Why Rent Control and Stabilization Is Bad For NYC

Alright, maybe I got my syntax wrong...that should have been titled: Why Rent Control and Stabilization ARE Bad for NYC. My mistake.

My fiance and I live up in Hudson Heights in Washington Heights. Not really a great building, but there are a bunch of really old tenants who are rent stabilized. We frankly will be getting out of here as soon as the lease is up, and I've seen a lot of people move in and out. The neighborhood has some good things to it and there are young people up here but the building isn't ideal. Anyway, the old people, they've been around forever, at least they add some stability to the building that we definitely appreciate and they definitely don't get in the way. One widower has lived there forever, very friendly and even one of the teachers in the building gets his newspaper from the lobby during the week and leaves it in front of his door and then on the weekend when he is awake at his normal time and she sleeps in, he brings the paper to her. Plus of course he's never not there throughout the year. If it were all people like me going in and out for 2 years and getting sick of it or moving to buy or leave the city, there would be less of a friendly long-term atmosphere. Maybe the landlords appreciate that too but I don't know how much he pays

Don't get me wrong, someone paying $200 a month for rent controlled apartment in the regular upper west side (or south of 125th) is definitely probably taking up something that could be market rate (if renovated) and might lower the prices for us, but everyone forgets that Manhattan goes above Harlem and I suspect everyone talking about rent control is really complaining about where is applies to the more "ideal" parts of Manhattan and not to Upstate New York City! or Bronx or Queens etc.

The real issue is that rent control and stabilization throw off all the dynamics of supply and demand. As a result, the supply is constricted, so all the apartments on the market are overpriced and the landlords don't have incentive to take care of their buildings because they earn less on them than it costs to own and maintain them.
I'm sure most people won't agree with me on this and I don't think it's right to throw out old ladies either but I think a gradual return to market dynamics would actually help this city.

I'll take the liberal "rent stabilization is good for the city" position -- (and, as a former Bostonian I can say losing it was bad for Boston) but it doesn't matter. New York City has been being slowly decontrolled over the twenty years I've lived here, and in many sections of the city -- especially the highly-desired Manhattan south of 96th -- that horse is already out of that barn.

ali r.
{downtown broker}

Luc - you say that landlords don't have an incentive to take care of the building because they --- earn less on them than in costs to own and maintain them ---

Two things, first Maintain - NO, there are VERY VERY few real examples where the cost of taxes, heat, common real charges are less than the rent. VERY VERY Few.
Then the cost to OWN them - first of all, since rent control happened many many many years ago (in a land far far, oh, actually not) the cost of ownership for anyone who owned the apartments at the time when things first became that way is not for a second more than the rent. What you have is people buying apartment buildings at big prices hoping for destabilization (or death) and their mortgages might be more than the tenant is paying because they are betting on long-term equity when they flip. (Anyone who says different isn't being truthful). So maybe a NEW buyer is losing money, but, just like the most sophisticated Tishman Speyer, they were making an investment gamble. Why people here are complaining for the benefit of Tishman Speyer or the many smaller co's with the same investment thesis is just really really baffl ling

rufus, if we didn't have rent stabilization, would we have more luxury hi-rises without poor people?

RC/RS isn't for poor people though. There is no means testing. And explain to me why an heir can inherit a rc/rs lease so the apartment is just passed down from one generation to the next as if the family owns it. Something isn't right about that. Carve out an exception for the elderly, handicapped, impoverished, and do away with the rest in one fell swoop. It is an unjustifiable government intrusion into the private sector that is a vestige of a housing situation from over 1/2 a century ago! It's just insane that it is even tolerated. It hurts the middle class, it hurts young people coming to NYC, it hurts diversity, it hurts families.

I'm with kylewest but I made my points in the other thread and am going to hang back in this one.

I also think the situation will never change and I have chosen my plan, to buy, based on the current system. If people want to drive up the price of apartments by artificially constraining the supply, then I think buying is a good option, if you've got the 25% down cash.

Rent Stablization does have a means test...if you earn $175k you're out..if the apartment rent goes to $2k, it goes to fair market value. Bottom line...I would be thrilled to get a rent stablized apartment. Kylewest's post is what has been wrong with Manhattan these past five years. The haves don't want the have nots to live in Mahatttan...push them to the bronx, or SI...You are so very wrong..Diversity is what makes Manhattan great, rich, poor middle class.

Look Julia, they're trying to raise the income level to $240k! Even $175k is a heck of a lot of money, and people who earn that do not deserve a break on rent.

I won't take a rent stabilized apartment because I want to flexibility to eventually sell an apartment, possibly make a profit, and move somewhere else. These rent stabilized places seem to lock people in place so that they won't move to take other jobs, if they lose their job. They become wedded to this apartment, for life.

Julia, not for the first time you completely miss the point of one of my posts. We agree that diversity is valuable! We agree the middle class should have a place to live in Manhattan. We agree that young people should have a way to live here along with families. My belief is that rent control/stabilization actually works to undermine these things. The rc/rs apartments largely fall into the hands of people who could afford market rate, are not young, families or especially diverse in any sense. They are just lucky to have fallen into these places. And since when is $175,000 a needy person?!!! You make my points.

There is such a programmed response from more liberal people to think rc/rs helps poor, elderly, handicapped and working families. But when the economics and details of the NYC system are studied, you see none of these groups (or diversity) is aided by the structure of our laws. I am actually socially quite liberal and find the rc/rs laws offensive for the very reason they do not help those the public has been brainwashed into thinking the system helps.

Like 407PAS, though, I believe it is highly unlikely anything will be done in Albany but worsen the system. And the city's voters will applaud Albany's ineptitude and misguided legislation without taking the time to learn what economists from the left, right and center all agree on: rc/rs is bad.

