“Capitalists Keep Housing Scarce So They Can Rake in More Profits”

I cannot recall the source, but I remember seeing an Instagram video which claimed that the many abandoned housing units in New York is a result of landlords and investors trying to keep housing scarce so they can increase their profits. The shortage of housing probably has less to do with capitalist greed than it does with government regulation. Thomas Sowell argues that one reason you see so many abandoned dwelling units in places like New York City is because of their rent control laws. New York City has had rent control laws for longer than any other big city in the United States and it is littered with abandoned dwelling units. Instead of developers intentionally restricting the supply of housing (which does not make sense because why would they build the housing in the first place), Sowell writes that “…many buildings have been abandoned after their owners found it impossible to collect enough rent to cover the costs of services that they are required by law to provide” (p. 44). Sowell estimates that the number of empty dwellings in New York City greatly outnumber the thousands of homeless people live in the streets; which is purely a result of government regulation.

— Colin Braman

Reference

Thomas Sowell (2015). Basic Economics: A Common Sense Guide to the Economy (5th Ed.). Basic Books.