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The Lockean Project

Rental ignorance

“Rental ignorance”, Carmel Pine Cone – Sept. 8, 2023

There are at least three problems with the proposed city of Monterey rental registry.

It will not produce one more rental unit, nor will it lower the cost of renting a home in the City of Monterey. Quite the opposite. It doesn’t take a graduate degree in economics to understand the concept of supply and demand. With onerous government regulation, investors will simply take their money elsewhere. A rental registry will decrease the availability of rental units on the market and increase rents.

The City of Monterey has failed to keep up with demand. The demand is great, in part, because of the increase in student population. Students at higher education institutions occupy more inventory every year, Monterey failed to add new units during the fifth housing element cycle, the city allocated 650 units in eight years, with only 139 units approved. Of those, only 29 got permits and, of those, 21 were ADUs.

There is no lockbox on the taxes to be imposed by this ordinance. On the face of it, it appears to be a “money grab.” The actual estimate to run such a scheme will be more like $700,000 a year. Where will the money go? Who really knows? When it comes to government, money is fungible.

As one Monterey City Council member said publicly on April 18, “I am not an economist. I don’t really understand this.” Passing a rental registry ordinance confirms his ignorance.

Rosemarie Barnard, Prunedale