That's me, btw, above.

it's interesting how you start your post by attacking me...$175k before taxes for a family of four is not a lot of money...you post that you are socially liberal that's because you've said you're a gay man..that doesn't make you a liberal that makes you someone who has self-interest first. A true liberal would want all diverse people to live in manhattan, earn a living wage and live in affordable housing. You're obviously not from New York and have not interacted with people other than your own economic class. I've never felt anger before from these posts but you are the worst possible human being who has posted on streeteasy.

julia, don't worry, he's said that "economists from the left, right and center all agree"

Economists deal with utility, curves, supply and demand. An economists dream is a world occupied by computers. Economists don't deal with people, families, relationships, life changes, and things that really matter.

Like anything else RS/RC has it's good and bad and those who take advantage. As Ali has pointed out the teeth have been removed to a large extent. When a RS tenant moves a LL can raise the rent 23% + more increases for renovations. In buildings like 100 Jane street which is RS the legal "base rents" of the apartments far exceed what the market can bare. Example a 1 bedroom is listed at $3200 per month, you go to sign the lease it says $4675.89 because with the turnover the rent has risen well beyond the market. The landlord then adds on a "preferential rent rider" stating that although the legal rent is such they will charge you this.

I live in a rs apartment and I am glad to know what my rent will be year to year, we just moved in a year ago. I have lived in at least two others that were RS-never stopped me from moving.

These rent regulations help protect families and neighborhoods.Not everyone wants to buy or can afford to buy. So why should a couple who moved into an apartment on west 98th street in 1975 and raised a family, put down roots have to move to accommodate gentrification or a bubble? They should be forced to uproot their family, take a child out of school? There are government regulations that protect/subsidise every class of citizen or corporation(ask Citi), if you don't like it vote for Ron Paul or read what Chomsky thinks of your so called free markets? :)

Because theburkhardtgroup, an economist doesn't know how where in the equation love falls, or family, or a sick child, or what an eviction or foreclosure means to a family, or when loneliness kicks in to an eldery widow or widower, or how an abusive landlord can play a toll on good and bad tenants alike, or how neighborhood safety plays into people's lives, etc. etc. The anti-rent control and rent-stabilization arguments about the existing homes are typically by well to do, mobile people working in business and unable to distinguish business from home.

CM02...you've restored my faith in humanity...thank you

I'm having a hard time trying to figure out what CMO2 actually said that makes any sense or adds anything to this debate. I suppose the people who are paying exorbitantly high rents, when compared to their neighbors in identical apartments, are not suffering any hardship as a result of this policy. How about families who are struggling to pay market rates and find apartments that are large enough, while people with RS deals sit in huge apartments, forever.

Rent control and stabilization are some of the biggest wrongs that hapenned leading to "urban decay".

I think this communist-inspired crap forced(is forcing) many working professionals to live outside Manhattan - Queens, BK, BX, JC, Hoboken or Pavonia.

Pro-rent stabilization argument #1: cops.

Have you ever been lost in Manhattan and tried asking a policeman how to get to, say, Gansevoort Street or Gold Street or Beach Street? They don't know, because they don't live in Manhattan -- they can't afford to. It's a civic good for certain city workers (I'll throw firemen in here too, and maybe teachers) to be able to live close to where they work -- not just good for them, but good for the people they serve.

ali r.
{downtown broker}

I guess it is easy to support rent control and stabilization when you have never owned a piece of property and have never had to cover the cost of maintaining the property. I have owned property for 25 years, have rented places out, have done my own repairs, and know the costs and risks involved with this kind of venture. Owners face large and real costs in maintaining their properties but, of course, tenants will never understand that. I find it funny that so many real estate agents I meet have never actually bought an apartment, but continue to sit in their RS apartments, while hawking property to others.

"Pro-rent stabilization argument #1: cops."

Let's see, aren't there something like 30,000 cops and 1 million RS apartments. Sure, give the cops each an RS place and free up 970,000 RS apartments. Throw in the firemen too, and free up 920,000 apartments.

407 I have owned property. And just how many real estate agents have you met who tell you about their living situation while hawking you apartments? For a guy that is constantly telling us what a straight shooter he is this sounds like a load of BS to me.

"I find it funny that so many real estate agents I meet have never actually bought an apartment, but continue to sit in their RS apartments, while hawking property to others." Give me a break.

When an investor buys an apartment building he/she knows the percentage of units that are RS or RC. Based on this information, knowing what the potential increase will be factoring in inflation etc they make a decision to invest or not invest. Simple so don't blame the occupants. Also RS/RC does not apply to buildings with less than 3 rental units so most brownstones are excluded. Have you owned a 6 story tenement building in Manhattan?

Rent stabilization is not for the poor. There are other programs focused on housing the poor. Rent stabilization is for the middle class, and while the system is far from perfect, the aim of maintaining a middle class in an area that otherwise would not have one is admirable. Sure, it is not a fair system. It is also not fair that bankers have been getting six figure bonuses for years and that some people can rely on family for help with down payments. I've lived in Manhattan for 20 years, in many different neighborhoods, and the single most influential factor that has driven up prices in all of those neighborhoods is the inflated salaries of people who work on Wall Street. RS is effectively dead of in Manhattan below 110th street, because nearly ever apartment vacated gets renovated and destabilized, but the increase of market rate apartments has not lowered prices one bit.

$150,000 a year is a lot of money for a single person, but for a family of 4 or 5, it is almost impossible to make ends meet on that kind of income in a good school district anywhere in New York City. When I moved to nyc, the lifeblood of the city was its creative community, its artists, its musicians, its writers, its actors, its filmmakers. Not its bankers (though we're all grateful for the financial support of the arts!) A system needs to be in place to keep these people in the city, and while that system may not be rent stabilization, it is often these folks who seek out stabilized apartments.

It's really frustrating to live in a marginal neighborhood, help make it a much better neighborhood, and then have to move out as you get older, get married, have a family, and need more space, since rents have been driven sky high but Wall Streeters. People try to build community in their lives, and a lack of affordable housing can make community building impossible. Yes, RS is not perfect, but rather than making blanket critiques, let's have a larger discussion about how to build and maintain affordable housing in New York City.

