Five Reasons Ilhan Omar’s “Cancel Rent” Movement Would Be a Disaster for America
“There ain’t no such thing as a free lunch.” — Robert Heinlein
Conservatives are all about reality and liberals are all about Santa Claus. Nary a day passes when liberals don’t demand that something else is provided to them for “free.” After ignoring conservatives that pleaded with them not to lockdown the economy over the Coronavirus, liberals have noticed that the large numbers of people that lost their jobs because of the lockdowns are having trouble paying their rent. You don’t say. Their solution to the problem they created with the lockdowns is to simply do away with rent.
In many places, a moratorium has been placed on evictions, but there is also a push to simply get rid of rent altogether. Ilhan Omar has sponsored the Emergency Rent and Mortgage Cancellation Legislation which would cancel rent and could conceivably take someone’s property if they did try to collect the money they were owed. Her bill would offer to pay landlords for their lost rent, but with all sorts of onerous and expensive strings attached. Other liberals think people simply shouldn’t be able to charge rent at all and bills to that effect have been introduced in state legislatures across the country. Even Teen Vogue is pushing the idea.
So, why should people have to pay rent? If the government simply legislated rent away, what would be the problem with that?
1) It’s clearly unconstitutional: No matter how clearly something fails to meet Constitutional muster, there’s never a 100% guarantee that the Supreme Court will stick to the rules. That being said, the 5th Amendment contains something called the “Takings Clause” that specifically deals with this kind of situation. It reads, “nor shall private property be taken for public use, without just compensation.” What is the “just compensation” for say $1200 in rent? That would be $1200.
2) We can’t afford it: Currently, the US is 26 trillion dollars in debt and we may add another 4 trillion in debt by the end of this year, which shouldn’t be a shock with all the Coronavirus relief that’s being doled out combined with the dramatically reduced tax revenue caused by the tanking economy. The cost of paying everyone’s rent is so staggering I haven’t even seen anyone try to estimate it. No wonder. There are 128 million households in the US and the median rent is $1216. In other words, we’re probably talking about north of 100 billion dollars PER MONTH to pay everyone’s rent ON TOP OF our already out of control spending. We simply cannot afford this, which is why to make this work, they’d have to steal the use of the property.
3) It’s a slippery slope: Once you make housing a “right” because people need it, what else fits the bill? You need to eat, right? So, groceries. What about clothes? You can’t walk around naked. How about medical care? Are you going to tell people they get free clothes, free food, and free housing, but if they get sick, they have to pay for that? What Rand Paul once said about declaring medicine a right applies to all of these things, including free rent:
“With regard to the idea whether or not you have a right to healthcare you have to realize what that implies. I am a physician. You have a right to come to my house and conscript me. It means you believe in slavery. You are going to enslave not only me but the janitor at my hospital, the person who cleans my office, the assistants, the nurses. … You are basically saying you believe in slavery.”
4) It would create a whole new financial crisis: Cancelling rent doesn’t cancel the landlord’s expenses. Even if they own the place, they still need to pay property taxes and insurance. Also, things break on houses all the time. A roof wears out every 20 years. An HVAC system typically lasts 10. Things get out of date; there’s water damage and things need to be repainted. All of that costs money and even if parasitic renters living for free on someone else’s property could be forced out somehow, the landlords are still left with a property that used to be an income-producing asset that’s now a liability sitting empty. Of course, they could try to sell, but EVERYONE would be trying to sell in that situation, which would mean they’d take a bath on the price of their property. This would lead to an enormous number of bankruptcies, including plenty of middle-class Americans since “individual investors owned about three-quarters of rental properties and about half of all rental units in 2015.” The housing crisis caused by this policy would make the one we endured in 2008 look like a tea party.
5) It will lead to a shortage of rentable housing: So, after all the rent has been cancelled and no one has any reason to rent to anyone anymore, where do people live? It wouldn’t make any sense to build new housing with the idea of renting it out. We have already seen a pale imitation of this in places like New York and San Francisco where rent control has made it unprofitable to build new housing and has driven the cost of housing into the stratosphere. So, where would people live when no one has an incentive to rent out property anymore? Homeless tent cities? Government camps? Ten to a two-bedroom house? Ironically, “free rent” would mean that many Americans would no longer have a place to live.