Friday, December 2, 2011

EWOT Goggles #13


Images taken from gonorthwest.com

In regards to yesterday's lesson on rent controls, I immediately thought of the Fremont neighborhood in my hometown of Seattle. Washington State doesn't have price ceiling rules for rental properties, though it does have renter unions. This allows for more or less of a free market for apartments and condos throughout the state. Fremont used to be a hippy, bohemian neighborhood with living spaces that were pretty far from luxurious. It was filled with hole-in-the-wall restaurants and second-hand clothing stores. About fifteen years ago, a collection of more highly paid demanders decided that the area was "chic". Not only did the quantity demanded of spaces for rent increase, but so did the demand for higher quality apartments and condos. As a result, the hippy artist renters were driven out of the Fremont housing market because of the new higher earning, higher bidding demanders. The businesses in and around the Fremont living spaces assimilated with the new crowd of renters. Chain and upscale restaurants replaced the diners, and the second-hand stores were traded for chic boutiques. The market behaved in the way it normally should because rent controls weren't present. If they were, Fremont might not have evolved in the way it did. The quality of the apartments would have suffered because of a fixed rent landlords could charge, and Fremont would not have been as trendy as it is today.

1 comment:

  1. Another great EWOT posting. Though we see in many areas rent control and other regulations to preserve the old way of life and keep those diners and hole-in-the-wall shops. I could play devil's advocate and argue that's a good thing, but in reality it's likely a bad thing to spend so much public money to preserve those areas in their "natural" state, in almost any way you make the argument.

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