"Pro-rent stabilization argument #1: cops."

> Let's see, aren't there something like 30,000 cops and 1 million RS apartments. Sure, give the cops
> each an RS place and free up 970,000 RS apartments. Throw in the firemen too, and free up 920,000
> apartments.

Not to mention that there are neighborhoods with TONS of cops and firemen - Neponsit, Gerritsen, etc. - and those have few apartments, let alone rent stabilized ones.

Try again.

I pay $2495 for non-doorman small one bedroom in a rent stablized bldg. My neighbor pays $849 for the same apartment. resentment, no, envy, yes. He's a terrific man who works for the city and has lived there for over 20 years. Ali has it right..we would lose the policemen, firemen,teachers who currently live and work in manhattan.

Julia,
This is hilarious. As a renter, you are being hurt by the current system, yet, you support it. I am opposed to the current system but am benefiting from it because I own my own apartment. The rollback of the system would hurt me. Don't worry, you will get your wish, nothing will change with regards to rent stabilized system, and you will continue to get penalized with high rent.

It is no wonder you are desperately trying to buy an apartment in the city. Your neighbor, of course, it not going to be buying anything. The fact that he is a nice guy has absolutely nothing to do with the whether or not the system is fair.

> i has it right..we would lose the policemen, firemen,teachers who currently live and work in
> manhattan.

Guess what, WE ALREADY LOST MOST OF 'EM... because prices were too high BECAUSE OF RENT STABLIZATION.

Why do you think the city had to add those "you must live in the city" provisions in the contracts? Because everyone looked for cheaper apartments elsewhere.

I have a friend who is a cop 15 feet from me right here, and I know a bunch of firemen. They don't live in Manhattan. Their coworkers don't live in Manhattan.

Pretending that RS would keep them here is insane... THEY ARE NOT HERE....

If prices were lower - as would happen without RS - there is a better chance they would have.

The fact is that firemen, police and teachers are decently compensated- certainly not rich by any standards, but definitely enough to afford $1000-$2000/month for an apartment. Why is it that they have to endure tortuous commutes from the outer boroughs so that some retired cat lady can sit on her ass all day watching Regis and Kelly while paying $548 for her Manhattan apartment? Defenders of RS, please don't pretend that it is somehow helping to preserve the middle class in NY. It's not. If anything, it imprisons the non-working poor in their rundown apartments and renders the rest of the city prohibitively expensive to anyone except for the "rich." It's a city of haves and have-nots, and the middle class is just invited to visit for the day.

I sold my apartment last year and am currently renting until I can buy or else leave new york. Yes, elimination of rent stablization and rent control would change the rental market BUT, I strongly believe in the greater good and rent stab and rent control helps many more people and keeps manhattan diverse from the likes of Kylewest. I'd would rather keep him and his hatefilled policies that hurt so many people out of manhattan than those that pay lower rents.

Ah Julia,
We have shown you over and over that rent stabilization policies do not serve the greater good but you persist in believing it. If the rent stabilized properties came on the market, rents would settle lower for the vast majority of people. Your friends might have to pay more, but with all the savings he has realized in the last 20 years, he can probably afford $500 more a month.

That guy I knew of who had his rent stabilized lovenest in Stuyvesant Town had saved enough to buy a nice big house in New Jersey, on the water. He still wouldn't let go of his rent stabilized digs. This is to say nothing of the people I knew who were renting them out at higher prices, on the sly.

By the way, kylewest has made some of the most intelligent comments related to this and many other subjects. I have not found them to be filled with hate. I don't know kylewest at all, only from what he has posted. Pointing out the flaws in social policy is not posting hate.

Perhaps I am missing something, so please correct me if I am wrong. It seems to me that most people on this thread are in agreement that social and economic diversity are a great thing for NYC. Where the difference in opinion comes in is whether or not RC/RS actually does what it is intended to do or if it actually worsens the problem of high-cost housing.

Is that about right? Again, if I am wrong, please correct me.

I think this is an interesting discussion. So, can we see more examples of how some feel it is working and some feel it is not working? Real examples/numbers. I think that Kylewest gave some indications that the numbers don't support the theory. My guess, is that it is probably a little of both.

Julia do you even read what I write? I still don't think you get what I said. First, I didn't attack you at all--I said I think we agree on most of this! Little insecure? Re-read the post--there is no personal attack, I just asked you to read my post more carefully. Which you obviously didn't.

And while I agree $175K isn't a lot for a family in NYC, I'm more concerned about people earning even less. $175K is a king's ransom for a lot of people with kids--how about thinking about ways to help them since rc/rs doesn't?

As for your attacks on me, baby you don't know the first thing about me and focusing on my sexual orientation is pretty homophobic since it hardly defines me. I've devoted my career to serving the people of this city and working with some of the most disenfranchised, vulnerable and abused in the city. I don't get bonuses, I haven't had a raise to my rather modest income in over 4 years, and the cost of living in NYC is something I wrestle with every day just like most NYers. I've lived here my entire life and love this city enough to wake up every day and want to work to make it a better place. So thank you for the stereotyping and insults. Adds a little cheer to the day. Good work.

I do want diversity in NYC as I said above. Where we disagree apparently, if I can make sense of what you say, is that I don't think rc/rs helps to effectively achieve diversity. Rc/rs is a very wasteful, inefficient way of achieving diversity since those who benefit are not especially people who increase diversity. They are people who get "lucky." A single guy earning $160,000 a year can inherit his parents' lease in a Park Avenue building but a struggling family of 4 earning $45,000 can't find a rc/rs apt and needs to pay market rate. How is that fair? You espouse the same goals I would for the most part endorse, but your conclusion that rc/rs moves us toward those goals is deeply flawed, IMO.

