by Walter E. Block
Representative Alexandria Ocasio-Cortez (D-NY, 14th District) has called for nation-wide rent control. AOC’s plan is to not allow rent increases larger than 3% per year. This is somewhat surprising, given that she majored in economics at prestigious Boston University. I – along with virtually every other economics professor in the country — am always at great pains to present in my introductory to micro-economics courses the familiar supply and demand diagram. It demonstrates that rents below equilibrium levels create shortages. I suppose she missed that lecture. If so, she really should have obtained the class notes from someone else, and/or perused her introductory textbook.
Senator Bernie Sanders has, if anything, done her one better: he is calling for a national rent control policy. California Governor Gavin Newsom has signed into law a policy along similar lines: rent increases shall be limited to 5% annually, in addition to any inflationary increases; this is coupled with making it more difficult to evict tenants.