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Fair-Housing Fascism

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In his recent book, Liberal Fascism, Jonah Goldberg argues that most of the liberal political agenda is fascistic, in the true meaning of the word. Fascism is a system based on the use of governmental directives to control private property. Whereas communists simply confiscate private property particularly what they call the means of production fascists let the owners keep title, but bring their property under increasing government domination through rules and regulations. Goldbergs indisputable argument is that the same thing is going on in the United States.

Liberals hate being called fascists because fascist is the epithet they often hurl at those who oppose their authoritarian ideas. Too bad. Lets be adults and call things by their proper names. Ever since the New Deal, much of U.S. law has been intended to take freedom away from property owners and, in pursuit of notions such as social justice, make them subject to numerous political and bureaucratic dictates. Goldberg is right. Its fascism.

One of the areas where this has occurred is in housing. Anyone who sells or rents housing has to obey a host of regulations, including so-called fair-housing statutes, which make it illegal to do anything that could be construed as discrimination. If a seller or lessor has any preferences with regard to buyers or tenants, he had better not act on them, or else face serious penalties.

I happen to be one of the members of the North Carolina Advisory Commission on Civil Rights, and recently the issue of fair-housing law enforcement came up. The commission was reviewing a report on the relative merits of enforcement by the federal governments Department of Housing and Urban Development (HUD) and local fair-housing agencies. To the astonishment of at least one other member of the commission, I said that I was philosophically opposed to fair-housing laws, but saw no harm in going ahead with the comparative analysis. That commission members astonishment manifested itself in an immediate reply by email in which he likened me to some of historys most unsavory characters. That was written prior to my explanation why I was opposed. Shoot first, ask questions later if at all.

So what is wrong with fair-housing legislation? Isnt it bad to deny a house or apartment to someone just because of his race or some other characteristic over which he may have no control? How can members of minority groups find decent housing and improve their lives if property owners are free to say, Your kind aint welcome and turn them away?

Like so many other fascist controls, this one is based on both bad philosophy and bad economics. Ill start with the philosophy.


Morality and freedom

Many of the worst injustices of history have stemmed from the proclivity of governments to treat some of their citizens differently than they treat others. In medieval times, the trouble was that a very small number of people (the nobility) had rights and privileges no one else had. In modern times, its mostly the opposite certain small groups are treated much worse than everyone else. In the United States, that meant that blacks and Indians were not accorded the same rights as other citizens.

The guiding star of the civil-rights movement going back to the 1920s was that the government should stop playing favorites and respect the equal rights of all. With that idea, I completely concur. All persons have the same set of rights revolving around the fundamental rights of life, liberty, and property. What it boils down to is that each person is entitled to live his life as he chooses, so long as he doesnt infringe on the equal rights of others. That is why the infamous Jim Crow laws were wrong. They coercively interfered with the rights of blacks and whites alike.

Consider the Louisiana law challenged in Plessy v. Ferguson. It required railroad companies to seat black customers only in segregated coaches. That was a violation of the rights of black citizens, who were denied the right to freely contract with another party for accommodations, and also a violation of the rights of railroad owners, who were deprived of freedom of contract regarding their property. Finally, it violated the rights of freedom of association of white customers who may have wanted to ride with blacks. This was fascism predating Mussolini by decades.

The element of race was incidental to the moral wrong. Some people were deprived of rights and treated differently by law. Its wrong to do that on the basis of race, but just as wrong for any other reason. Fair-housing laws suffer from the same defect as Jim Crow. Heres why.

Among the rights everyone has is the right to liberty of contract. Because a contract requires mutual consent, everyone has the right to seek to enter into a contract with another, but it also means that everyone has the right to either accept or reject contractual offers. It doesnt matter who the person is or what the contract might be about. Equality under the law means that everyone is free to make offers and either accept or reject offers made to him.

What this implies is that people are (or at least should be) free to act in accordance with their preferences. If you like a certain performers work, youre free to buy as much of it as you want. If you dont like a performers work, youre free to act on that preference and decline to buy any of it. You can, to use a demonized word, discriminate. You can do so with all sorts of products and services, and with people. A contrary rule would destroy the symmetry of the law, saying that some people are free to contract with regard to their preferences, but others are not.

Under fair-housing laws, prospective buyers and renters are perfectly free to act in accordance with their preferences. Those who are looking to buy or rent can and do discriminate. They usually look at many offerings on the market and reject most of them. Theyre free to decline to offer to contract, and whether their reasons might be regarded as good or bad doesnt matter in the slightest.

But under the law things are different for housing sellers. They are no longer free to act in accordance with their preferences. Theyre subject to punishment if they say no to a prospective buyer or renter for what the government deems a bad reason. Theyre allowed to discriminate on some grounds (thats too low an offering price), but not others (thats not the sort of person we want in our community).

Im not saying that all reasons for action or inaction are morally equal. I think its repugnant for a seller to say, for example, I wont rent to you because youre black and equally repugnant for a buyer to say, Lets not look in that area because its full of Jews. But freedom and legal equality demand that government respect the rights of all people to act peacefully. The law should no more be used to violate the rights of white housing sellers than to violate the rights of black buyers.


Economics and discrimination

As to the bad economics of fair housing, the case can be stated more simply. Few people in any market are willing to give up sales because of their personal preferences. Its costly to turn away business. Few sellers of anything prefer prejudice to profit. Therefore, we would not expect much discrimination in the housing or any other market. While it is not inconceivable that a person with money to buy or rent would be turned down because of his race, religion, or some other characteristic, it would be rare. If it happened once, it probably would not happen a second time. Discrimination by sellers is unusual, but if you run into it, the sensible thing to do is to try somewhere else. In all likelihood, youll find one of the great majority of sellers who just want to maximize profits and are glad to have your business.

And that brings us back to the report on fair-housing law enforcement. It included some data from a study done by HUD showing that while some 15 percent of people in the housing market thought they had been discriminated against (an amazingly high number that probably demonstrates only that you can get whatever answer you want if you word your questions the right way), fewer than 1 percent of those people ever filed a complaint. Why would that be? The obvious answer is that they quickly found housing elsewhere and had no interest in legalistic procedures to extract a pound of flesh from the seller who said no.

Some of my fellow commission members favor the lets teach them a lesson! approach. They spoke fondly of cases where they had separated an alleged housing discriminator from a lot of his money to make an example. Instead of using coercion against sellers who may discriminate, however, it would be far better if private people just helped people who are having trouble finding housing by putting them in contact with sellers who dont discriminate. That is the nonfascistic way to solve this supposed problem.

If the fair-housing laws were repealed, the only people whod be upset would be a small number of lawyers, bureaucrats, and activists who thrive on the creation of artificial legal conflict.

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    George C. Leef is the research director of the John W. Pope Center for Higher Education Policy in Raleigh, North Carolina. He was previously the president of Patrick Henry Associates, East Lansing, Michigan, an adjunct professor of law and economics, Northwood University, and a scholar with the Mackinac Center for Public Policy.