Manhattan Rents Set to Spike Higher for 2008 and 2009
Started by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
Discussion about
The board that regulates rents for New York City’s one million rent-stabilized apartments proposed a tentative range of increases Monday night that could lead to larger increases than last year’s. The city’s Rent Guidelines Board recommended increases of 3.5 percent to 7 percent for one-year leases and 5.5 percent to 9.5 percent for two-year leases. The nine-member board will hold two public... [more]
The board that regulates rents for New York City’s one million rent-stabilized apartments proposed a tentative range of increases Monday night that could lead to larger increases than last year’s.
The city’s Rent Guidelines Board recommended increases of 3.5 percent to 7 percent for one-year leases and 5.5 percent to 9.5 percent for two-year leases. The nine-member board will hold two public hearings on June 11 and June 16 and is scheduled to set a final number, not a range, at a meeting on June 19.
The proposed range of increases apply to leases renewed between Oct. 1, 2008, and Sept. 30, 2009.
The board’s 5-to-4 vote left both tenant advocates and landlord representatives equally disappointed. A landlord group had called for higher increases, while tenant leaders, many of whom are pushing for substantive reform of the rent-stabilization system, supported a proposal by some board members for a rent freeze.
“I’m afraid it’s going to be higher than last year’s increase, and last year’s increase was way too high as it was,” said Barry Soltz, 51, the legal coordinator for the tenant association at the rent-stabilized Janel Towers in the Bronx. He was one of a few dozen tenant advocates at the meeting, which had a low turnout compared to previous years.
Last year, the board approved increases of 5.75 percent on two-year leases and 3 percent on one-year leases. Those increases were modest compared with those passed in 2006, when the board voted to allow increases of 7.25 percent on two-year leases and 4.25 percent on one-year leases.
The board decides the size of the allowable rent increases for rent-stabilized apartments, and its annual round of public meetings and hearings have become a rowdy dramatization of the battle of wills and pocketbooks between the city’s landlords and tenants.
In June 2006, jeering tenants with drums, whistles and handmade rattles tried to shut down a board meeting, prompting the chairman, Marvin Markus, to call a two-and-a-half-hour recess.
The notice announcing Monday night’s meeting at the Great Hall at Cooper Union in the East Village warned that “items that are reasonably likely to disrupt the proceedings, such as noisemakers and drums, are prohibited and may not be brought into the meeting venue.” The warning hardly seemed necessary, however, since more than half the seats in the Great Hall were empty during much of the meeting, and those tenant leaders in attendance were mostly mild-mannered.
At the start of the meeting, a board member representing tenants proposed a rent freeze, which was struck down 7 to 2. A member representing owners then proposed 9 percent increases on one-year leases and 14 percent on two-year leases, which was also voted down 7 to 2.
The stalemate was broken when Mr. Markus proposed the range of increases that ultimately passed. There were angry shouts from the audience as Mr. Markus made his proposal. “Stooge for the landlord, that’s all you are,” one man screamed.
The proposed rent increases come as advocates for moderate and low-income housing and some elected officials have grown concerned about the affordability of the city’s rental market. Representative Anthony D. Weiner of Queens and Brooklyn released a study last month that found that roughly 500,000 New Yorkers were spending 50 percent or more of their income on housing.
Key factors in the range established by the board on Monday night are recent trends in housing affordability, tenant income and owner costs highlighted in three reports issued by the board’s staff last month. One of the reports, called the Price Index of Operating Costs, found that operating costs for rent-stabilized buildings increased 7.8 percent in the last year, in large part because of a rise in fuel costs and utility payments. The previous year, owners’ costs had risen by 5.1 percent. But another report showed that landlords of rent-stabilized units saw their net operating income — the earnings that remain after operating and maintenance expenses are paid — increase by 8.8 percent. That report was based on 2006 data.
Those dueling conclusions — an increase in owners’ operating costs but also an increase in their income — fueled much of the debate at the meeting. Tenants and their supporters view the Price Index of Operating Costs as a one-sided report and put more stock in the report that examines owners’ net operating income, while landlords used the rise in costs in the price index report to demand a larger set of rent increases.
The Rent Stabilization Association, representing landlords who own hundreds of thousands of rent-stabilized units, urged the board to adopt an increase of 10 to 15 percent, or a minimum increase of $60 a month. Joseph Strasburg, president of the association, said that in the last six years, operating costs of rent-stabilized units have grown by more than 40 percent, while the board’s rent increases in that time for one-year leases have risen by 20 percent.
“They will not cover the fuel costs at all,” Mr. Strasburg said of the tentative increases the board approved.
But Adriene L. Holder, a board member representing tenants, said a staff report showed that for every dollar of income, the typical landlord was left with 37 cents for debt service and profit. “This is more than a decent return,” she said.
The Rent Guidelines Board is made up of nine members appointed by the mayor. Two represent tenants, two represent owners and the rest represent the public.
This year, tenant leaders are intensifying their efforts to restructure the board. They are urging legislators to support a bill in Albany that would require City Council approval of all mayoral appointments to the board. The bill, sponsored by State Senator Thomas K. Duane of Manhattan and Assemblyman George S. Latimer of Westchester County, would change the composition of the board so that tenants, owners and the general public would each have three members. It would also bar the use of the price index report and eliminate the need for tenants to renew their leases.
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Response by paul10003
about 18 years ago
Posts: 101
Member since: Mar 2008
did a quick google search using terms: census bureau manhattan rent stabilized
what i've learned from some links from the first page of hits:
first link from tenant.net, "the online resource for residential tenants", dated 1997:
http://www.tenant.net/Oversight/RGBbrief/wholives.html "By comparing rent stabilized and unregulated households, we can see that stabilized tenants have lower annual incomes and occupy apartments with lower rents."
second link from gothamgazette, dated 2003:
"Almost 22 percent of rent-controlled apartments were occupied by tenants who moved in after 1971, most likely utilizing succession rights. That means that nearly 80 percent of rent-controlled tenants have lived in their apartments since 1971 or before. In most cases, those tenants are now aging or elderly. ... Tenants in rent-controlled apartments actually seem worse off than their non-regulated counterparts. Their median income was $20,120 in 2001, less than two-thirds the median of all renter households. This can probably be explained by the advanced age and fixed incomes of such tenants. In fact, rent control incomes have gone up simply because the really old tenants have died off," said McKee. "In 1970 there were 1.1 million. Today you have 60,000, so it's a program that is being phased out."
