Bern Central

The lack of affordable housing is an ongoing subject of concern here in New York City, but truth be told, it is a global problem. And bern respectfully dares suggest to have not only an actual answer, but the sole solution that is the definitive key to affordability while encouraging increased housing stock.

To facilitate implementation of this theory into actual practice, it must be established as worthy. To get there, the ask is that everyone buy a copy, review same, play devil’s advocate, and see if you can find any flaw, significant or otherwise and announce your results. Once there is consensus of this concept on the merits, then academic validation and all that it yields will proceed organically.

Anyone wishing to support this process can be in touch with bernmeister by his direct email bernmeister@bernmeister.com. What would be particularly helpful is anyone who is aware of a think tank or philanthropic institution that is particularly focused on this subject and particularly the economic aspects of it, if they would be kind enough to coordinate an introduction so they can see if my work does check out, at least enough to be part of the solution, in advance of considering formal academic review.

Like bernmeister’s other opus, the M Monetary System (“MMS”) there is a common and unifying element with CR, which is his coined bromide “anytime someone pays too much or too little for something, an economic disutility is created”. This happens with capitalism because while the comparative best of all alternatives, it suffers from structural deficiencies which renders things inefficient; it’s subset, housing, has structural problems too which are exacerbated by, among other problems, the lack of legit market forces. This does not allow for capitalism’s most outstanding virtue, competition, to appear, and drive down prices.

There are usually 2 sides to a coin, and in the case of housing, there are arguably 3. On one hand the population is tired of overpaying rent. The phrase “I’m mad as hell and I’m not gonna take it anymore appropriately comes to mind.” Previous governments should have been more proactive here instead of kicking the can down the road, even if this was [and remains] difficult within the status quo. So as a result end users are demanding lower rents, regardless of economic rationale – which may or may not be sketchy in spots based on specific details as well as exactly what is in the eye of the beholder.

The natural flip side of that coin are landlords, who want every penny and are typically selfish with a sense of entitlement as to max profit. They ignore that they are not functioning in legit capitalism because there is no true market, for either rental or non-rental units. Hypocritically, they feel an entitlement to a laissez faire approach which is also recognized by most as destructive. Owners quickly forget that given there is inelastic demand with no substitution for their product, there is a parallel to that of owning a casino – correctly run the house should not lose money.

Also overlooked is that one classic economic mechanism aimed to establish some balance is the windfall profits tax, which is rarely visible. The result of this [along with other contributing factors] is dramatically increased rents, as there is a failure to appreciate housing as a safe investment which should be extensively regulated and provide a low return per item, but offer opportunity for high volume. Instead not enough rentals are regulated, and efforts are made to get around what is in the public interest. It has been forgotten that, contrary to a line of movie dialogue, ‘greed is NOT good’. Self interest to a certain extent, in a fair if not level playing field, sure.

But not unchecked, selfish avarice. And in this particular case, there is a third side. The people who have money have to ask if the molst powerful succeed and make Gotham [or anywhere else] too unpleasant for the locals by throwing their financial weight around, what pyrrhic victory is won if the creative and other backbone of New York City [or wherever] move out rather than be an effective slave class to landlords? With the result the quality of city life is greatly diminished!

Fortunately, my CR concept should resolve most if not all basic issues as to residential housing [commercial rentals are another story]. The one thing needed at this point is for everybody to do the homework, and see that most if not all academic dots do connect.

So, what can you expect if invest a couple of hours to see if bernmeister has reinvented the wheel?

While I support overtures by those who want more status quo rent regulation until my CR can succeed, it needs be noted that as to the status quo, because both regulated and non regulated approaches are flawed, but the regulated model, by establishing limits that slow rent increases, at least has the saving grace of checking inflation.

However, rather than consume time on the status quo and going over variations on what we know, permit me to suggest something different: Channeled Regulation (CR).

What it is: the apparently only correct theory which, by design and formal structure, arguably demonstrates how to introduce and maximize actual market forces* in a pro consumer construct which facilitates increased (rewarding maximum) housing development (to the extent land can physically support its construction) at fair, non-excessive rents (i.e., affordable housing). {* All current propaganda claiming non regulated rent is ‘market’ are false, because the elements of what establishes true market forces beyond a rudimentary level do not exist in the status quo.}

How it works: creates a cost plus model which guarantees minimal, reasonable profit to owners but in return obliges landlords to serve tenants’ interest to help reduce costs/eliminate overpay.

What is the premise: instead of unfettered landlord freedom to apply rent at owner discretion [not likely to serve altruistic ends], CR’s channels compartmentalize the elements in this equation, ensuring each is used correctly as directed, but also with a design to minimize cost to consumer.