In her epic novel, Atlas Shrugged, Ayn Rand dramatizes a world in which producers go on strike. Rand once commented that part of her motivation for writing the novel was so that it wouldn’t come true. Sadly, it is coming true and often in ways that few will notice.
In the novel, the government enacted a series of increasingly restrictive controls and regulations on businesses. Each new law was intended to remedy the problems created by previous laws. However, the new laws had the opposite effect, and the economic problems cascaded out of control. Government officials thought that producers would continue to produce even as the shackles on them grew ever tighter. When the producers reached their breaking point, they shrugged and quit producing.
In real life, governments across the nation have implemented increasingly stringent controls and regulations on housing producers. The pandemic accelerated that process, as millions struggled to pay their rent and the government rushed to aid tenants with an assortment of new laws that restrict housing producers. Many of the events over the past fifteen months mirror the plot of Atlas.
In early 2020, governments began ordering businesses to close. In the process, they created a new problem—millions lost their jobs and were unable to pay their mortgage or rent. To deal with that problem, governments enacted eviction moratoriums. That in turn, created another new problem—financial hardship for rental property owners. Adding to the already onerous shackles imposed on landlords, governments are enacting new laws to ban discrimination on the basis of “source of income” or criminal convictions. A growing number of jurisdictions are considering rent control to cap the rents that may be legally charged.
Government officials are acting on the premise that housing producers will continue to create housing even as the shackles grow ever tighter. They won’t, and they aren’t.
Like the producers in Atlas, many landlords are reaching their breaking point. They are shrugging and removing their rental properties from the market, exacerbating an already critical shortage of affordable housing. They refuse to continue producing housing when the government is making it increasingly difficult to do so.
Government officials love to loudly proclaim the great benefits that tenants will enjoy by restricting and controlling landlords. The folly of their schemes will become clear when they discover that the landlord shrugged.