these are a bit dated, but a bit better than 1985. i cannot attest to how credible these sources are. but both are examples that refute your claim, houser. more importantly, yours was never an INCOME statement anyway; it was a WEALTH statement. not to be picky here, but there's quite a big difference between income and wealth (though obviously correlated).
well, that was a fun 20 mins wasted. thanks, houser. beats watching TV anyway. anyway, since you did take a sec to try to address your #2 claim (as i've numbered them in my prior post), feel free to work out your #1 and #3 claims, as well.
p.s. houser, i really don't have a problem being proven wrong. i have nothing to gain/lose from it. my only point is that you should try to back some things up with evidence. i realize this isn't a phd dissertation for anyone, so it doesn't need to be well documented. so at least try to use some LOGIC in what you're saying. otherwise... ... well, houser, have you ever heard of a news program called "Fox News"?
and in that same article, they kind of go to refuting your claim #1, as well:
"Almost 22 percent of rent-controlled apartments were occupied by tenants who moved in after 1971, most likely utilizing succession rights. That means that nearly 80 percent of rent-controlled tenants have lived in their apartments since 1971 or before. In most cases, those tenants are now aging or elderly. The data disproves the popular misconception that many of today's tenants under rent-control are lucky beneficiaries of family members' apartments. "The reality is you can't just pass on your rent-controlled apartment to your nephew in Arizona," said McKee. "To have the right of succession, the family member has to actually live there. People who try to manufacture a situation that doesn't exist don't get away with it."
now, one has to be careful since there's probably some important caveats in the footnotes to these tables, but at first glance, it looks like when you look at mean/median income for rent controlled and rent stabilized, it is lower than that for "all other renter housing" (which i assume means unregulated).
but again, this is INCOME, not WEALTH.
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Response by paul10003
about 18 years ago
Posts: 101
Member since: Mar 2008
AHH! didn't read west81st's post. he/she makes a very good point and obviously makes the distinction between wealth and income. west81st, thanks for your input. i honestly hadn't thought of it that way, and think it's a good analysis. not sure if it's TRUE per se (and i don't think you would stick your neck out to say that it was!), but certainly possible, given the way you've laid it out.
houser, you see how easy that was? just a dash of proper thinking, a sprinkle of logic, makes for a good recipe. you must be starving, dude.
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Response by poorishlady
about 18 years ago
Posts: 417
Member since: Nov 2007
Houser has been properly spanked, as he well deserves. Now he deserves to be ignored.
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Response by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
paul1003 I beleive and I'm sure you do as well that that survey is not entirely accurate and has some major flaws. In any event I thought you would enjoy the following article.
There's nothing liberal about rent control.
From: Washington Monthly | Date: 6/1/1986 | Author: Eichenwald, Kurt; Fleetwood, Blake
Washington Monthly
THERE'S NOTHING LIBERAL ABOUT RENT CONTROL
A single 38-year-old correspondent for ABC News is participating in an interesting program in New York City. Despite his salary of $70,000, he qualified for a roughly $1,000 discount in rent for his one-bedroom Manhattan apartment. He pays $560 a month. His secretary isn't quite so fortunate; she's not in the program. Although she makes less than a third of his income, she is paying $1,000 per month for an apartment half the size.
If the program were welfare, we'd call the lucky man a cheat; if he were a defense contractor, we'd say he is gouging the taxpayer. But the correspondent is a long-time New Yorker, so we'll just call him typical.
The program he has benefited from for the past ten years is rent control, and few New Yorkers are demanding an end to the inequity. Set up as a temporary curb against rapid wartime rent increases, controls have remained long after they were supposed to expire. Over the years, politicians have expanded the controls through a complex web of rules, governing rents for 1.2 million apartments, and more than half of the city's tenants.
Faced with a housing crunch, nine states, along with such major cities as Boston, Los Angeles, San Francisco and Washington, D.C., have instituted rent controls. As a result, 12 percent of the nation's housing is now covered by some form of control.
Liberal politicians and organizers tend to view rent control as the most effective way to combat abusive rent hikes by unscrupulous landlords and to guarantee cheaper housing for the poor. But rent control's track record in New York should make them think twice, not out of some abstract affection for the invisible hand, but because in practice rent regulations have benefited the well-off at the expense of the urban poor, fundamentally contradicting the principle of equity to which liberals subscribe.
Rent regulation has been inequitable in its application, as the case of the ABC correspondent shows. It has drained hundreds of millions of dollars from city treasuries, is open primarily to those with money and guile, and plays a role in exacerbating the housing shortage. Yet rent control has developed a culture of protective tenants frightened of an unregulated market and politicians who play to their fears, making rent control politically untouchable. It is a classic case of the majority gridlocking the political system for personal gain and in the process hurting the entire community.
As a World War II-era emergency measure, rent controls made perfect sense. New York was jammed with war workers, housing was scarce and housing speculation feverish. Congress enacted rent controls around the country in 1942 and repealed them in 1945. But New York retained its. Only 15 percent of the apartments in the city are now under the original rent control laws; the remainder fell under subsequent regulations. Rent increases are decided by a body called the Rent Guidelines Board, consisting of tenant and landlord representatives appointed by the mayor. Initially, rent regulations applied only to apartments built before 1947, but in 1969, in response to what tenants said were unjustified rent increases and landlords said was political pressure from the wealthy living in the new buildings, the city placed all existing buildings under rent stabilization. The rules governing rent increases are hopelessly complex in application but simple in principle: rent increases are controlled by the state, not the market. It would seem to boil down to a philosophical question of whether the market or the government can best balance equity and efficiency; a classic liberal/conservative split.
The first questions asked by liberals then, should be, are rent controls equitable? Do they help those who need it most? The answer is no. Consider the infamous Mayflower Madam, Sydney Biddle Barrows, who was paying $376.99 monthly on her apartment when her income from her "escort service' was more than a million dollars. Actor Darren McGavin held on to his $218.98 a month rent controlled apartment although he lived most of the time in his Beverly Hills mansion. Alice Mason, the celebrated hostess who brokers more than $100 million in co-ops and houses for the very rich, lives in a rent regulated apartment for a few hundred dollars a month. We found a vice president of an advertising company with a six-figure salary living with his wife in a huge apartment on the fashionable Upper West Side for $600 a month; an elderly woman who is active in Democratic politics with a full floor of a West Side brownstone paying $60 a month; and a university professor with two rent stabilized apartments who sublets one for a net gain of $300 a month. There are eight rent stabilized apartments in the posh Plaza Hotel in midtown Manhattan. Even Mayor Edward I. Koch pays $352.60 a month for a rent controlled apartment worth $1,200 a month on the open market, even though he lives in a riverfront mansion provided by the city and made approximately three-quarters of a million dollars in the past two years from his best-selling memoirs--on top of his $110,000 a year salary.