If you can point to the words that made you feel "anger" in my posts, I'm happy to reconsider how I said something, but you leave me baffled.

"I'm happy to reconsider" who cares to reply to your elitist rants. Calling me homophobic because I was equating your statement that you were socially liberal and being gay does not make you a liberal is a foolish comeback.. You postings on another thread about gay marriage was one of the most moving posts I have ever read. It reminds me that Hitler loved poetry.

"Perhaps I am missing something, so please correct me if I am wrong. It seems to me that most people on this thread are in agreement that social and economic diversity are a great thing for NYC. Where the difference in opinion comes in is whether or not RC/RS actually does what it is intended to do or if it actually worsens the problem of high-cost housing."

I think thats it.

I used to be 100% against RS being more of a free markets/efficiency guy.... AND seeing how it almost killed NYC in the 70s, with the landlords burning their own buildings because of RS.

That being said, in a city on the rise, I reocognize that the diversity is good for us all. Having more artists and folks of color keeping this from being yuppietown.

But the current regs just don't do it. The best RE deal of all my friends.... used to be mine. I had a 1 bedroom in 10022 for... well, I won't say it. Lets just say, it was on of those crazy numbers. And, no, of course I shouldn't have been any more entitled to it than a cop or an artists.

I like the artist subsidized spaces. I like the teacher housing stuff. Thats great. But the general RS, where I've seen more folks who are attourneys and well paid other things living in places being subsidized by the rest of us. And many of 'em hate the "golden handcuffs". They want to move, but feel the deal is too good.

Or, you get scammers. Charles Rangel takes 4 apartments. My old 100% RS building had one guy who used it as a storage space and lived somewhere else. Other folks who used it as an NYC crash pad (they lived in North Carolina). I'd like to say these were the exceptions, but less than half (maybe less than 30%) of my RS building was using it for the "right" reasons... and none of them were cops or artists.

Ok, so they destabilize the rich folk. Over $170k. Now over $250. Thats too high a bar. But then MINIMUM RENT? Are we kidding? If you're rich and have TOO good a deal, you keep it? $2700? Thats insane.

The current system is a joke.

"$175k before taxes for a family of four is not a lot of money..."

Ummm, I PERSONALLY know individuals who make that much who have bribed there way into rent-controlled apartments, bribed the super to look the other way while there girlfriend moved in, and thus taken that space away from a real 'needy" middle class family. And I know many other cases of people who go out of their way to lie about their income (think therapists and doctors who practice out of rent-controlled apartments and take cash only.) Most people I know with rent controlled apartments in NYC or back when I lived in SF are rich, white, and well-educated.

kylewest: The system stinks, and it's likely to keep stinking. That said, a person with your levels of energy and commitment can probably find more productive outlets. This subject just isn't worth it. It's a big, fat windmill, and I would urge you not to waste time tilting at it.

> "$175k before taxes for a family of four is not a lot of money..."

Its $250k now, and its two years in a row....

It is amazing to me how people who get these kind of deals, and cheat to keep them, never for a moment think that they might be depriving someone else of a place to live. I have bet my money twice that the system would not be changed and I think I will go bet a third time, especially now that I have learned that they raised the limit to $250k. I am sure nobody is going to hit that limit two years in a row, with creative accounting being what it is.

By the way, anyone on this thread who pays tax-deductible interest on a mortgage or coop loan should look in the mirror before railing against economically counterproductive housing subsidies. This particular fish stinks at both ends.

By the way, Julia, your last comment was totally out of bounds. You owe kylewest an apology. He has not attacked you in that way.

West81st, so you are saying that the mortgage interest tax deduction should be done away with? I agree with you but know that is one of the third rails of politics that nobody is going to touch.

407PAS: That's exactly my point. On the local level, rent stabilization is the same type of issue in NYC politics. Nobody thinks the system makes sense, but there aren't many local pols who are eager to gamble their careers on changing it.

Of course, we might also bring up how the AMT, which was designed to catch a few millionaires back in the 1950s, who did not pay any taxes, and is not indexed to inflation, is hurting more and more middle class people.

I'm a long time opponent of rs/rc and I'd like to share a few stories:

As an architect I came across a townhouse that a client wanted to buy and convert to a single family. It was empty except for a healthy, educated, 55 yr old woman that had been there for 15 years. The deal never happened because this woman wouldn't vacate for less that $750K. This is what's most attractive about the system to the inhabitants - waiting to hit the lottery on someone else%u2019s buck.

Next, I met a woman who is a neighbor near me upstate that was in a protracted battle with her landlord in the city because he wouldn't renovate her 5 room apartment on Riverside Drive that she pays $1400/mo for. She paid over $400k for her lake house. This is another typical scenario whereas rc/rs tenants who pay next to nothing in rent live quite lavishly at their landlord%u2019s expense.

A colleague in my office pays $1200 for a 2 bedroom on the UWS. Me and my wife pay $5000 for a similar apt. He's single and we've got 2 kids. We make the same money but he lucked out by finding this apartment where I got stuck paying market. Again, rc/rs is rarely about the little old lady that's forced to eat dog food and has nowhere else to live. It's a boondoggle for far too many and that's why it's defended so vigorously. And the politicians figure you can NEVER go wrong by voting against a landlord.

And it%u2019s not about diversity or compassion. It%u2019s about personal responsibility. You should wear clothes you can afford, eat in restaurants you can afford, and go to schools you can afford. Most people would agree on that, correct? But so many people think that their landlords and those of us who pay inflated market rents should subsidize them if they want to live in a neighborhood or building that they can%u2019t afford.

We'd all be better off if the old ladies with the dog food got subsidies. Then we wouldn't have an inefficient marketplace, with apartments falling apart, and we wouldn't all be subsidizing 99 yuppies for the hope that we get that 1 dog food lady.

Hell, here is an idea... allow destabliization for a fee, and put the fees to a dog food lady fund.

