Rent Control: Bad Then, Bad Now

I can’t believe that my local state representative, whom I’ve met several times and who came and talked with one of my University Seminar classes, will be introducing a rent control law for mobile home parks in the next state legislative session. Technically, the law requires justification of rent increases, instead of an absolute price ceiling, but the impact is the same.

OK, econ students, read this article and predict the impact of a rent control law on the mobile home market if it passes. Understanding that mobile home residents are lower income and probably hard hit by the recession, and certainly deserving of our sympathy, is this the best way to help them?

Extra credit – what will be the impact on other markets (forms) of lower cost housing?

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Risk and Pensions

Ha.   you thought this was going to be about the doings downtown today.  Not quite, but everything is related somehow.

Can’t believe I missed this.  From the Detroit Free Press:  Risky bets cost Detroit pension funds $480 million.   and check out their side story: Where the Detroit pension funds went wrong. Note the picture they have there on the right.  Look familiar?  Their accounting..  a $97 million dollar investment in the casino here is now worth $100,000.   That would be called a high risk and illiquid asset.  Still wondering what specifically makes up our pension fund’s illiquid assets… and what return current (and past!) private equity investments have garnered in a final accounting.   Wonks can dream.

Does make you want to give 200 million working captial to people who make those decision. Doesn’t it.
We all know what one of the ‘bets’ the Detroit pension system made is right? Would be a sure thing casino in Downtown Pittsburgh.  That has turned out real well for them.  Not.  In fact, I really suspect that the bath (euphemistically the restructuring ) the Detoit pension system took on its investment here is why the debt rating of the casino here is considered a “selective default”.

Looks like they have a whole series on the problems the Detroit pension system has. The really really sad thing in all that is that the Detroit public pension system is in far far better financial shape than is the city of Pittsburgh’s pension fund. Really.. by far.  Also much more transparent if you believe that even.  That’s the thing that gets me about all the pension bruhaha here.  Folks on all sides debating over things that are mostly unknown to the public, and even to the folks who are supposed to know what is going on.

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