These examples have a Reagan-like, "welfare-Cadillac-queen' feel to them. But they are not isolated cases. Anyone who has lived in Manhattan knows several other people with similar "great deals.' And the evidence of inequity goes beyond anecdote. Tenants in rent regulated apartments are much wealthier than the average city renter, according to both a 1984 city-sponsored study and a 1985 Arthur D. Little study commissioned by city landlords. The average upperincome household in Manhattan, with an annual income of $40,000, pays $522 per month in rent or 15.5 percent (far below the national average of 30 percent), the Arthur Little study reported. Meanwhile, households in the lowest income groups pay more than 60 percent of their income for rent, largely because they don't get the good rent control deals. "It appears that there is little in the financial structure of New York City's private housing that protects the poorest households from paying very burdensome proportions of their income for rent,' the study concluded. "On the other hand the [rent control] structure seems to provide quite liberal housing cost benefits to the better-off households.'
In short, rent control is a government program that helps the rich. Okay, there are plenty of government programs that help the rich en route to helping the poor. A standard argument in defense of Social Security is that although it benefits the rich, it at least provides a cushion to the poor. And certainly there are hundreds of little old ladies living on a margin who would be thrown on the streets but for the rent regulations. But even that argument--as questionable as it is in the case of Social Security, given the tremendous waste--cannot be applied to rent controls because the system freezes out thousands of needy. Only a small percentage of tenants in rent regulated housing live near or below the poverty line. Most of the poor live in public housing (half a million) or in areas so run down that rent controls are irrelevant. For that reason The Amsterdam News, New York City's leading black paper, opposes rent control. A 1976 editorial entitled "End Rent Control' argued that rent control had not "moved minority groups toward better and less expensive housing.'
Rent control locks out the needy by locking out newcomers. The only people who benefit from it are those who have managed to get a lease and then never move again. But it's the poor who lose their leases most frequently. The 1981 Housing and Vacancy Survey of New York showed that those searching for rent stabilized apartments have lower incomes than those already in them.
A recent arrival to Manahattan might visit a friend who lives in one of these dream apartments and wonder how he might come upon one. But a quick check of "for rent' ads shows a few new apartments at astronomical prices--$1,500-plus monthly for a one-bedroom hutch in an average Manhattan neighborhood--and not much else. The newcomer will then be initiated into the local caste system. His friend will explain that the various laws and regulations create different classes of renters, and only a certain class of renters is eligible for the rent control program.
There is a "means test' for rent control: inheritance, longevity, determination, wiliness, connections, or bribery. An advertisement in a recent issue of New York magazine showed one strategy for landing a rent controlled apartment: huge finder's fees. In this case, the ad offered a $20,000 bounty for a primary lease (read lifetime) on a two-bedroom, rent regulated apartment. In many cases, rent stabilized apartments become a family heirloom, handed down from relative to relative. Or, a landlord might just give the apartment to a family friend or to someone he owes a favor. A few years ago, one highly paid editor of The New York Times was given a rent stabilized apartment on Park Avenue at a savings of some $12,000 a year over market rents by Rudin Brothers, one of the biggest and most politically connected landlords in the city. One young attorney won the right to pay $900 a month for a one-bedroom apartment on the West side only after her father, a stock broker with connections to the building management company, came up with a $10,000 bribe. "That's the way it's done,' she said.
Stop making sense
Once tenants get their coveted rent controlled apartments, they rarely give them up, even when their kids move out or when they buy a house in the suburbs. If the tenants do need to move on there are other ways of evading housing laws to keep "title' and make profits. Metropolitan Life, which owns Stuyvesant Town and Peter Cooper Village, two middle-class Manhattan developments, estimates that 40 percent of its tenants are illegally subletting. Many of the primary tenants, the management found, permanently moved to Florida or upstate New York years ago, keeping their apartments as a tax-free retirement investment that yield $200 per month. Often people will buy a condominium and rent out their apartment to pay for the purchase.
It's not hard to see how rent controls limit apartment turnover, which in New York is less than one-third the national average. Apartment hunting in New York is famous for being nasty, brutish, and long. Small wonder that once they get a lease, New Yorkers almost never let it go. With little new rental construction in the city, rent control helps explain the 2 percent vacancy rate. Even if the number of housing units remained constant, rent regulations would make it difficult for apartment have-nots to become haves. Unfortunately, since 1951 New York City has lost more than 500,000 rental units--about half the current stock of private regulated rentals. Two thousand apartments are demolished or turned into cooperatives every month. The borough of the Bronx has lost 30 percent of its apartments in the past 43 years. New York had the greatest population gain of any city in the nation last year. With a limited number of apartments on the market, rent regulations surely bid up their price.
Although liberals are quick to dismiss conservative arguments that rent control is at fault for much of the rental housing shortage, the system has surely contributed to it. Sam Lefrak, the country's largest landlord with over 50,000 moderately priced apartments in New York City, recently shifted most of his activity across the Hudson River to New Jersey, where he is investing $2 billion to create 40,000 middle-income apartments. "I went to the politicians in Jersey City and told them I couldn't live with rent controls. They passed a law that I would be free of rent controls forever. That's why I went across the river. Nobody can build in New York City. You will get hotels and office towers. But no rental apartments.' Surely part of the reason 71,000 condominiums have been created in New York City in the last decade is that rent control has frustrated the Sam Lefraks.
But if a developer's public pronouncements aren't convincing, then listen to what the investors say to each other. In a 1981 issue of Mortgage Banker Magazine--hardly a forum for public propaganda--Michael Blum, a vice president of General Electric Credit, summed up the opinion of a panel of investment bankers by stating, "We won't finance any new construction in an area with rent control. It doesn't make sense.'
With evidence like this, conservatives are quick to argue that rent control is the demon behind all housing problems, but they overstate the argument. All of New York City's housing problems cannot be blamed on rent control. There are other reasons why developers are more interested in building luxury apartments and condominiums. They are, for example, more profitable enterprises. Factors such as white flight, bad urban planning that ruined neighborhoods, cutbacks in government subsidies for low and moderate income tenant housing, rapid increases in the cost of construction, and a general widening in income gaps go a long way toward explaining the housing shortage.
