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Econ for MPs: Why Policy Literacy Matters for Markets
William Watson argues that MPs need basic economics to avoid policy mistakes like rent control, which historically distort housing markets and hurt investors.
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A column by William Watson argues that basic economic training for new members of Parliament could prevent the kind of policy mistakes that distort markets. The piece, published in the National Post, uses New York's renewed push for rent control as a case study.
Watson notes that rent control, championed by the city's new socialist mayor, creates perverse incentives. Renters stop moving to keep below-market rents, units become scarce, and landlords cut maintenance to control costs. New York's first experience with rent control, beginning in the 1940s, left many older tenants – some with high incomes – living in the same apartments for decades.