Free-Market Contagion
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Governor Spitzer is leaning against renewing the state’s anti-scalping law when it expires in June, the New York Post reported yesterday. As the paper quotes the governor: “The reason the laws don’t work is it’s the only product I know where we are regulating the secondary market but we don’t set a price for the primary market. It makes no sense.” Well, it’s terrific to see Mr. Spitzer side with those who wish to buy World Series tickets or admission to a rock concert or a hot Broadway play or tennis match without standing in line or standing at the phone hitting the redial key over and over again. An expansion of the free market in New York to include tickets would be progress. Not least of the reasons for which is that free markets have a way of spreading.
While New Yorkers might spend a few hundred or, at most, a few thousand dollars on event tickets, many of us spend tens of thousands of dollars a year, or more, on housing. New York’s rent-stabilization and rent-control system, which includes nearly 1 million apartments, are an example of the same secondary-market regulation that Mr. Spitzer complains about when it comes to event tickets. The government, after all, doesn’t regulate the original sale price of an apartment building. But it does regulate what the owner of the apartment building can charge to resell the rights to occupy the building — that is, the rent.
Think of the apartment building as the ticket bought from the Yankees or Madison Square Garden, and the rent as the ticket bought from a reseller. The anti-scalping laws banning ticket brokers from reselling tickets for more than 145% of the face value are like the rent-stabilization laws banning landlords from raising rents more than the annual 3% or whatever increase is set by a government panel. Mr. Spitzer has so far shown no indication that he will take on this politically charged issue, though the laws governing rent regulation in New York City are made in Albany and the rent laws affect a far bigger part of the economy than ticket sales. If the governor relishes taking on entrenched special interests, rent-protected tenants are certainly one of them.