Still, liberals refuse to recognize that rent controls play a role in warping the housing market. Is it really that difficult to believe that developers would be less likely to build a new moderate-income apartment building if they knew the levels of rent they charged would be unpredictable and out of their hands? Developers who built apartments after the war thinking they would be decontrolled, had the rug pulled out from under them in 1969, when New York City stabilized all apartments retroactively. That's not the kind of behavior that's likely to bring builders around to do business again.
Moreover, while rents for stabilized and controlled apartments have increased significantly in recent years, they have not increased as much as the cost of maintenance and operations. So it makes sense to assume that rent controls contribute to housing deterioration. Nine percent of New York's housing stock is dilapidated, compared to a 3 percent average nationwide.
Trends such as these led Gunnar Myrdal, Nobel Prize-winning economist and the architect of Sweden's welfare state, to write that rent control "has constituted the worst example of poor planning by government lacking courage and vision.'
People don't usually think of rent control as a government subsidy program because, while there are clearly some winners, it's not evident who is paying for their good fortune. The losers are those who cannot get a rent regulated apartment and must pay artificially high market rates, in the $1,000-per-month range and higher. If only 30 out of every 100 apartments have unrestricted rents, clearly those rents will be higher than if all 100 are unrestricted. In that sense those without rent stabilized apartments are subsidizing those with--including the wealthy. The cost to the taxpayers of rent subsidy for those in rent controlled apartments amounts to hundreds of millions of dollars. That's how much additional tax revenue the city would collect if rent controls did not exist.
New math
Are landlords being hurt by these regulations? Some are, but most find ways of surviving. For example, some brutalize and harass tenants into leaving their buildings so they can convert them into cooperatives or condominiums. Specialists in tenant harrassment have become New York's entrepreneurs. Take the case of 332-334 West 19th Street, where the owners a few years ago hired a management company to empty out the building. They smashed doors, beat tenants, and helped prostitutes and junkies move into empty apartments. Others let service and maintenance deteriorate to bolster their profit margin. In short, landlords make profits not by providing better services but by decreasing services; not by protecting their property but by destroying it (or standing by idly while tenants destroy it); not by building more apartments but by demolishing them; not by building trust in tenants but by kicking them out on the street.
With the level of inequity that is present in this system, the tax losses it creates for the city, and the probability that it contributes to housing shortages, why does rent control still exist? Because the debate over rent control is really not a matter of political philosophy over the role of government; it is a matter of mathematics. A simple majority of tenants in New York are in rent regulated apartments and don't want to give them up. The city is paying the price.
In fact, a culture of rent control has developed that rationalizes the preservation of these "good deals.' It relies on the age-old hatred of the landlord. In smaller towns, people know their landlords and building owners, who are often people of modest incomes and respectable reputations who bought into a building as an investment. But in New York, landlords are seen as no better than muggers in business suits. Rent control seems to be depriving landlords of something they want, so it must be good (even when the landlord is a small investor or local church). It is a badge of honor to be a rent-controlled tenant. Mayor Koch seems to keep his apartment as a gesture to show he is just plain folks after all. His apartment is just a latter-day log cabin, a la Abe Lincoln. "I happen to think that if I do have a bargain . . . I'm not giving it up,' says Koch. "Nor do I intend to return there for seven days every week until at least four to eight years from now. I don't know who people resent it. Maybe you pay more rent and don't like the fact that somebody else pays less.'
As damaging as rent controls are to New York City, they are among the most politically secure laws around. By now, two generations of New Yorkers have grown up under controls. "Politically it's an impossible issue, not one the voters can understand, even though controls are an anachronism,' says David Garth, the political consultant who has managed campaigns for Mayor Koch and former Governor Hugh Carey. "It's a standard of living that we are used to. Like we have the Mets and the Jets and the subways.' Facing an interest group so huge, Democratic and Republican politicians universally have adopted a covenant of silence about the destructive aspects of rent controls. For a New York City politician to question the fairness or efficiency of rent regulations would be to give up all hope of a future in electoral politics. Privately, many of them admit the system is hopelessly flawed, but public debate has been closed. "It is political suicide to bring it up,' said Maureen Connelly, who managed a city council president campaign. The New York Daily News recently reported that a panel created by Governor Mario Cuomo to study rent controls may recommend decontrolling apartments for the very wealthy. But officials involved have agreed to keep the study under wraps--until after the election. A recent New York Times poll found that 62 percent of New Yorkers believe rent controls are necessary to make sure people could afford housing. More than half of those identifying themselves as conservatives or Republicans agreed.
Losing control
On an individual basis, this makes perfect sense. Why would you volunteer to be priced out of your home, particularly when no one seems to be hurt by your good fortune? Simply abolishing controls, as some conservatives suggest, would force huge, immediate increases and tremendous dislocation for many who aren't wealthy. James Tobin, a liberal, Nobel Prizewinning economist from Yale, noted that there is a consensus in the economics profession that rent controls are "very inefficient. The only difference between liberal and conservative economists is that conservatives would like to do away with them without putting anything in their place. Liberal economists would like to come up with something more efficient.'
What should be done? Communities contemplating rent controls to address housing affordability problems should concentrate on income subsidies rather than rent controls. In cases where rapid rent escalations and price gouging make rent controls necessary, they should be imposed temporarily and the rich should be excluded.
Cities in which rent controls already are entrenched have a much more difficult problem. Removing controls altogether would create pandemonium that would make the current system seem rational and fair. New York should phase out controls gradually, in a way that spares current tenants unaffordable rent hikes and harassment. Most important, government must commit itself to a massive program to increase construction of low- and middle-income housing. Depreciation for office buildings has led to so much construction that there is now an office vacancy rate of as much as 20 percent in many major cities. If government could create such a massive office building glut with generous tax writeoffs, then surely it could do the same for moderate income housing, which is, after all, more important. If liberals expended as much creative energy to find ways to construct new housing as they have defending a clearly inequitable system of rent controls, New York would undoubtedly be able to ease its housing shortage.
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Response by West81st
about 18 years ago
Posts: 5564
Member since: Jan 2008
Opponents of rent regulation won the war - at least with regard to prime Manhattan apartments - back in the 90s, when the threshold for luxury decontrol was lowered and not indexed. Joe Bruno couldn't kill rent regulation quickly, so he had to settle for killing it slowly. The argument has really been over for ten years. Are there still people with great deals who don't need them? Sure. And, to borrow another Reagan-era legend, there may be a mother on Welfare driving a Cadillac SUV somewhere. The question is whether these sensational anomalies are economically significant, and whether there's a way to eliminate them without unintended adverse consequences.
