By now virtually the entire world knows of the December 2, 2016 Oakland, Calif. Ghost Ship “rave” party fire, which killed 36 people.  My sympathies and prayers are particularly with the family members, friends, and other loved ones of those killed.  The presciently named “Ghost Ship” will, no doubt, live on in infamy.

Like many good ideas, live-work spaces are ripe for abuse.

The concept of live-work spaces came into vogue about 20 years ago in the San Francisco Bay Area, including my hometown of Oakland.  Before the live-work tenancy concept, rental spaces were either residential or commercial, the former subjecting landlords (in my staunch libertarian opinion) to draconian rent control rules and obliging landlords to provide a habitable premises even where the tenant himself, through intentional abuse or negligence, rendered the premises uninhabitable.  However, local rent control and landlord-tenant laws could not nullify the economic rules of supply and demand.  Thus, the unintended consequences of such rules, along with moratoriums on building, reaped housing shortages, dilapidated low-income housing, and the bizarre scenario whereby successful, well-to-do long-term tenants continue to enjoy 1980s-era rental rates.  I personally know three such professionals who enjoy residential rates at less than $1,000/mo.

With the live-work hybridization of commercial and residential tenancies, landlord-tenant rules were somewhat relaxed.  They also created a seemingly win-win situation for both landlords and aspiring artisans and craftsmen: a reasonably priced place for craftsmen to live, work, create, and market their wares, and income for the landlord’s property, which otherwise might not be marketable as a commercial space, much less as a residence.

Over the years, I’ve seen firsthand successful live-work arrangements.  One is a building contractor-landlord (and artist himself) who has built live-work spaces, one of which is near the now gutted Ghost Ship.  Another is a talented bicycle mechanic in Berkeley with a thriving business.

Enter Derick Ion Almena, the Ghost Ship captain who turned the concept of a live-work space on its collective ear.  Under the guise of a live-work “collective,” Mr. Almena’s only concern seemed to be to skirt the live-work concept in order to provide cheap digs for transients, drug addicts, partygoers, and orgy participants who were willing to sacrifice their own personal safety for low rents.  There’s no indication any of the now former tenants were creating or marketing anything, much less selling any of their wares to support themselves.  Mr. Almena himself seems to have supported his family from his rental revenues, not from any of his artistic renderings.

A former tenant’s account in the U.K. Daily Mail paints a horrendous picture of filth, squalor, orgies, backbiting tenants, and dilapidated and dangerous building conditions, all under Almena’s tyrannical rule.  Unfettered (or at least unimpaired) by landlord-tenant regulations, Almena could shut off utilities at will, and leave it up to tenants to create makeshift heating systems from (hap)hazardously plumbed propane tanks.  The fact that Almena had to rent out the facility for rave parties – and secrete himself and his family from the night’s debauchery – is proof positive that his “collective” was a failure.  All of this should come as no surprise to anyone who has had read any book on economics.  (I personally recommend Henry Hazlitt’s Economics in One Lesson for starters.)

Whether it was English “commons” pastureland, William Bradford’s pilgrim colony, the old Soviet Union’s command-and-control farming, or the now defunct communes of the late ’60s and early ’70s, commons (aka collectives) are consistent and abysmal failures.  As Almena has said himself, his concept was a collective; it was certainly not a true live-work scenario, whereby the craftsman reaps the benefit of his own labors.

There will be at least 36 wrongful death lawsuits, a lot of finger-pointing, and a desperate search by a host of plaintiff’s attorneys for a deep pocket or two.  Their quest may be in vain.

Historically, the tragedy of the commons created death by starvation, with Russia and China providing the most stark examples.  In the case of the Ghost Ship, the deathly consequences were by fire.  The blood of the partygoers is on Mr. Almena’s hands, as well as those tenant collectivists who eschewed safety in favor of cheap rents.