King Rat (gkr) wrote,
King Rat
gkr

Eco 200: actual, legal, and moral property rights

(individual) A Santa Monica apartment owner decided to tear down his six-unit apartment building rather than operate under rent controls. The city refused him permission to tear down the building, however, claiming that its interest in preserving rental housing took precedence over his right to demolish his property. The California Supreme Court sustained Santa Monica's refusal to allow the demolition. Who owns the building? Sort out the actual, legal, and moral property rights in this case.

The landlord is the legal owners. The actual owner is a combination of the city of Santa Monica and the renters in the building, who have control of 99.9% of the economic choices. The landlord might be considered the actual owner for a small fraction of the property rights, as he retains the ability to set many policies for the building some of which may cut his marginal costs. And he could simply let his building remain empty after after tenants move out. So he has some actual property rights left in the building, though not many. The moral property rights in this case could be considered to be given to all three: landlord, tenants, and the city. That simply depends on the moral authority one looks to. The landlord ought to be able to set rents or prescribe the use of his property. The ciy ought to be able to preserve rental housing. And the renters ought to have stable rents. Depending on the authority one uses.

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