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Response by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
you refer to "studies". ("Studies show that people who live in rent regulated apt are weathier than those who live in unregulated apts.") ... would love to see the study that you cite. and if you aren't misinterpreting the results of the study, i'd gladly shut up.---- paul1003
One again Paul you lied you said all I need to do was to show the study and you would "shut up" not whether or not you disagreed with the accuracy of the study.I am not entirely disagreeing with you on whether this study has flaws just like the NY City Housing study you showed.
"Tenants in rent regulated apartments are much wealthier than the average city renter, according to both a 1984 city-sponsored study and a 1985 Arthur D. Little"
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
Proof that rents are falling?
The original posting for a new building in Chelsea, last year "starting from" prices:
new! $3,650 1-Bedroom at Casa: 155 West 21 street (available May 16, 2008) posted 05/06/08.
new! $4,850 2-Bedroom at Casa: 155 West 21 street (available June 1, 2008) posted 05/06/08.
new! $4,550 2-Bedroom at Casa: 155 West 21 street (available July 1, 2008) posted 05/06/08.
stevejhx please provide at least ten examples and then you might have some credibility
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
houser, you are so lame.
I've already published others - I'm done with your nonsense.
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Response by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
Actually stevejhx you just proved rents are going up. Prices have actually increased in this building.
studio last year rented for 2995 now its being offered at 3050
03/05/2007
Listed in StreetEasy with Douglas Elliman at $2,995
You lose I win--Next
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Response by West81st
about 18 years ago
Posts: 5564
Member since: Jan 2008
Houser: That listing was gone over a year ago.
You seem to struggle with the concept of time. Check a calendar. "Now" is not March 2007, and it certainly isn't 1983.
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Response by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
That's exactly my point it rented in 2007 for 2995 now the asking rent in 2008 is 3050
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
Oh, houser, how lame, lame, lame. I live virtually across the street from that building and inquired about renting there when they opened, and those were the prices I was quoted.
Moreover, this is a no-fee building, so why Douglas Elliman had it listed is beyond me. It's not a reliable listing.
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Response by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
oh it's not a reliable listing. I see if it proves you wrong it has to be unreliable how silly of me to think otherwise. Case closes. I'm done.
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Response by Oberon
about 18 years ago
Posts: 77
Member since: Sep 2007
Is houser an alter ego of banned spunky ?
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
Dude, if you don't know about the rental market, agents list apartments that aren't available all the time, do the old switcheroo. Or are you a newbie to the rental market?
That's why nybits.com is more accurate for rental listings - the listings are posted there by the managing agents, who aren't interested in seeing people when there are no apartments available. It did NOT rent for 2996 in 2007 because I called when it opened. Moreover, the managing agent doesn't publish what they rent their units out for.
THEN - apartment buildings have more than one apartment; you have NO PROOF that that listing is for the same apartment, just that a listing is being placed by a rental agent for an apartment not listed with him (since it's a no-fee building) for a similar apartment that may or may not be the same.
Lame, lame, lame.
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Response by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
stevejhx you're a liar..Rents are higher in that building than they were last year. Peddle you lies and phony statistics elsewhere.
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
The original posting for a new building in Chelsea, last year "starting from" prices:
new! $3,650 1-Bedroom at Casa: 155 West 21 street (available May 16, 2008) posted 05/06/08.
new! $4,850 2-Bedroom at Casa: 155 West 21 street (available June 1, 2008) posted 05/06/08.
new! $4,550 2-Bedroom at Casa: 155 West 21 street (available July 1, 2008) posted 05/06/08.
Yes, houser, you're right: $4,550 > $5,475. Unquestionably. I see it. The Gnu Meth.
And a 1985 report on rent stabilization. Very, very commanding evidence. I'm overwhelmed.
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Response by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
studio last year 03/05/2007 rented for 2995 now its being offered at 3050--You lose I win
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
houser - BEGONE.
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Response by houser
about 18 years ago
Posts: 331
Member since: Apr 2008
stevejhx if you begone I promise I will begone as well. Do we have a deal?
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Response by nyc10022
almost 17 years ago
Posts: 9868
Member since: Aug 2008
How about those rent spikes!
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Response by West34
almost 17 years ago
Posts: 1040
Member since: Mar 2009
wow, if there's a pantheon of most stupid, moronic, wrongheaded SE predictions, I think houser gets a front row seat.
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Response by liquidpaper
almost 17 years ago
Posts: 309
Member since: Jan 2009
lol - well done 10022
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Response by johngalt1945
almost 17 years ago
Posts: 98
Member since: Mar 2009
houser is obviously a landlord or other self-interested party who is in delusional denial. Studies shmuddies...i just re-signed my lease for June 1 and my landlord offered me a (modest) reduction on the UES without asking for it. End of story.
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Response by nyc10022
almost 17 years ago
Posts: 9868
Member since: Aug 2008
there really is a treasure trove in those old posts...
just search for terms like "priced out" and "bitter renter".
did a quick google search using terms: census bureau manhattan rent stabilized
what i've learned from some links from the first page of hits:
first link from tenant.net, "the online resource for residential tenants", dated 1997:
http://www.tenant.net/Oversight/RGBbrief/wholives.html
"By comparing rent stabilized and unregulated households, we can see that stabilized tenants have lower annual incomes and occupy apartments with lower rents."
second link from gothamgazette, dated 2003:
"Almost 22 percent of rent-controlled apartments were occupied by tenants who moved in after 1971, most likely utilizing succession rights. That means that nearly 80 percent of rent-controlled tenants have lived in their apartments since 1971 or before. In most cases, those tenants are now aging or elderly. ... Tenants in rent-controlled apartments actually seem worse off than their non-regulated counterparts. Their median income was $20,120 in 2001, less than two-thirds the median of all renter households. This can probably be explained by the advanced age and fixed incomes of such tenants. In fact, rent control incomes have gone up simply because the really old tenants have died off," said McKee. "In 1970 there were 1.1 million. Today you have 60,000, so it's a program that is being phased out."
these are a bit dated, but a bit better than 1985. i cannot attest to how credible these sources are. but both are examples that refute your claim, houser. more importantly, yours was never an INCOME statement anyway; it was a WEALTH statement. not to be picky here, but there's quite a big difference between income and wealth (though obviously correlated).
well, that was a fun 20 mins wasted. thanks, houser. beats watching TV anyway. anyway, since you did take a sec to try to address your #2 claim (as i've numbered them in my prior post), feel free to work out your #1 and #3 claims, as well.
