On Thursday, the New York Post reported on the Hamptons’s most-expensive rental ever after a textile tycoon ponied up $2 million to rent a sprawling 11-bedroom mansion to hide out in through Labor Day. Yet, supposed champion of the working class Rep. Ilhan Omar apparently thinks the CEO and his family should get to quarantine in luxury for free.
The Minnesota congresswoman and self-avowed “democratic socialist” has put forward a radical proposal intended to address the economic fallout from the coronavirus: cancel rents. Yes, seriously. Just cancel them! What could go wrong?
We need to cancel rent until this crisis is over.
— Rep. Ilhan Omar (@Ilhan) April 8, 2020
Suffice it to say, this is an awful idea. While Omar has a point that we need to do something to help homeowners and renters who have lost their incomes or are struggling to pay their rent due to the coronavirus, canceling all rents would have massive negative economic ripple effects, bail out hundreds of millions who don’t need it, and hurt landlords, many of whom are average folks or senior citizens, not members of the ever-reviled 1%.
First, a very basic rule of economics is that everyone’s expenditure is another’s income. By eliminating rent payments, assuming the federal government has the authority to do so, which is by no means a safe assumption, Congress would also be eliminating massive income streams for many people. This would, in turn, reduce their spending and only worsen the ongoing economic downturn.
So, too, rent payments don’t just go to landlords; they fund local governments, utility companies, insurance companies, and low-income property maintenance workers. Canceling rent means drying up this pipeline of economic activity.
Of course, when Omar suggests canceling rent, it is unclear whether she is proposing the government (aka taxpayers) pay all landlords what they are owed or that landlords just get stiffed. Either way, there’s something downright absurd about the notion of simply canceling rent.
Polling suggests that about 1 in 4 has lost either a job or substantial income due to the pandemic. This is a very serious number, and perhaps there is a role for the government in helping those 25% of workers meet their rent payments until this crisis abets. But what about that other 75%? It seems like a ridiculous and unnecessary overreaction to cancel rents for everyone when 3 in 4 people are in more or less the same financial situation as before.
Most importantly, though, Omar’s proposal would devastate landlords and property owners, many of whom are not exactly Bill Gates by any stretch.
It’s a myth that the Left’s boogeymen, “landlords,” are all evil, rich, greedy people or corporations. Many are everyday people with families. In fact, MarketWatch reports that “Individual investors — in other words, mom-and-pop landlords — [own] nearly half of all rental units nationwide.” These families rely on rental income to survive, and Omar’s proposal would likely devastate them.
They can only hope it never sees the light of day.
On a lighter note, many critics issued some hilarious tongue-in-cheek mockery of the congresswoman’s proposal:
Can we see if rent has any damning tweets? That usually works.
— Bridget Phetasy (@BridgetPhetasy) April 9, 2020
we need to cancel calories until this quarantine is over https://t.co/cJdILWnuLg
— Patricia (@IdealPatricia) April 9, 2020
True, these jokes are hilarious. So, it’s tempting to laugh off Omar’s radical plan as ridiculous, but it’s also gravely concerning.
The congresswoman’s extreme socialist ideas are on the rise in this country. If we don’t defeat them effectively in public debate and offer our own satisfactory alternatives, we might find ourselves living in Omar’s socialist fantasy land within our lifetimes.
