A Stitch in Haste

The New York Times has a piece about a group of people who seem to be confusing the concept of “co-op” with “kibbutz” –

Morningside Gardens is a rarity in real-estate-mad Manhattan, a co-op apartment complex that middle-class New Yorkers can afford. Apartments sell for a fraction of what they would bring on the open market. For the chance to live free of a crushing mortgage and in a community that is unusually mixed, residents accept a trade-off: they give up the possibility of making a killing when they sell.
…
The protracted fight over what is known as “going to market” has pitted neighbor against neighbor in this longtime left-leaning redoubt, said to have once been the only racially mixed middle-class co-op in the city. There have been charges of fear-mongering, profiteering, reverse snobbery and greed.

In other words, this co-op enforces an equivalent of rent stabilization. You can buy in cheap, but you can only sell out cheap.

Now I of course love co-ops and housing associations and other planned communities that reflect strictly voluntary arrangements among consenting parties. I’m not faulting Morningside Gardens for that.

My problem is instead with the pompous, arrogant hubris that drips from the defenders of the status quo:

“We built a community that is really a national resource in terms of the diversity of the people who live here — the intergenerational, interfaith, inter-everything,” [a resident] said. … “To honor the cooperative spirit, where you deny yourselves things for the betterment of the whole — that is a concept that we’re in danger of losing.”

Oh please. The co-op’s pricing rules are perfectly reasonable, but they are most definitely not “superior” or “enlightened” relative to traditional real estate arrangements.

And they are also certainly not more altruistic.

It’s very easy to say what a wonderful concept a low-price co-op is — when you already live in it. Ditto for rent regulation: it’s a great deal for the small fraction of would-be renters who get to partake of it. Or labor unions: great work if you can get it.

And screw everyone else:

A two-bedroom apartment can be had for as little as $114,000, but there are long waiting lists for all the apartments.

And the people who are lucky enough to score one of the scarce apartments dare call themselves altruists concerned with the “cooperative spirit” and “the betterment of the whole”? (Incidentally: is it really luck, or the subjective personal whims of the co-op board, that decides who gets these apartments as they become available?)

At least free-market capitalists like me have the intellectual honesty to admit that our economic decisions reflect our own self-interest and that when we get something that we want, it makes us happy precisely because we got something that we wanted. We don’t hide behind the cloak of false claims of selflessly trying to save the world.

One more thing:

[A] price rise is needed to generate enough revenue from the flip tax to cover … $10 million in upcoming capital improvements…

Gee, if people don’t really own a full, unrestricted interest in the property in which they live, then they will tend to let it deteriorate? Who could have seen that coming?

One more parting shot:

Mr. Van Tuyl, who opposes the increase, added, “With the stories that we hear, and the riches earned on real estate, who doesn’t wish they had a piece of that?”

Who indeed. At least he used the correct verb: “earned.” Unlike the taxpayer-appropriated (i.e., unearned) Title I monies used to build Morningside Gardens in the first place.

POST SCRIPT: For those unfamiliar with the parable.

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