p.s. houser, i really don't have a problem being proven wrong. i have nothing to gain/lose from it. my only point is that you should try to back some things up with evidence. i realize this isn't a phd dissertation for anyone, so it doesn't need to be well documented. so at least try to use some LOGIC in what you're saying. otherwise... ... well, houser, have you ever heard of a news program called "Fox News"?
sorry, forgot to include the second link. it's:
http://www.gothamgazette.com/article/housing/20030312/10/309
and in that same article, they kind of go to refuting your claim #1, as well:
"Almost 22 percent of rent-controlled apartments were occupied by tenants who moved in after 1971, most likely utilizing succession rights. That means that nearly 80 percent of rent-controlled tenants have lived in their apartments since 1971 or before. In most cases, those tenants are now aging or elderly. The data disproves the popular misconception that many of today's tenants under rent-control are lucky beneficiaries of family members' apartments. "The reality is you can't just pass on your rent-controlled apartment to your nephew in Arizona," said McKee. "To have the right of succession, the family member has to actually live there. People who try to manufacture a situation that doesn't exist don't get away with it."
FYI, for people that want to see the original article you posted, i found it on microfiche in the basement of the library -- haha, just kidding. here it is:
http://query.nytimes.com/gst/fullpage.html?res=9802E0DC153BF931A25756C0A963948260
here's the mother-lode of all links that i think disputes your 1985 article (i think), from the 2005 US census:
http://www.census.gov/hhes/www/housing/nychvs/2005/s1at9.html
now, one has to be careful since there's probably some important caveats in the footnotes to these tables, but at first glance, it looks like when you look at mean/median income for rent controlled and rent stabilized, it is lower than that for "all other renter housing" (which i assume means unregulated).
but again, this is INCOME, not WEALTH.
AHH! didn't read west81st's post. he/she makes a very good point and obviously makes the distinction between wealth and income. west81st, thanks for your input. i honestly hadn't thought of it that way, and think it's a good analysis. not sure if it's TRUE per se (and i don't think you would stick your neck out to say that it was!), but certainly possible, given the way you've laid it out.
houser, you see how easy that was? just a dash of proper thinking, a sprinkle of logic, makes for a good recipe. you must be starving, dude.
Houser has been properly spanked, as he well deserves. Now he deserves to be ignored.
paul1003 I beleive and I'm sure you do as well that that survey is not entirely accurate and has some major flaws. In any event I thought you would enjoy the following article.
There's nothing liberal about rent control.
From: Washington Monthly | Date: 6/1/1986 | Author: Eichenwald, Kurt; Fleetwood, Blake
Washington Monthly
THERE'S NOTHING LIBERAL ABOUT RENT CONTROL
A single 38-year-old correspondent for ABC News is participating in an interesting program in New York City. Despite his salary of $70,000, he qualified for a roughly $1,000 discount in rent for his one-bedroom Manhattan apartment. He pays $560 a month. His secretary isn't quite so fortunate; she's not in the program. Although she makes less than a third of his income, she is paying $1,000 per month for an apartment half the size.
If the program were welfare, we'd call the lucky man a cheat; if he were a defense contractor, we'd say he is gouging the taxpayer. But the correspondent is a long-time New Yorker, so we'll just call him typical.
The program he has benefited from for the past ten years is rent control, and few New Yorkers are demanding an end to the inequity. Set up as a temporary curb against rapid wartime rent increases, controls have remained long after they were supposed to expire. Over the years, politicians have expanded the controls through a complex web of rules, governing rents for 1.2 million apartments, and more than half of the city's tenants.
Faced with a housing crunch, nine states, along with such major cities as Boston, Los Angeles, San Francisco and Washington, D.C., have instituted rent controls. As a result, 12 percent of the nation's housing is now covered by some form of control.
Liberal politicians and organizers tend to view rent control as the most effective way to combat abusive rent hikes by unscrupulous landlords and to guarantee cheaper housing for the poor. But rent control's track record in New York should make them think twice, not out of some abstract affection for the invisible hand, but because in practice rent regulations have benefited the well-off at the expense of the urban poor, fundamentally contradicting the principle of equity to which liberals subscribe.
Rent regulation has been inequitable in its application, as the case of the ABC correspondent shows. It has drained hundreds of millions of dollars from city treasuries, is open primarily to those with money and guile, and plays a role in exacerbating the housing shortage. Yet rent control has developed a culture of protective tenants frightened of an unregulated market and politicians who play to their fears, making rent control politically untouchable. It is a classic case of the majority gridlocking the political system for personal gain and in the process hurting the entire community.
As a World War II-era emergency measure, rent controls made perfect sense. New York was jammed with war workers, housing was scarce and housing speculation feverish. Congress enacted rent controls around the country in 1942 and repealed them in 1945. But New York retained its. Only 15 percent of the apartments in the city are now under the original rent control laws; the remainder fell under subsequent regulations. Rent increases are decided by a body called the Rent Guidelines Board, consisting of tenant and landlord representatives appointed by the mayor. Initially, rent regulations applied only to apartments built before 1947, but in 1969, in response to what tenants said were unjustified rent increases and landlords said was political pressure from the wealthy living in the new buildings, the city placed all existing buildings under rent stabilization. The rules governing rent increases are hopelessly complex in application but simple in principle: rent increases are controlled by the state, not the market. It would seem to boil down to a philosophical question of whether the market or the government can best balance equity and efficiency; a classic liberal/conservative split.
The first questions asked by liberals then, should be, are rent controls equitable? Do they help those who need it most? The answer is no. Consider the infamous Mayflower Madam, Sydney Biddle Barrows, who was paying $376.99 monthly on her apartment when her income from her "escort service' was more than a million dollars. Actor Darren McGavin held on to his $218.98 a month rent controlled apartment although he lived most of the time in his Beverly Hills mansion. Alice Mason, the celebrated hostess who brokers more than $100 million in co-ops and houses for the very rich, lives in a rent regulated apartment for a few hundred dollars a month. We found a vice president of an advertising company with a six-figure salary living with his wife in a huge apartment on the fashionable Upper West Side for $600 a month; an elderly woman who is active in Democratic politics with a full floor of a West Side brownstone paying $60 a month; and a university professor with two rent stabilized apartments who sublets one for a net gain of $300 a month. There are eight rent stabilized apartments in the posh Plaza Hotel in midtown Manhattan. Even Mayor Edward I. Koch pays $352.60 a month for a rent controlled apartment worth $1,200 a month on the open market, even though he lives in a riverfront mansion provided by the city and made approximately three-quarters of a million dollars in the past two years from his best-selling memoirs--on top of his $110,000 a year salary.
