Silver's Wrong On Rent
New York’s rent laws expire in June. In pushing to “renew and strengthen” them, Democratic lawmakers are seizing the opportunity to show they care about tenants. Gov. Cuomo, too, has an opportunity: to treat the city’s citizens as adults.
New York state and city have controlled apartment rents for nearly a century. After World War I, New York had a housing shortage, with returning veterans and labor organizers held “mass meetings” to protest “rent profiteers.” They convinced Mayor John Hylan that “the law of supply and demand should not apply so far as the renting situation [is] concerned,” as the Times put it. Hylan capped rents.
Thanks to Gov. Al Smith, the city took a break from regulation during the Depression (when deflation meant that rents were falling anyway). But it came back during World War II and never really went away. Today, the city, under state law, determines annual rent increases for half of Gotham’s 2 million rentals, but the law isn’t permanent: It expires every few years. (Other apartments escape regulation largely because they are in buildings too small or too new to be regulated.)
Under current law, rent regulation will go away, eventually. Since the Pataki era, landlords have been able to pull vacant apartments off the regulated rolls once the rents reach $2,000 monthly. It will take a long time, but through inflation, the rents on all regulated apartments will reach $2,000.
On Monday, Speaker Shelly Silver’s state Assembly, with Housing Committee chief Vito Lopez at his side, fired the first shot of the latest rent wars. The Assembly passed a bill that would end landlords’ ability to pull vacant apartments off the regulated rolls once the rent reaches $2,000 monthly. Silver’s fix would be retroactive to 2007, retrieving “lost” apartments.
The bill would also roll back another Pataki-era change: Today, landlords can deregulate occupied apartments when the rent hits $2,000 if the occupants earn more than $175,000 collectively. Silver would hike those thresholds to $3,000 a month and $300,000 annually.
Silver’s proposed fixes, though, expose rent control for what it is — not tenant “protection,” but political racket.
Consider what Lopez had to say: “This legislation will help stabilize our working-class neighborhoods.” Well, no. Nearly a quarter of rent-regulated households earn more than $70,000 a year, showing how random a process it is.
Moreover, because rent regulation holds down apartment supply, lots of other poor people have to pay more. As of 2008, non-regulated tenants paid more of their income in rent — 31.9%, compared to 31.7% for stabilized tenants. Plus, their rents are higher — $1,200 a month on average, compared to $925 for regulated rents.
Silver stayed away from the poor, focusing on the middle class. “This legislation will help keep middle-class families from being priced out of their homes,” he promised. Does Silver seriously think that people earning $300,000 desperately need the state’s protection? Does he think that people with the resources to pay $2,500 or $2,800 for an apartment need the might of the state’s resources?
There’s no reason why middle-class people in the city should get special “protection” from, well, life. Everyone wants to live near a nice city, and in a nice place — that’s why prices go up.
Indeed, the city’s middle class seems to understand this, despite Silver and the best efforts of housing “advocates.” When I first wrote on this topic a month ago, I braced for negative comments when real-estate website Curbed tagged my piece. Instead, out of 14 relevant comments, only three favored rent regulations. “Anyone that is capable of basic reason can figure out supply and demand,” one commenter wrote. “These laws continue because of pandering, plain and simple.” Wrote another: “If you go to [The] Bronx or Brooklyn you will find a 2 bedroom renovated apt under $1300/month. Why does everybody have to live in Manhattan?”
Social activist Mary Jones said her job was to comfort the afflicted and afflict the comfortable. Silver is doing exactly the opposite — keeping those lucky enough to be comfortably cocooned in a cheap apartment happy, while making rent difficult for the rest of us.
This piece originally appeared in New York Post
This piece originally appeared in New York Post