“When necessary, we will take aggressive legal action to remove negligent owners and property managers. And for buildings that have suffered chronic neglect, we will work to transfer ownership to responsible stewards,” said New York City mayor Zohran Mamdani, a democratic socialist, explaining how the city plans to seize private property and transfer it to “stewards that include community land trusts, non-profits, or even the tenants themselves.”
The good news is he will not be taking property from all landlords, only the ones he decides are bad. “Through our new citywide campaign, Fix the City, we will focus on the worst landlords in New York City.”
Mamdani does not seem troubled by the fact that his proposal appears to violate the Fifth Amendment, which states, “nor shall private property be taken for public use, without just compensation.”
Even before being elected, he announced that he would be seizing private property. As a candidate, Mamdani declared: “We will use every single tool at our disposal, including seizing buildings from slumlords, to ensure that each and every New Yorker is given what is their right, a safe place to call their home.”
Now, as mayor, he is moving to act on it. On May 27, Mamdani unveiled his 112-page “Block by Block” housing plan in Gowanus. The enforcement mechanism involves the city’s Department of Housing Preservation and Development will launch a “Fix the City” initiative to conduct roof-to-cellar inspections in targeted buildings and aggressively use the 7A Program, through which the city can initiate legal action to remove negligent owners and property managers from day-to-day management.
The plan also has Housing Preservation and Development collaborating with other agencies and borough district attorneys to pursue criminal charges against property owners.
What Mamdani is proposing is a textbook Austrian economics interventionism cascade. Austrian economics, the discipline in which the author of this article is educated, holds that rather than solving problems and making life better for citizens, government intervention generally exacerbates problems, making them worse, more widespread, and increasingly difficult to resolve. Each resulting distortion is used to justify the next intervention, which in turn causes the problem to get worse, necessitating more government intervention, making things worse…until all properties fall under state control.
The landlord crisis Mamdani claims to be solving was created by the very rent control policies his administration is now doubling down on.
The methodology for creating a crisis that allows the state to seize property begins with artificial rent controls such as freezes and rent ceilings. Below-market rates destroy the landlord’s incentive to maintain and invest in property. When rents fall below a certain level, the landlord may not even be able to afford repairs and maintenance.
The rational economic response for a landlord who is forced to rent at rates below operating costs is to defer maintenance. The building deteriorates. The landlord becomes, by definition, a “bad landlord,” not from malice but from economic necessity created by the policy itself.
The city then uses the deterioration it caused as the legal and moral pretext to seize or transfer the property. The government manufactured the problem and now presents itself as the solution.
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