The next big exercise in government “beneficence” has arrived and, apparently, in full measure nationwide:
Scores of local and state governments around the country, Pittsburgh included, are ramping up plans to spend millions, if not tens of millions, of taxpayer dollars to convert business district office buildings into apartments.
Gee, what could wrong, right?
The latest big American city to fling taxpayers into The Great Abyss of the Great Government Intervention to End All Government Interventions is Chicago.
As The Wall Street Journal reports it:
“City officials said … they would provide tens of millions of dollars in subsidies to revitalize the LaSalle Street corridor whose landmark office buildings made up the thriving center of Chicago business for decades.
“Since the pandemic, though, the strip’s mostly vacant streets and towers have come to symbolize the slow pace that employees have been returning to office building,” The Journal notes.
The initial goal of the program is to create 1,000 apartment units. And at least one-third of them must be “affordable housing.”
Of course, “affordable housing” typically is anything but – the preponderance of scholarly research shows that such efforts typically lead to fewer units being developed and that the prices of those outside the “affordable” cohort must be raised to cover the cost.
Or, in this case and others around the country, publicly subsidizing a government intervention that has little to no chance of “success” and seeks to cover up the lie of the intervention with the market-perverting intervention of subsidies.
Some “deal,” eh?
Yet, Chicago Mayor Lori Lightfoot said that only projects that meet the city’s affordable-housing goals will qualify for public subsidies.
Talk about guaranteeing failure. Perhaps she should concentrate more on tackling The Windy City’s horrid violence or stop figuring out how she can lob $1 billion-plus to upgrade Soldier Field to keep the NFL’s Bears in town.
But, “This is not a story of corporate welfare,” says Chicago Deputy Mayor Samir Mayekar.
No, it’s demonstrably worse:
Central planners who know full well their plans won’t work are socializing that assured failure by greasing the palms of developers with public money.
Talk about the new balderdashery.
It is, by another phrase, a cluster cluck.
Even sans the “affordable housing” canard, the public has absolutely no business having its pockets turned out for such office-to-residence conversions.
If there’s a market for such conversions, so be it. But the fact that government, from the get-go, has to juice that corrupted free marketplace with public money to fund a central plan should tell you all you need to know.
Similar efforts are sweeping California and New York City. And it’s right up there with new and renewed calls for rent control.
City after city that has attempted to cap rents have learned the hard way that it is, as one analyst put it, referring to exposed rent control failures in St. Paul, Minn., “among the dumbest policies known to man.”
As George Mason University economist Don Boudreaux reminds, “short of an actual shooting war, [it is] one of the most destructive.”
“Rent control certainly does, as it’s doing now in St. Paul, dampen builders’ enticements to construct new housing. But this policy also reduces landlords’ incentives and abilities to maintain existing housing units. The quantity of housing shrinks as its quality deteriorates.”
Or as Boudreaux references the late, great economist Walter Williams, “(S)hort of aerial saturation bombing, rent control might be one of the most effective means of destroying a city.”
Consider the growing move to publicly subsidize the conversion of office towers into residences, en masse, and with a mandatory “affordable housing” component, no less than a carpet bombing.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