Thanks PAS, but I think julia has become utterly irrational. She needn't apologize because there is pretty clearly something wrong there. I'm still not sure what set her off on the "elitest" jag. I have no idea what she's seeing, but it isn't the posts you and the rest of us are reading here. West81st, you're right. No more windmill tilting for today.

cherrypicking the posts that agree with you is totally irrational.

"And the politicians figure you can NEVER go wrong by voting against a landlord."

Exactly the reason I will never be a landlord in New York City. I would rather be a homeless dog, I think I'd get more respect.

I find it funny that when I come to sell my apartment, I am hammered relentlessly on my higher than average coop maintenance, when I have adjusted my price downwards to compensate for this fact, but you've got people who are paying almost $4000 a month under market rents and nobody is screaming. It is like the lottery.

By the way, my wife and I spent months looking at two bedrooms on the Upper West Side and knew we were going to have to lay out significant cash to buy something. Even then, we came up short finding anything decent, time and time again.

The theory behind rent stabilization makes sense, but I wonder how well the standards are enforced. For example, I've come across many established professionals who continue to live in rent stabilized apts and won't move. Can't blame them, but these are folks who could well afford to buy or pay market rent (see Crashwait's post above).

The purpose of RS would be to benefit the elderly or those with lower incomes, artsts, teachers, etc.

I'm no expert on rent stabilization rules, but a single person w no kids earning upwards of $175k could well afford to pay market rent in prime Manhattan. Something just doesn't sound right.

"Next, I met a woman who is a neighbor near me upstate that was in a protracted battle with her landlord in the city because he wouldn't renovate her 5 room apartment on Riverside Drive that she pays $1400/mo for."

Right, because the renovation is going to cost the landlord $30-50k, or more, and she is paying $16,800 a year in rent. Of course, by all of those other posters, the landlord is plenty well compensated by the rent stabilized rates, so why is he fighting in court?

i fully support rent stab given the current housing policy on this country. which till now used to be a ponzi scheme given that for the most part housing transactions are just a sum 0 transfer. so the policy was making sure those that buy before profit from those that buy later from them. till no moron remains in town.

i cannot support not subsidizing rents when the country subsidizes homeownership like there's no tomorrow. as soon as homeownership is not subsidized anymore then yes, we could not subsidize renters given that they could buy a non-inflated home. asking renters to buy a home in this mkt is asking them to get in debt for an inflated asset to the benefit of previous homeowners that are ripping the benefits of the increase of homeownership subsidies during the last decade and more.

Who is asking the rent stabilized renters to buy a house in this market? We were asking that they pay a fair share of the costs in their rental buildings, which they do not do, with these artificially low rents.

The theory behind rent regulation may make sense, but it doesn't work according to theory. Because the law doesn't control who gets a regulated apartment, it cannot control diversity. Also, because an apartment only becomes deregulated when the occupants make $175K AND the rent reaches $2,000 - there is no guarantee that people making $500K or more could reside in the apartment (so long as the rent is under $2,000).

What rent regulation does is push the middle class out of the city. It creates two subsets of apartments. Rent regulated apartments (for the lucky few who get them and then basically pass them down from generation to generation) and apartments which are artifically inflated due to rent regulation and can only be afforded by the rich. So basically, you have the lucky and the rich.

You also have buildings filled with rent stabilized tenants that could use rehabilitation or redevelopment but won't be touched by developers because of the fear of massive buy-outs to get rid of the rent-regulated tenants; landlords who are struggling to keep up with rising costs in the face of government regulated increases on their income; and huge budgetary expenses by the City and State (anyone wanna guess what it costs to run DHCR?). All for a program that doesn't come close to accomplishing what it is supposed to in "theory."

Not to mention the fact that having the government decide the demographics of a city (rather than market forces and demand), is suspect from the get-go.

Uh-oh. Look out joepa. Julia's gonna be calling you Hitler in a minute.

"pay a fair share of the costs in their rental buildings, which they do not do, with these artificially low rents."

ok, to make my obvious point even more clear: housing is inflated in great part thanks to subsidies (which make no sense). housing is a substitute of rents, hence they increase rental costs. yet again, i'm twice trying to make the same point (before with over inflated wall street salaries that don't reflect at all wall street workers contribution): the market price is not necessarily the fair price. price/cost and value don't align when there are huge distortions like houseownership subsidies.

the bigger issue here is not rent subsidies but homeownership subsidies. i 100% support the end of housing mkt distortion: get rid of all homeownership subsidies. then rents will go down and rent stab programs will not be needed.

"You also have buildings filled with rent stabilized tenants that could use rehabilitation or redevelopment but won't be touched by developers because of the fear of massive buy-outs to get rid of the rent-regulated tenants"

and if picked up by developers, lead to shaky condo conversions because buyers cannot figure out their risks going forward due to all of the deferred maintenance and the low rental income provided by the remaining rent stabilized tenants. So, the buyers also won't touch the units either, in many cases.

I agree. Most housing subsidies were pretty stupid too.

If you want to help first time homebuyers, sure. Low income homebuyers, sure.

But all the deductions on $1k mortgages just served to push up prices higher... and led to speculation... and then this massive crash we have.

And then the FLIPPER DEDUCTION? Say 2 years and pay no taxes on the gain? How dumb is that?

Of course, we can't do it right now, or we'll absolutely destroy housing... but, yes, the mortgage subsidy and the no tax on flips is insane.

Sure, admin, eliminate all housing subsidies, I agree with you. We all know that none of this will ever happen. New York won't fix its housing market and the Federal government is not going to fix the national housing market. We're stuck.

admin... i like you...

mortgage deduction is the most regressive tax on our books...

and WTF? It seems to me our little gov't loves to slice and dice its populations into subsets of subsets.... me thinkz it's their way of keeping us hating each other....

