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THE CRC: FALLACY OF CANCELING RENT

THE CRC


One person’s expense could contribute to the incomes of a multitude of others. In our complex and dynamic economy, one must understand the impact one policy has across multitudes of sectors and groups.

Besides discomforts, many people feel negative impacts from social distancing required by the Covid-19 pandemic. Not everyone is fortunate to continue to collect income while not physically on the job.

Understandably, there are those advocating to help those people, but not doing so in the most well thought out manner. Shifting the impact to others from one group to another is rarely good public policy.

Of course, the topic at hand is the Cancel the Rent movement, which many radical left politicians are attaching themselves too. A movement aimed to reducing the largest cost a person typically pays in a month.

In a bubble, one can understand the call for such compassion. Many lost income and cannot afford the rent through no fault of their own. Not only small business owners, but many personal tenants as well.

Looking at the big picture, the canceling of rent simply spreads the income loss to greater people. While understandably flexibility is needed, the idea to cancel the rent is not sound public policy.

Without rent, how can property owners pay the underlying taxes due to local, state, and federal revenue services? That will not be cancelled. The cost of property maintenance is now unfunded as well.

Canceling rents will also prevent property owners to find additional funds by borrowing against a potential assets, even if it may not be fully attainable. Exacerbating a problem.

Property owners need to flexible with those people facing hard times due to truly no fault of their own. Policymakers may need to consider ways to provide rent relief in future rounds of stimulus.

It is easy to assume that every property owner and landlord is a wealthy person able to afford to miss a few payments. That is not always the case. Look at the complete picture and how the dominoes could fall.