Landlords Heading For the Hills

The Certainty of Ignorant Left Ideologues

For the Left (and sadly much of the professed Right) the State is the avatar of deity, if not the deity itself.  If the gummint does something or runs a programme it is axiomatic that State involvement will have a much better outcome than if private individuals or corporations were to do it.  This is a deeply ingrained belief.  It is religiously held.

There are a number of beliefs which buttress this religious mantra.  Firstly, State run and controlled businesses appear to be riskless.  The gummint can enforce the rules and regulations and trading conditions in favour of the State to ensure its success.  Moreover, the gummint is not constrained for money: it can always borrow, and when its credit worthiness runs out, it can then resort to printing money.  Venezuela is an apt contemporary example of this thought pattern running to its logical and practical conclusions.  Destitution and starvation.

Secondly, State run businesses are believed to be more pure or holy.  Private business is inherently immoral.  It allows--nay, requires--people to make profits  This amounts to trafficking in filthy lucre, since (by definition) profits represent gain at the expense of customers.  If the customer or user were charged a "fair" price the provider of the service would be just clearing costs, and no more.  That is what the State (purportedly) does when it goes into business--clears its costs and no more.  In reality, the State layers costs upon costs throughout the activity in question, glorying in waste and inefficiency.

In New Zealand we have an alleged housing crisis.  The new Labour Government has decided to crack down on what it believes are private individuals and businesses taking advantage of people wanting to buy houses.  The Gummint is going to exercise more control over the market so as to force landlords to accept lower profits.  Remember, profit is tantamount to theft.  It is inherently immoral in the Left's mindset.

This, from Eric Frykberg of RadioNZ:

 Many private landlords are bailing out of the rental market because they are worried about the new government's housing policies, say property experts.  The experts say landlords are being tempted to take their capital gain and run, before harsh new rules undermine the value of their investments.

The concerns have arisen as the government moves to implement dramatic reforms of the housing market.  The looming changes include:

* A capital gains tax on second homes, depending on the outcome of a special tax inquiry.

* The imposition of 'ring-fencing rules', which would reduce tax deductibility for rental houses, by ensuring losses cannot be set off against other income.

* An extension of the 'bright line test', under which anyone selling a rental home within five years would be deemed a trader and would therefore be taxed.

Property Investors Federation executive officer Andrew King said these planned changes were scaring off investors from the property market.  He said the personal hostility directed against landlords was another issue.

Hit the pause button for a moment.  Hostility!  Here the underlying animus of the Left for the private business sector is on display.  The  landlords are evil monsters, taking advantage of the less fortunate, making money off their suffering, etc.  This, dear friends, is Leftist Ideology 101-Marxist class warfare and all that.

"There's been a lot of animosity against rental property owners. There is a lot of misinformation about their tax situation, a lot of people think it is easy money when it is not.  There are also changes to the how the property can be managed, and there are a lot of increased costs.  A lot of people are thinking it is just not worth it and are looking at getting out."  Mr King said changes such as the ring-fencing rule and the bright line test did not apply to other businesses, and so were unfair.

Mike Coffey, the Wellington regional director for the Real Estate Institute, thought the new government's coming changes would put up barriers against new investors in the property market.  He said this would tilt the playing field in favour of large, well-established companies with deep pockets, and would do nothing to help the supply of rental properties.

Now comes the government response to the threat of driving landlords out of the property market:

The government has dismissed criticism of its policies as anecdotal.  It said its housing policies were aimed at overcoming accommodation shortages.

Denial.  The claims are "anecdotal"--which is an anodyne, dumb retort.  Since Frykberg's piece relied upon the testimony of folk involved in the rental property business, everything in it could be said to be anecdotal.  Imagine a court case being tossed out because the evidence of witnesses was rejected because it was "anecdotal"!  ("We object, your Honour.  That witness just related an anecdote about his experience.  Anecdotes are irrelevant.")  What a stupid response from the Government.

Then, secondly, the government defends its policy based upon its good intentions.  Its policy was "aimed at overcoming accommodation shortages".  Sadly, leftist ideology has the effect of inducing rampant myopia in the mind of politicians and bureaucrats.  Good intentions do not guarantee results.  In this case, intending to overcome accommodation shortages is taken as a given; accomplishing the intent is something else entirely.  Even children understand that. 

But not the prejudiced ignorant myopic Left. Somehow its intentions guarantee certain outcomes.  But that just happens to be an attribute of Deity--which suggests the fixations percolating in the brains of Leftist ideologues are a form of religious mania.