These examples have a Reagan-like, "welfare-Cadillac-queen' feel to them. But they are not isolated cases. Anyone who has lived in Manhattan knows several other people with similar "great deals.' And the evidence of inequity goes beyond anecdote. Tenants in rent regulated apartments are much wealthier than the average city renter, according to both a 1984 city-sponsored study and a 1985 Arthur D. Little study commissioned by city landlords. The average upperincome household in Manhattan, with an annual income of $40,000, pays $522 per month in rent or 15.5 percent (far below the national average of 30 percent), the Arthur Little study reported. Meanwhile, households in the lowest income groups pay more than 60 percent of their income for rent, largely because they don't get the good rent control deals. "It appears that there is little in the financial structure of New York City's private housing that protects the poorest households from paying very burdensome proportions of their income for rent,' the study concluded. "On the other hand the [rent control] structure seems to provide quite liberal housing cost benefits to the better-off households.'
In short, rent control is a government program that helps the rich. Okay, there are plenty of government programs that help the rich en route to helping the poor. A standard argument in defense of Social Security is that although it benefits the rich, it at least provides a cushion to the poor. And certainly there are hundreds of little old ladies living on a margin who would be thrown on the streets but for the rent regulations. But even that argument--as questionable as it is in the case of Social Security, given the tremendous waste--cannot be applied to rent controls because the system freezes out thousands of needy. Only a small percentage of tenants in rent regulated housing live near or below the poverty line. Most of the poor live in public housing (half a million) or in areas so run down that rent controls are irrelevant. For that reason The Amsterdam News, New York City's leading black paper, opposes rent control. A 1976 editorial entitled "End Rent Control' argued that rent control had not "moved minority groups toward better and less expensive housing.'
Rent control locks out the needy by locking out newcomers. The only people who benefit from it are those who have managed to get a lease and then never move again. But it's the poor who lose their leases most frequently. The 1981 Housing and Vacancy Survey of New York showed that those searching for rent stabilized apartments have lower incomes than those already in them.
A recent arrival to Manahattan might visit a friend who lives in one of these dream apartments and wonder how he might come upon one. But a quick check of "for rent' ads shows a few new apartments at astronomical prices--$1,500-plus monthly for a one-bedroom hutch in an average Manhattan neighborhood--and not much else. The newcomer will then be initiated into the local caste system. His friend will explain that the various laws and regulations create different classes of renters, and only a certain class of renters is eligible for the rent control program.
There is a "means test' for rent control: inheritance, longevity, determination, wiliness, connections, or bribery. An advertisement in a recent issue of New York magazine showed one strategy for landing a rent controlled apartment: huge finder's fees. In this case, the ad offered a $20,000 bounty for a primary lease (read lifetime) on a two-bedroom, rent regulated apartment. In many cases, rent stabilized apartments become a family heirloom, handed down from relative to relative. Or, a landlord might just give the apartment to a family friend or to someone he owes a favor. A few years ago, one highly paid editor of The New York Times was given a rent stabilized apartment on Park Avenue at a savings of some $12,000 a year over market rents by Rudin Brothers, one of the biggest and most politically connected landlords in the city. One young attorney won the right to pay $900 a month for a one-bedroom apartment on the West side only after her father, a stock broker with connections to the building management company, came up with a $10,000 bribe. "That's the way it's done,' she said.
Stop making sense
Once tenants get their coveted rent controlled apartments, they rarely give them up, even when their kids move out or when they buy a house in the suburbs. If the tenants do need to move on there are other ways of evading housing laws to keep "title' and make profits. Metropolitan Life, which owns Stuyvesant Town and Peter Cooper Village, two middle-class Manhattan developments, estimates that 40 percent of its tenants are illegally subletting. Many of the primary tenants, the management found, permanently moved to Florida or upstate New York years ago, keeping their apartments as a tax-free retirement investment that yield $200 per month. Often people will buy a condominium and rent out their apartment to pay for the purchase.
It's not hard to see how rent controls limit apartment turnover, which in New York is less than one-third the national average. Apartment hunting in New York is famous for being nasty, brutish, and long. Small wonder that once they get a lease, New Yorkers almost never let it go. With little new rental construction in the city, rent control helps explain the 2 percent vacancy rate. Even if the number of housing units remained constant, rent regulations would make it difficult for apartment have-nots to become haves. Unfortunately, since 1951 New York City has lost more than 500,000 rental units--about half the current stock of private regulated rentals. Two thousand apartments are demolished or turned into cooperatives every month. The borough of the Bronx has lost 30 percent of its apartments in the past 43 years. New York had the greatest population gain of any city in the nation last year. With a limited number of apartments on the market, rent regulations surely bid up their price.
Although liberals are quick to dismiss conservative arguments that rent control is at fault for much of the rental housing shortage, the system has surely contributed to it. Sam Lefrak, the country's largest landlord with over 50,000 moderately priced apartments in New York City, recently shifted most of his activity across the Hudson River to New Jersey, where he is investing $2 billion to create 40,000 middle-income apartments. "I went to the politicians in Jersey City and told them I couldn't live with rent controls. They passed a law that I would be free of rent controls forever. That's why I went across the river. Nobody can build in New York City. You will get hotels and office towers. But no rental apartments.' Surely part of the reason 71,000 condominiums have been created in New York City in the last decade is that rent control has frustrated the Sam Lefraks.
But if a developer's public pronouncements aren't convincing, then listen to what the investors say to each other. In a 1981 issue of Mortgage Banker Magazine--hardly a forum for public propaganda--Michael Blum, a vice president of General Electric Credit, summed up the opinion of a panel of investment bankers by stating, "We won't finance any new construction in an area with rent control. It doesn't make sense.'
With evidence like this, conservatives are quick to argue that rent control is the demon behind all housing problems, but they overstate the argument. All of New York City's housing problems cannot be blamed on rent control. There are other reasons why developers are more interested in building luxury apartments and condominiums. They are, for example, more profitable enterprises. Factors such as white flight, bad urban planning that ruined neighborhoods, cutbacks in government subsidies for low and moderate income tenant housing, rapid increases in the cost of construction, and a general widening in income gaps go a long way toward explaining the housing shortage.
Still, liberals refuse to recognize that rent controls play a role in warping the housing market. Is it really that difficult to believe that developers would be less likely to build a new moderate-income apartment building if they knew the levels of rent they charged would be unpredictable and out of their hands? Developers who built apartments after the war thinking they would be decontrolled, had the rug pulled out from under them in 1969, when New York City stabilized all apartments retroactively. That's not the kind of behavior that's likely to bring builders around to do business again.
