[FOUNTAIN]When good intentions meet realityThe U.S. actress Mia Farrow is famous for having lived in a rent-controlled New York City apartment, paying a fraction of what she would have paid in an open market. In the 1990s, Ms. Farrow lived in a 10-room apartment on Central Park West for roughly the rent typically charged for a one-bedroom apartment. Because of rent control, the landlord could neither raise the rent nor evict her. The original intent of the rent control law was to help low-income households, but once a lease is signed, anyone could benefit from the law. And so this famous film actress was one of the New Yorkers who enjoyed artificially low rent.
Rent control was well-intentioned, but the results were disastrous. Because landlords could not charge tenants enough, the number of rental apartments dropped, and it became harder for an average New Yorker to find an apartment. The decrease in supply translated into soaring rents. Rent control is partially blamed for turning some New York neighborhoods into slums. One economist called rent control the second-best way to destroy a city, after bombing.
A few days ago, I received a letter from the head of my daughter’s English school announcing a 20-percent tuition cut as of Dec. 1. The reason was not a decline in the number of students, but the fact that the government was strongly urging private schools to lower tuition. The government is taking many different actions to ease citizens’ burdens from the economic slump, and this is one of them. In the name of helping the people, the government is meddling in private education in Gangnam.
Assuming that the quality of education remains the same, there is no better news for parents than a tuition cut. But my hope was shattered as I read the rest of the letter. The head of the school asked parents to understand that he’d had to reduce the number of instructors and increase the number of students in each class.
The real estate and education markets are easy targets for government control because of the limited resources and public sentiment. But the example of New York rent control illustrates the side effects of imprudently asserting control. Following the standardization of public schools, controls on private schools’ tuition could lead to the standardization of private education too. We need to carefully consider who would suffer from this.
by Lee Se-jung
The writer is an editorial writer for the JoongAng Ilbo.