the compromise, landlords agreed to withdraw their petition. Landlords may think that the compromise serves their interests. In truth, they just granted the city complete control over rental properties. Compromise is surrender.
The compromise applies rent control to more properties than the 2020 ordinance. In exchange, landlords will be allowed to raise rents more than the ordinance allowed. Perhaps this will be beneficial to rental property owners in Montclair in the short-term. But the long-term consequences are going to be destructive.
Since passage of the rent control ordinance, landlords have said that they want a better ordinance. In other words, they aren’t opposed to the city government dictating how much they may raise rents. They just want those dictates to be more “reasonable.”
The compromise will allow landlords to increase rents by 4 percent per year. When tenants demand that percentage be lowered, and they will at some future time, landlords will have no moral defense. As Ayn Rand noted,
the partial victory of an unjust claim, encourages the claimant to try further; the partial defeat of a just claim, discourages and paralyzes the victim.
Landlords gave tenants a partial victory for an unjust claim. Landlords have compromised, and compromise is surrender.
The essence of the landlords’ objection to the 2020 ordinance is that it “went too far.” They didn’t object to the direction the ordinance was taking them, just that it was too draconian. That is the moral equivalent of telling a burglar that you will help him load your property into his van if he agrees that he won’t take “too much.” The burglar has no moral right to your property. Neither tenants nor city officials have a moral right to take property from landlords.
Landlords have compromised their right to property.
A compromise is an adjustment of conflicting claims by mutual concessions. This means that both parties to a compromise have some valid claim and some value to offer each other. And this means that both parties agree upon some fundamental principle which serves as a base for their deal.
Tenants and city officials offered no value to landlords. All that was offered to property owners was the threat of more drastic controls and restrictions.
Last October, I wrote,
When landlords accept the legitimacy of council controlling and restricting their businesses, then the only issue up for debate is the extent and the type of controls and restrictions.
Landlords have accepted controls and restrictions. When future disputes arise between landlords and tenants, and they will, it won’t go well for the landlords. Compromise is surrender.