What do luggage carts have to do with real estate? Glad you asked.
If you can understand politics and economics, you can understand much of what happens in the world. A common sentiment in New York politics is that people should get things for less than they cost, or even free. This explains rent stabilization, at least since 2019.
But today’s example is the humble airport luggage cart.
Tim Wu, the semi-famous Columbia professor (of law, not economics), tweeted that a $6 fee for carts at Kennedy Airport “just feels extractive” to a family with a lot of luggage.
“Nothing says ‘welcome to the land of the price gouge’ like the JFK $6 fee for the luggage carts that are free in the rest of the civilized world,” he wrote.
First of all, America is not “the land of the price gouge.” Lots of things — gas, gadgets, groceries, blue jeans — are cheaper here than in other developed countries.
Second, the $6 fee for luggage carts makes perfect sense. It ensures that people who truly value carts will be able to get them and are the only ones paying for them.
A basic rule of economics is that the less something costs, the more it will be used. If carts were free or underpriced, more travelers would grab one. That would lead to a shortage, as it has for rent-stabilized apartments.
A cart shortage would be a problem for people who overpacked or failed to buy luggage with wheels. They would rather pay $6 than struggle to find a cart.
The Port Authority of New York and New Jersey, which runs the airports, might respond to a shortage by adding carts. This would result in induced demand, just like widening a highway draws more vehicles to it. You end up with more congestion, be it vehicles on the interstate or luggage carts at baggage claim.
The extra carts would also add cost. Lots of “free” luggage carts would not really be free.
Jay Martin of the New York Apartment Association likes to say, “Someone has to pay for the housing.” The same is true for luggage carts.
The Port Authority, like landlords, is self-funded, not subsidized. If it bought more carts, or paid a vendor to supply “free” carts, it would pass the cost on to all airport travelers — even those who don’t use carts — in the form of ticket fees.
Besides, a $6 fee for a useful item isn’t “extractive.” What is? Forcing travelers to pay for carts that they don’t use.
If the government subsidizes something for a select group of people, that thing should benefit society on the whole. Affordable housing does. Luggage carts, not so much.
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