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The Responsibility of Government

Readers of my works know I lean libertarian and believe deeply in the value of the free market (not just the financial but in every manner of life).  So, it is always a bit challenging for me to acknowledge that there is a role for government beyond the original and limited role laid out in our Constitution.  The basic notion of government, of needing to have a group of people dictate terms to the masses, implies many things that I am basically uncomfortable with including the notion that people left to their own design without any rules or oversight would screw it up pretty badly and learn very little from the experience.  The basic premises upon which my libertarian leanings stem from include a belief that people left to their own devices, along with the influence of the discipline imposed by others, would self-govern pretty well and that whatever poor outcomes that might arise from such freedom would be worthwhile as lessons would be learned and society would advance.  Recently, however, I have come across certain instances that have caused to me moderate my sentiments a bit.

Last month I was on a site inspection of an apartment building that is for sale in Manhattan.  The building was built in the early 20th century for lower and middle class family dwellings, and has had very little work done to it since.  Now, as is the case with most of the island of Manhattan, the building is in a very valuable location.  In the interest of squeezing out every possible bit of value, the landlord has divided each of the original units, which decades ago were large enough to comfortably house families with children, into three tiny ones, with each resulting unit resembling more of a prison cell than a dwelling.  Shockingly to me, when I visited the building the landlord was in the process of further shrinking the units by eliminating living rooms from the one and two bedroom units and adding additional bedrooms to squeeze even more rent-payers in, thus further diminishing the quality of life potential for inhabitants.  When the property ultimately sells this summer at the massive prices for which Manhattan real estate now fetches, the new buyer, by virtue of the price he must pay to win this asset, will be forced to add still more bedrooms to each unit, AND to increase the rental rate substantially to earn even a meager return and justify his purchase price.

After about 20 minutes, and having seen only three units, I walked out of the property in disgust.  At the time I couldn’t put my finger on the source of my feelings but my friend who was with me asked me as we walked away what was bothering me.  He could tell I was disturbed by what I saw.  I thought about it, and replied that I felt so sad for the residents of the building, and for most all New Yorkers.  I grew up in New York in a lower-middle class apartment community and enjoyed many, many wonderful years there, both in childhood and later as an adult.  In the past 15 years, however, the pricing of residential real estate has skyrocketed, and has severely undermined the quality of life for its residents.  At first, the massive increases were confined to the highest of the high end, but in recent years it has permeated neighborhoods that until recently were considered blue collar if not slightly edgy/dangerous.  $2,000+ per square foot for nothing-special condominiums in OK-but-not-great areas of Manhattan is now the norm, and rents per foot of $80-100 is also typical of such areas.  Vacancies are unheard of, so landlords have little incentive to spend any new money to add anything to the poor quality of life that Manhattan residents are relegated to experiencing.

As I reflected upon this situation and my feelings I began to realize that, despite my free market leanings, I believe that there is an important role for government in city planning.  Governments ought to be preoccupied primarily with insuring that citizens have a good quality of life.  Accomplishing this involves numerous things, including having something to say about living conditions and affordability.

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