Man Without Qualities

Thursday, September 15, 2005

Louisiana Democratic Party: Swept Away (By an Unusual Destiny in the Blue Sea of August) II

A prior post noted that the former residents of New Orleans now evacuated, many to Houston, are probably essential for Louisiana Democrats to remain in office - regardless of whether they are able to convince Louisiana or the nation as the whole that the federal administration was lax in its storm response. I suggested in that post that the prospect of losing their political base might be one explanation of the remarkably emotional state of some senior Democrats in Louisiana, including the state's Democratic Senator. It doesn't look like Louisiana Democrats will be calming down any time soon if this Washington Post report holds up:
Fewer than half of all New Orleans evacuees living in emergency shelters here said they will move back home, while two-thirds of those who want to relocate planned to settle permanently in the Houston area, according to a survey by The Washington Post, the Henry J. Kaiser Family Foundation and the Harvard School of Public Health. .... According to the poll, most of those who did not plan to go back to New Orleans are already living in their new hometown. Fully two in three of the 44 percent who will not return said they plan to permanently relocate in the Houston area, the city that now is home to about 125,000 New Orleans evacuees. A total of 680 randomly selected evacuees living temporarily in the Astrodome, Reliant Center and George R. Brown Convention Center, as well as five Red Cross shelters in the Houston area, were interviewed Sept. 10 to 12 for this Post-Kaiser-Harvard survey. More than 8,000 evacuees were living in these facilities and awaiting transfer to other housing when the interviewing was conducted. More than nine in 10 of these evacuees said they were residents of New Orleans, while the remainder said they were from the surrounding area or elsewhere in Louisiana.
There are interesting California precedents for what seems to be happening in Louisiana. In OpinionJournal's Political Diary John Fund noted that "A full seven months after the San Francisco earthquake in 1906, the city cast only slightly more than half as many votes for president as it had four years earlier." Mr. Fund does not say if that voting difference changed any elections. Don Luskin cogently analyses the San Francisco precedent.

There is a more recent Southern California precedent that had clear election consequences. Before the 1994 Southern California earthquake, the City of Santa Monica maintained a strict set of rent control laws - far stricter than those of neighboring Los Angeles. As happens in many cities maintaining strict rent control schemes, one consequence of Santa Monica rent controls was a clear reluctance of that city's landlords to invest in their properties. The effects of that unwillingness could be observed visually simply by walking through some neighborhoods that spanned the Los Angeles/Santa Monica boundary: crummy on the Santa Monica side, not so bad on the Los Angeles side.

One aspect of the situation could not be observed so easily: earthquake retrofitting. Landlords in Santa Monica were, compared to those in Los Angeles, reluctant to invest in their properties to make them more resistant to earthquakes. Santa Monica did not sufficiently permit landlords to effectively "pass along" earthquake retrofitting costs to renters. But, probably more importantly, many Santa Monica landlords didn't want to preserve their structures. Landlords reasoned that given the Santa Monica laws, total destruction of one's apartment house in an earthquake was not necessarily a bad thing.

Such landlords were more correct than they understood. The 1994 earthquake destroyed much of Santa Monica, although without loss of life. In a city of about 85,000 total population, 100 buildings were condemned outright, including 3,100 apartment units, while far more suffered repairable damage. Rent controlled apartment houses were particularly badly hit. The effect of the rent control scheme was obvious and widely reported. In areas experiencing similar force and shock from the quake and having similar geological characteristics, apartment houses in Los Angeles in general fared far better than structures of similar age and style in Santa Monica. The difference was mostly to be found in the fact that Los Angeles landlords had upgraded their structures far more extensively and thoroughly than their Santa Monica counterparts - mostly as a result of differences in the rent control laws between the two cities.

As may now be happening in New Orleans, the former occupants of those destroyed Santa Monica apartments had to leave the city. Residents of rent controlled apartments were, in turn, the main backers of rent control and far-left Santa Monica elected officials generally. It took a few days before those officials realized that their core constituency would not be voting in the next municipal election, and that Santa Monica elected officials would probably soon be experiencing a big turnover. As an article appearing in Reason shortly after the earthquake described the situation at the time:
"The rent-controllers usually win elections by 3,000 to 4,000 votes," says [Apartment Association of Greater Los Angeles's spokesman Charles] Isham, "so they're really in trouble." Isham figures that 500 to 1,000 apartments will go unrepaired, a loss that significantly eats into rent-control advocates' slim margin of victory. Rich Seeley, a columnist for The Outlook, a Santa Monica newspaper, predicts the reverberations will continue at least through next fall's elections. In a February 1 column, he writes, "How eager will landlords be to help [Santa Monicans for Renters Rights] insure that tenants get to stay in the city?...How far can SMRR go to make nice with landlords before it starts alienating renters?"
There were some interesting desperate attempts by elected officials to preserve their positions. Pressure was placed by some of them on department of building and safety officers to allow people to return to unsafe apartments, a development that became quite a local scandal. In the end, however, a substantial fraction of the strongest supporters of rent control and the far-left left Santa Monica. The make-up of the Santa Monica city council and other elected bodies did change substantially in the next election, becoming more conservative. But even after the electoral changeover, the city council was and is still very liberal and Democratic compared to the country as a whole - as is Santa Monica itself. But compared to their predecessors, Santa Monica's post-earthquake elected officials are more reasonable, somewhat less intense and not as focused on rent control and far-left political grandstanding. For example, Santa Monica passed a law in 2003 restricting the distribution of food to homeless people in the city - an action which would not have have been taken by any pre-earthquake city council.

Santa Monica did not repeal its rent control laws. But some things had changed profoundly. In 1995 the Democrat-dominated California Legislature imposed vacancy decontrol statewide (taking effect in 1999). Santa Monica's elected officials did not protest that legislative action much, and certainly did not resort to the kind of intense opposition that their predecessors would have mounted. Vacancy decontrol allows landlords to raise rents when a tenant moves out. The California law not only allows landlords to raise rents for vacant apartments, but also bans controls on new dwellings and permanently exempts single-family homes and condominium from controls once tenants move out. The effect of the state legislation in Santa Monica has been profound - with 40% of rent controlled units reported affected almost immediately.

More recently, the elected Santa Monica Rent Control Board has become somewhat more "pro-landlord." For example, the Rent Control Board has passed a regulation allowing landlords to increase a tenant's rent if the apartment is not the tenant's primary residence - a regulation that has been challenged in litigation in which the rent control cutback has so far been upheld. The erosion of the left in Santa Monica begun by the 1994 earthquake population shifts, and erosion of support for rent control, may have acquired a self-sustaining momentum.

Don't be surprised if the political - and, ultimately, long term economic - effects of Hurricane Katrina on Louisiana are more profound than those of the 1994 earthquake on Santa Monica.

UPDATE: Holman Jenkins writes in Political Diary, in part:

[President Bush] spoke last night of tax breaks and business subsidies, reflecting a GOP attachment to "enterprise zones," which too often seem like one mistake trying to fix another, namely the policies that contributed to inner-city rot in the first place. Democrats will quibble with the rhetoric but they'll generally applaud this "placed-based" approach to relief, especially in Louisiana, where local partycrats are keen to rebuild an inner-city demographic that kept them in power. "Innovative and bold," gushed Sen. Mary Landrieu, the Louisiana Democrat, after the president's speech.

Such place-based aid, however, would be better restricted just to rebuilding the public assets that were destroyed. New Orleans and the rest of the gulf coast already have plenty of economic attractions -- oil, shipping, tourism, recreation -- to attract business, without distorting incentives and handouts. Worse, these elements bespeak an urge to use aid as a lever to make scattered residents return.

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