I hate tax season, Tom D. and Geitner can't understand it so what chance do I have with 2 nannies, 1 business, 1 yacht (tax deductible), 4 cars (2 of which are deductible), 2 vaca to Hawaii (1/4 is deductible), wife's w-2, and "charity" to my children's private school (no effect on their admission :) )....

Oh... shrimpie/old/petri.... yeah I know why do I show off on an anonymous thread :(

what about paying no capital gain taxes on the 1st half million for 1st time residency and the no tax if you buy another home within certain time frame ...

with the same tocken the gov shouldn't make me pay capital gain taxes on my stocks given that i'm going to buy another company's stock within a certain time frame. buying more house than absolutely needed is CONSUMPTION, we are taxing investing and not consumption? plus, we subsidize debt? come on! it's a miracle the shape of the economy is not even worse than it is.

the current problems are the obvious ones when you give incentives for consumption, call it investment and tax real investment while subsidizing debt to consume depretiating assets.

jopa, I agree with you 100%. If the city's going to continue w RS, they should have a more effective way of monitoring. Income and rent amounts should be adjusted for size of unit, household income, total # occupents, etc.

Big difference btw a guy earning $170k w a family to support and a single person w no dependents. Or one person making $350k and paying $1400 for a 2b/2b, and a single mom earning $70k who pays $1000.

We hear all these stories, but does anyone know if studies have been done to see if RS has provided overall BENEFITS as intended?

Anyone who wants to get rid of rent control should also be in favor of end mortgage tax deductions and tax abatements. Let's see how people feel about paying the full cost of their maint. One of the government's toles is to protect people from the full, brutal force of a capitalist, free market. Without regulation you have social chaos. It is perfectly legitimate for the government to promote certain socially beneficial agendas - be they residential construction (tax abatements,) home ownership (mortgage tax deduction,) or social cohesion and fairness (rent control.) There are benefits and draw backs to all of these programs. But unless you advocate zero government interference in the marketplace (which I think is foolish if you know any history) then you should not be ranking on rent control without an equal vehemance against other subsidies.

How come I'm the only one who gets called Hitler? Uptowngal--I think there have been such studies. Let me see what I find. One problem though is that those intended to get benefits were those living in NYC during WWII and its aftermath when there were no resources to build new housing and there was fear of price gouging. That "emergency" situation was the constitutional justification for the law which may have been deemed unconstitutional otherwise. A legal fiction of re-certifying the "emergency" occurs every so often to enable the rc/rs laws to continue if I recall correctly.

"what about paying no capital gain taxes on the 1st half million for 1st time residency and the no tax if you buy another home within certain time frame ..."

They got rid of that. That, which made a hair more sense, was replaced by the unlimited deductions on $200k in profit each time you sell...

I believe the exemptions are $250k filing singly, $500k filing jointly.

with no need to buy another home, which was causing people to always buy up to more and more expensive homes, in order to avoid the tax, a stupid result of the law. Why do couples living alone need 6000 square foot homes? Because they sold 1200 to buy 2500 to buy 3000 to buy, you get the idea. Now people can buy down and keep some of their cash to live on.

except that didn't actually happen....

this led folks to flip more often, and partically created the current mess...

yeah, some people will always put a noose around their necks, no matter what you do for them...

I'm not sure the argument comparing rc/rs to mortgage tax deductions follows. The deduction is available to every homeowner nationwide whereas rc/rs is for a microscopic minority of renters in NYS only. The deduction encourages homeownership whereas rs/rc discourages it. The deduction in NYC helps create well funded, and therefore, well maintained buildings and neighborhoods in NYC, which benefit everyone. Rs/rc discourages investment because landlords and coops with controlled tenants have less income to maintain their properties (you can see evidence of this by looking at any of the hundreds of brownstones that have been divided into controlled apts).

This is probably one of the clearest pieces I have ever seen on the real subject of who benefits from the rent control system in NYC. http://www.manhattan-institute.org/pdf/cr_34.pdf Now I am sure that plenty of people here will take issue with the source and not engage in any of the substantive issues. It is much easier to get riled up and start calling each other names than think about the complicated issues here. And julia, I don't get where you are coming from at all. Trying to stop any rational discussion is actually the first sign of fascism, so maybe you should be careful about who you are calling Hitler. You still owe the thread some economic justification for the policy that does not involve some self induced sense of how to properly populate the city. Why don't you go around and tell me who deserves to live in Manhattan and who does not. The elite point of view is actually telling all the rest of us who should live where and then helping the government mandate your point of view. I thought this country was free.

NYCJunior - I think you are oversimplfying things. The mortgage tax deduction is a bit more complicated than rent regulation and I don't think you need to be in favor or against both.

I'd be in favor of rent regulation if I thought it actually worked and accomplished something. While it can be debated, I think that the mortgage tax deduction does accomplish something (it incentivizes home ownership).

Also, I think there are far greater potential problems (and unfairness) with phasing out the mortgage tax deduction (where people invested millions of dollars in relying upon the deduction), rather than phasing out rent-regulation.

uptowngirl... hmmmmm... would you take an I-banker making $400K/yr or a janitor making $100K with a RS/RC 3 bdrm on CPW paying $1/K month?

Pls don't hit the "report abuse" button... you brought this on yourself by stating:
uptowngal
7 days ago
ignore this person
report abuse
It works both ways. These guy want arm candy/trophy gf's and wives so they can feel good about themselves, and would never consider someone more down to earth who's larger than a size 2.

If you feel you only need $$ in order to attract someone, then don't be surprised if the woman in your life freaks out because her credit cards are cancelled. You get what you pay for.

joepa... WTF? no complication.... mortgage deduction / $500K cap app ded is the MOST regressive form of taxation on the BOOKS (this comes from a guy who will fully take advantage of it when he buys)....

