Undoubtedly the first of many seemingly paradoxical issues concerning the difficulty (ie the monied establishment of whom Rent Control would affect the most in a negative sense) to even implementing Rent Control (RC) and thus a refusal at the first hurdle.
This post is a reply to question that I had no time to answer at the end of a presentation on the basic background of the present housing model and why unregulated private purchase and rents are now completely market led under the finasialation of the mortgage debt market and the now commodified living space, we call home.
The question is an obvious first hurdle to even thinking about an introduction of private RC,
Slightly paraphrased question from my classmate Mark;
“How are you going to get an acceptance from small private landlords let alone institutions” ?
My answer which has come from several ideas that I have been working on for a few years that I recorded as an end goal based on a fantasy Beveridge 2.0 report, including the ‘five giants’ ( think the 5 elephants in the room) as of a consequence of a 21st century established neoliberal society, namely the UK.
Very broad, but the main point being how do you convince that the stick of RC will benefit the nervous middle (50-90 percentile) and suspicious asset wealthy (top 10%).
According to the behavioral economist Kahneman we all suffer a greater bias towards loss (known as ‘loss aversion’) than gain, namely, ie it plays on our minds. At first this seems a good thing, as being over cautious must be good, as common sense would say that being attuned on a financial decision is wise, but alas this can in some circumstance lead to poor judgment, as shown in the gambler chasing the initial debt, whilst being blind to the option of just accepting a loss and walking away (Kahneman 2011). An AI algorithm would of course weigh up the odds and take the initial loss, if the odds stated were the best course of action to its overall long term gain.
Humans struggle with this due the emotion of the initial loss, we all do it as a fast thinking reaction.
So with this in mind to counter the loss we need a greater gain, thus in this report I figured four carrots to the one stick, this is so important to creating societal jewels (ie NHS) that can be justified to the majority over the small minority of our natural self seeking to a short term initial loss ( and we will see in the paper all benefit long term, again the NHS).
Though it should be stated that any welfare fiscal spending cannot show a direct profit by its very nature it’s once, twice, thrice removed and the measurement of GDP growth is only seen as a generation is cared and educated from birth to grave, kept healthy, has food, shelter, warmth and no fear of retirement so as to concentrate on producing the measurable wealth.
“Not all can be commodified for direct profit, but what can should be able to produce unhindered by welfare concerns. Thus, “No Apron Strings”
Yes, it’s a bit uptiopian, but so was male and female emancipation, free university, health and safety in the workplace, the 5 day week, paid holidays within PAYE etc.