On June 15th it's possible that history will be made, or at least that a long-running real estate abuse will finally end. In the middle of the month, if no extension is enacted, New York's rent control laws will died.

You might recall that such "temporary" rules have been in effect for more than 60 years. It was in 1942 that the federal government passed the Emergency Price Control Act, legislation designed to curb price gouging during wartime. The emergency laws ended with the war, except for rent control in some areas. In 1946, after Hitler was dead and Japan was defeated, New York state passed its "Emergency Housing Rent Control Law" -- rules which still govern rents for some 1 million units in New York City.

Rent control is a form of legalized theft, the kind of legislation which reminds us that Woody Guthrie was right when he said some people will rob you with a gun -- and some with a pen. Little wonder that rent control is literally illegal in more than 30 states according to the Cato Institute.

As a society, when we determine that some group needs help we tax everyone to support the effort. Food stamps, for example, are funded with general tax revenues and not by grocery store owners. Shortfalls in Social Security, should they occur, would be funded with higher taxes, not just levies on nursing home operators.

To understand how rent control impacts the marketplace, imagine that the government -- using its full power as well as such wisdom as it may possess -- decides that the country needs car pricing control. Instead of everyone paying what a car might be worth, you would walk into an auto dealership and be presented with a government-mandated chart showing the price for each vehicle, accessory and option -- according to such factors as your income, household size, etc.

For instance, while a single buyer making $40,000 annually might pay $24,000 for a given model, with car cost control the head of a household who also earned $40,000 per year but had four children would pay $18,000 for the very same car. Government being government, there would also be separate prices for gnomes, Nobel laureates and those with certain blood types who buy on Tuesdays.

To enforce auto price controls the government naturally would establish the Internal Retailing Service (IRS-II) and write 1,200 mandatory forms that would need to be completed each year by auto dealers. The very existence of car pricing controls would create additional costs for both manufacturers and consumers -- and additional employment for bureaucrats.

You can quickly see that no matter how much an individual buyer earns or does not earn, the auto manufacturer has a specific cost per vehicle. At the same time, you can also see that while the government is managing prices, it is not limiting the automaker's costs for metal, plastic, fuel, glass, and everything else required to make a car, thus there is an income cap but nothing to limit expenses. This, in capsule form, is exactly what happens with rent control.

Those who support rent control argue that without rent limits the cost of rental housing would soar and many households would be hurt. What's not said is that rents are already soaring, in great measure because there is a shortage of rental units.

Why is there a shortage of rental units? Part of the reason is that rent control drives away investors. In effect, it's that old supply-and-demand thing -- if more units were built rents would be lower because the supply would increase. Those who favor rent control are creating the conditions they deplore.

This has to end. Most areas of the country have rejected rent control and that should be the case everywhere. For political reasons, it may be necessary to phase out rent control in jurisdictions such as New York over a period of time, say three years, providing that all units are permanently removed from the program at the end of this period.

One approach might be to end rent controls on a gradual basis over a period of thee years: In year 1, all units with rents of $1,500 a month or more enter the free market. In year two, the benchmark moves to $750, and in year three rent control ends for all units.

There's no question that some tenants will be hurt in this process. If the state then wants to establish a rent voucher program based on need and funded by all taxpayers, fair enough -- that's what we do with food stamps, welfare and other wealth transafer programs. But at some point mandated subsidies from individual property owners to individual tenants must end. With rent control finished, investors might then want to build more units and more units might lead to reduced rents for all tenants.

Rent control is nothing more than a government taking, something prohibited without compensation under the Fifth Amendment. We might conveniently wink at such notions during wartime when millions of military personnel are overseas and everyone makes sacrifices, but that isn't the case at this time and it hasn't been the case for more than 50 years.

Rent control today is unnecessary and counter-productive. New York has a chance to remove "temporary" legislation that's ready for retirement. The ultimate results will be more and better housing plus cheaper rents, goals everyone can understand.

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