The more appropriate policy if we are interested in subsidizing a certain group of people is to provide the subsidy directly to the person and then let them go rent an apartment within the free market. Attaching the subsidy to the apartment instead of the person has created all the perverse incentives for both renters and landlords in the system. And have the elderly stay in a large 3 bedroom apartment in manhattan when that apartment is more appropriately distributed to a small family does not make any sense to me. It does not improve the diversity of the city one bit to keep out new comers and preserve long term residents. If anything, the long term residents are likely less diverse as a population.

I'm not arguing that the various subsidies do not have coflincting goals or that they a complementary in their purpose. However, they both achieve specific goals. Mortgage deduction helps increase home owenership. Rent control help achieve social cohesion in municipalities and neihborhoods where it is in force. I don't think there's anything wrong with having both. It doesn't matter that one is a federal program while the other is not. I'm just making the case for them as government policies, the level of govt is not relevant.

briguynyc, well said. I think that sums it up nicely.

NYCjunior: I am missing something. How does rc/rs help achieve "social cohesion." What is social cohesion?

Of course, it is the wonderful social cohesion that is created when the rent subsidies create huge rent disparities between people living in identical apartments. These disparities spread a sense of fairness and good will to all those who come in contact with them.

nycjunior1...social cohesion is exactly what the rent guidlines were put in place for...don't let the "elite" try and make it anything else.

407pas...what about the disparities between the working poor and the bernie madoffs of the city and the country...that could cause more unrest than anything.

Rent guidlines were put in place right after WWII. The concern was that the sudden influx of returing soliders would overwhelm the demand side of housing supply and cause a sharp increase in prices. It actually had nothing to do with protecting the working poor. That is just the kind of tactics that is used today to stifle any actual discourse on this policy so that people do not try and think through whether it provides the proper benefits.

I am not trying to say that the perfect rememdy is to be had by simply lifting this policy and hoping for the best. There are many other forces at play that distort the NYC housing market. But just pretending that rent control works without thinking through the impact of the policy seems like a big mistake. If that is an elite statement, than perhaps julia and help school me on the correct way to talk about it.

I am still appreciating the delicious irony of seeing Julia defend a policy that takes $1600 more in rent money out of her pocket every month than it does from the pocket of her neighbor down the hall. Such is the nature of this debate. There is no winning it. Elitism has nothing to do with this issue. The people who defend rent stabilization are probably the same ones who complain if their neighbor got some small purchase for $5 less than they did.

Directing responses at Julia is pointless. This is the same poster who told gay couples to suck it up when faced with housing discrimination on another thread.

there is no irony...as I said before resentment no, envy, yes, yes, yes...Yes, well educated old people living in apartments for 40years, in my opinion is wonderful..think of all we can learn from them. They probably worked as teachers, etc. they knew New York from the 50's on. This is what I love about New York. I'm in the laundry room and talk with the "old timers" and the stories are great.

kylewest..you are a liar and what you said is slander..prove that i said that..

My family has both benefited from and to some extent exploited rent regulation. I grew up in a rent controlled apartment but one unintended but very real result of rc/rs is that senior citizens are unable to downsize to more appropriate living spaces because of the disparity in rents. My mother had lived in her rent controlled aparatment in the West Village since 1942, when the neighborhood was home to warehouses and gin mills not designeer boutiques and celebrity lounges. In her later years she would have been thrilled to move into a amall one bedroom or even a studio apartment but she didn't want to leave her neighborhood. Of course it was impossible to find an smaller apartment for anywhere close to what she was paying under rent control. As a senior without signficant means, it was right for her rent to be subsidized but but the same token it would have made more sense to find her an appropriate space, renovate her exisiting apartment and rent it at market or at least a higher stablized rent to a family.
The building ended up going co-op and I purchased the apartment, selling it after my mother passed in estate condition after I lived 25 years in my own stabilized apartment. When I first moved in as an entry level employee the regulated lease was a life saver but over time it became really a golden handcuff that stopped me from upgrading my living space without sacrificing the other things I had grown to appreciate. When I bought my Mom's place I should have lost eligibility to keep my rs unit, but I didn't advertise it....having friends who are "landlords" I felt guilty about this, my own landlord was not a big player, but obviously not enough.

Should rent protection be avaialble to seniors, the disabled, the poor and middle class families (of all descriptions--not just mom, dad, 2 kids and the dog)?
No doubt.

Should rent protection be available to people with second homes? Those who use their apartments as pied a terres or places to house their kids when they go to NYU? Should highly paid people be allowed to maintain rent stablized apartments?
Absoultely not.

Now how do we make fair and results of a poltical process not oxymoronic concepts?

We should start changing the system now, and say that rent control/stabilization ends in 15 years for those under 65 15 years from now. No one debates the need for rent control for seniors, disabled, WORKING poor. 15 years is enough time to plan for future housing needs, kids will grow up etc. The reason many people who have rent control cant afford to move (at least those who work) is most of them have based their lifestyles around having rent controlled/stabilized housing-so they don't have to make as much as their neighbors.

lizyank...i completely agree with you..I'm wondering if your mother asked the landlord to downsize her for the same rent. It must have been a great place to grow up...great post

I'm not envious of those who live in rent stabilized apartments. My experience with owning and renovating property has enriched my life. When you own a piece of property, you can't complain that the landlord isn't doing this or the landlord isn't doing that. You have to do things for yourself. I have renovated places and I have rented them out. I have made repairs and I have paid all the bills. I feel engaged in life when I own something and try to make it better.

I am now selling my current place. I renovated a lot of the place. I stripped off the terrible popcorn ceiling and plastered the ceiling myself, a job that took me two months, on and off, and resulted in severe muscle pain in my shoulder, so much so that I could not lift my arm over my head for weeks after I finished the job. I have had about ten potential buyers say the ceiling looks great, and, you know what, it makes me feel good.

If I am jealous of any man, I am jealous of Millard Fuller, the man who founded Habitat for Humanity. He helped a lot of people get decent housing. I worked for Habitat in Bed Stuy when I was unemployed. It was hard work but it was rewarding.

