Further & More

SLOT MARKET?

In our September issue, Paul Feldman proposed that the federal government sell off its two Washington, D.C.-area airports, National and Dulles International ("Free the D.C. 2"), because airports are best operated subject to the same market forces as any other valuable resource. Now comes word that a Transportation Department task force is reexamining the issue of passenger capacity and landing-slot allocation at National, including a proposal that the highly demanded slots be open to buying and selling among airlines. According to a report in Aviation Week, airlines are most concerned, with this proposal, about incumbents' rights and whether such a plan at National would set a precedent for other airports.

Meanwhile, the question of slot allocation is also arising at LaGuardia Airport in New York. The New York Port Authority has suggested that some high-demand slots be allocated at semiannual auctions. Port Authority official Robert Aaronson told Aviation Week that the plan would "provide a financial incentive for carriers to operate at off-peak hours" when the prices for slot use would be lower.

At this writing, no firm decision has been made regarding either airport. But the idea of market pricing for landing slots is a step toward realizing that airports can operate in the market.

KIBOSH ON CONTRACTING

Private companies provide fire protection and security services at more than 30 US defense installations. But in late July Congress extended until 1985 a one-year-old moratorium on new contracts.

According to the Washington Post, the sponsor of the anticontracting moratorium in the House, Rep. Earl Hutto (D–Fla.), objected that fire fighting and security are too important to turn over to private firms. But the real issue seems to be federal employees' jobs. Federal workers' unions strongly supported the measure. (And earlier in the year the union successfully lobbied the Office of Management and Budget to withdraw for further work proposed revisions to Circular A-76 making it easier for federal agencies to contract out.)

The moratorium was greeted with dismay by the US Chamber of Commerce. "What [members of Congress] have done is substitute their judgment for the judgment of our military leaders in regard to base security," said a Chamber spokesman. "They have ignored the expressed wishes of the Department of Defense and ignored the opportunity to save major amounts of money for the taxpayers at a time when budget deficits and defense spending are a major concern."

Meanwhile, in August OMB issued final revisions to Circular A-76. In spite of earlier union opposition, the revised document on federal contracting makes it easier for agencies to turn over jobs to the private sector.

RENT CONTROL'S CONTINUING SAGA

"Relaxing [rent] controls would not result in the expansion of the supply of affordable rental housing. This kind of investment will never come from the private sector." So intoned William P. Rowen, head of the New York State Tenant and Neighborhood Coalition, in a letter to the New York Times.

Ironically, in the previous day's Wall Street Journal there had appeared an article entitled "A Glut of Rental Units Grips Parts of Sun Belt, May Spread Elsewhere," with the subhead, "New York Scarcity Remains." Journal correspondent Mark Zieman reported "vacancy rates ranging from 10% to 30% and more pounding the region in a crescent from Phoenix to Atlanta, sprouting widespread rent cuts and other giveaways."

It seems that the private sector, responding to new tax breaks and a surplus of money at lending institutions, has created a glut that in the classic fashion of economic theory is forcing prices down. And voilà!—"affordable rental housing." Of course, builders and investors don't like such a glut one bit. But they note, reported Zieman, that "rent control has saved some areas from overbuilding by decreasing construction."

A more unwitting statement of the consumers' case against rent control could hardly be imagined. "Saved"…from "overbuilding." Tenacious rent-control advocates ought to consider that one real carefully.