Millard's obituary is here:

http://www.nytimes.com/2009/02/04/us/04fuller.html?_r=1&ref=obituaries

I wish I had the courage to follow my convictions as strongly as Millard followed his.

Actually the landlord tried very hard to evict my parents based on their making "capital changes to the premises without permission" (they had annexed the adjoining apartment to make a 2 bedroom around 1960 based on a handshake deal with the previous landlord with whom they had a great relationship). This harrassement we all believe contributed to my father's death not long after. After that, the building went co-op so there were no longer vacant apartments under the landlord's control--not to mention the fact that relations between my family and the landlord were not exactly conducive to working out a solution. So my mother stayed in the apartment and eventually she had a even meaner landlord to deal with--me.

Pro-rent stabilization argument #2: new residents.

An economic system that needs new residents for growth is well served by components that attract and assimilate those new residents. My experience of coming to New York City was far different from Julia's today, because when I came to the city twenty years ago, there were affordable apartments that weren't heinous and taxing commuting distances from entry-level jobs.

Being able to live in an affordable apartment (I was in an RS place from 1990-1996) gave me a little financial breathing room -- which enabled me to explore different careers (something which I am still doing, since I am on my third ;>), and let me find my slot in the economic engine of the city. My RS experience acted as a spark plug, and helped me become a homeowner, and eventually, a landlady (sorry PAS, it's not always one-or-the-other).

I realize I was the beneficiary of an economic subsidy, but New York City and New York State have gotten a LOT of tax payments from me over the past two decades in return. I imagine in decade three, should I be lucky enough to stay in this city, I'll end up creating a job for yet another New Yorker.

ali r.
{downtown broker}

ps: waverly, nice comment that we probably all have the same goals and are just arguing over efficacy here.

pps: can we cut the whole "Hitler" thing? It is offensive.

ali..great post..always great insight.
p.s.Hitler is offensive...so is slandering my good (false) name

Ali,
I understand what you're saying. Unfortunately, the rent stabilized places had been pretty much locked up by everybody else when I showed up in town. I think most people are complaining about the fact that there are so many abuses in the rent stabilization system and that the places are not going to the people who need a little financial breathing room.

I had managed to buy houses before I came to New York, so I went out and bought something when I got here, even though I had to rent a couch from a friend for months until I could take possession of the apartment. I remember a bunch of rent stabilized people at some Christmas party laughing at my deal, but, you know, it turned out ok.

I am not quite sure what you mean by the one-or-the-other comment. I am both an owner and a landlord, although not a landlord in New York. I have met some wonderful people as a landlord and have tried to treat everyone I meet with decency and respect. The two sides are polarized in New York so I avoid getting into that business here. Good luck with your landlady work.

You know, everybody has a personal story about how rent stabilization may have helped them, but the people who are hurt by rent stabilization never seem to speak up, maybe because they don't realize how much more they are paying as a result of the system. We can't even convince Julia that she is getting a bad deal, when it is obvious. There is little hope of changing the system.

407pas...love your postings but your missing the point what i was saying...sometimes for the greater good..I envy those with rent stablized apartments but I'm happy that they were able to have a life in manhattan and add to the cultural experience of all of us.

I'm sorry, Julia, I am afraid I do not believe the current system serves the greater good. The inequalities that it creates hurt the greater good, but people have become blinded to that fact. Like I said, I have put my money down on the idea that the system will not be changed. I do not think I will be proven wrong.

SIggy98 offers a reasonable proposal. Play with the numbers, but the system could be amended to more effectively achieve the contemporary perceived aims of rc/rs (the original aims had nothing to do with all the "plusses" we discuss now as briguynyc points out in describing the actual historic genesis of the system). Why no responses here to Siggy? Like Siggy I suggested a couple of days ago that one fix could be rent stabilization ends across the board in X period of time (2 years?). The only exceptions would be for people over 62 who have lived in the units for over 2 years as their primary residences. They would have Y years until the unit is released (10? 15?)--ample time to make alternative arrangements if necessary. Add people with handicaps and working poor perhaps. Remove rights of children to inherit leases.

Let us set aside for the moment briguynyc's questioning of whether the government's role should be social engineering. Even among those who agree government should do something for the elderly, the working poor, to encourage newcomers, to keep middle class families--might it not be better to attach benefits to such individuals rather than to any given apartment? When the benefit goes to the real estate itself, look at all the abuse that results. After all these decades, there is no evidence I can find anywhere that new comers to the city benefit from rc/rs. The fallacy most posting in favor of rc/rs make here is skipping over the fact that the current system does NOT target any of the groups many feel may be deserving. It's just tosses golden tickets into the air and a free for all results. There must be a better way to do this.

"Tosses golden tickets into the air"? This argument about RS seems more about ones personal feelings about the subject. First you have to stop dreaming about "free markets" we don't have them but that's another pandora's box. When I moved here in 1981 every apartment I looked at was RS and there was no shortage of apartments to see anywhere. I believe the vacancy rate was approx. 9% but it seemed like more. I choose to live in the East Village my rent was $200 dollars per month for a nice floor through. There were Always at least 3 apartments vacant in the building. Same went for the West Village and Chelsea no shortage of apartments and most were RS and rented at what the market could bear.

This bubble and the mass influx of people wanting to live in Manhattan has more to do with the rental price of apartments than RC/RS policy. Most of you just have not lived here long enough. And in the 70's it wasn't like every landlord was burning his buildings lol. It was our overall negative economy that caused most of the distress. Those renters in the South Bronx were probably over paying!

Also most of these RS apartments are in crappy six story tenements in less than prime areas. Most here would not be renting this type of housing. Also they are all getting 2-6& increases at each lease renewal...I just rented my RS apartment last year, come live up in Washington Heights there are plenty-two in my building are open now. You can get a nice one bedroom for $1300 per month. Hey Duke Ellington lived in this building..