Moreover, while rents for stabilized and controlled apartments have increased significantly in recent years, they have not increased as much as the cost of maintenance and operations. So it makes sense to assume that rent controls contribute to housing deterioration. Nine percent of New York's housing stock is dilapidated, compared to a 3 percent average nationwide.
Trends such as these led Gunnar Myrdal, Nobel Prize-winning economist and the architect of Sweden's welfare state, to write that rent control "has constituted the worst example of poor planning by government lacking courage and vision.'
People don't usually think of rent control as a government subsidy program because, while there are clearly some winners, it's not evident who is paying for their good fortune. The losers are those who cannot get a rent regulated apartment and must pay artificially high market rates, in the $1,000-per-month range and higher. If only 30 out of every 100 apartments have unrestricted rents, clearly those rents will be higher than if all 100 are unrestricted. In that sense those without rent stabilized apartments are subsidizing those with--including the wealthy. The cost to the taxpayers of rent subsidy for those in rent controlled apartments amounts to hundreds of millions of dollars. That's how much additional tax revenue the city would collect if rent controls did not exist.
New math
Are landlords being hurt by these regulations? Some are, but most find ways of surviving. For example, some brutalize and harass tenants into leaving their buildings so they can convert them into cooperatives or condominiums. Specialists in tenant harrassment have become New York's entrepreneurs. Take the case of 332-334 West 19th Street, where the owners a few years ago hired a management company to empty out the building. They smashed doors, beat tenants, and helped prostitutes and junkies move into empty apartments. Others let service and maintenance deteriorate to bolster their profit margin. In short, landlords make profits not by providing better services but by decreasing services; not by protecting their property but by destroying it (or standing by idly while tenants destroy it); not by building more apartments but by demolishing them; not by building trust in tenants but by kicking them out on the street.
With the level of inequity that is present in this system, the tax losses it creates for the city, and the probability that it contributes to housing shortages, why does rent control still exist? Because the debate over rent control is really not a matter of political philosophy over the role of government; it is a matter of mathematics. A simple majority of tenants in New York are in rent regulated apartments and don't want to give them up. The city is paying the price.
In fact, a culture of rent control has developed that rationalizes the preservation of these "good deals.' It relies on the age-old hatred of the landlord. In smaller towns, people know their landlords and building owners, who are often people of modest incomes and respectable reputations who bought into a building as an investment. But in New York, landlords are seen as no better than muggers in business suits. Rent control seems to be depriving landlords of something they want, so it must be good (even when the landlord is a small investor or local church). It is a badge of honor to be a rent-controlled tenant. Mayor Koch seems to keep his apartment as a gesture to show he is just plain folks after all. His apartment is just a latter-day log cabin, a la Abe Lincoln. "I happen to think that if I do have a bargain . . . I'm not giving it up,' says Koch. "Nor do I intend to return there for seven days every week until at least four to eight years from now. I don't know who people resent it. Maybe you pay more rent and don't like the fact that somebody else pays less.'
As damaging as rent controls are to New York City, they are among the most politically secure laws around. By now, two generations of New Yorkers have grown up under controls. "Politically it's an impossible issue, not one the voters can understand, even though controls are an anachronism,' says David Garth, the political consultant who has managed campaigns for Mayor Koch and former Governor Hugh Carey. "It's a standard of living that we are used to. Like we have the Mets and the Jets and the subways.' Facing an interest group so huge, Democratic and Republican politicians universally have adopted a covenant of silence about the destructive aspects of rent controls. For a New York City politician to question the fairness or efficiency of rent regulations would be to give up all hope of a future in electoral politics. Privately, many of them admit the system is hopelessly flawed, but public debate has been closed. "It is political suicide to bring it up,' said Maureen Connelly, who managed a city council president campaign. The New York Daily News recently reported that a panel created by Governor Mario Cuomo to study rent controls may recommend decontrolling apartments for the very wealthy. But officials involved have agreed to keep the study under wraps--until after the election. A recent New York Times poll found that 62 percent of New Yorkers believe rent controls are necessary to make sure people could afford housing. More than half of those identifying themselves as conservatives or Republicans agreed.
Losing control
On an individual basis, this makes perfect sense. Why would you volunteer to be priced out of your home, particularly when no one seems to be hurt by your good fortune? Simply abolishing controls, as some conservatives suggest, would force huge, immediate increases and tremendous dislocation for many who aren't wealthy. James Tobin, a liberal, Nobel Prizewinning economist from Yale, noted that there is a consensus in the economics profession that rent controls are "very inefficient. The only difference between liberal and conservative economists is that conservatives would like to do away with them without putting anything in their place. Liberal economists would like to come up with something more efficient.'
What should be done? Communities contemplating rent controls to address housing affordability problems should concentrate on income subsidies rather than rent controls. In cases where rapid rent escalations and price gouging make rent controls necessary, they should be imposed temporarily and the rich should be excluded.
Cities in which rent controls already are entrenched have a much more difficult problem. Removing controls altogether would create pandemonium that would make the current system seem rational and fair. New York should phase out controls gradually, in a way that spares current tenants unaffordable rent hikes and harassment. Most important, government must commit itself to a massive program to increase construction of low- and middle-income housing. Depreciation for office buildings has led to so much construction that there is now an office vacancy rate of as much as 20 percent in many major cities. If government could create such a massive office building glut with generous tax writeoffs, then surely it could do the same for moderate income housing, which is, after all, more important. If liberals expended as much creative energy to find ways to construct new housing as they have defending a clearly inequitable system of rent controls, New York would undoubtedly be able to ease its housing shortage.
Opponents of rent regulation won the war - at least with regard to prime Manhattan apartments - back in the 90s, when the threshold for luxury decontrol was lowered and not indexed. Joe Bruno couldn't kill rent regulation quickly, so he had to settle for killing it slowly. The argument has really been over for ten years. Are there still people with great deals who don't need them? Sure. And, to borrow another Reagan-era legend, there may be a mother on Welfare driving a Cadillac SUV somewhere. The question is whether these sensational anomalies are economically significant, and whether there's a way to eliminate them without unintended adverse consequences.
you refer to "studies". ("Studies show that people who live in rent regulated apt are weathier than those who live in unregulated apts.") ... would love to see the study that you cite. and if you aren't misinterpreting the results of the study, i'd gladly shut up.---- paul1003
One again Paul you lied you said all I need to do was to show the study and you would "shut up" not whether or not you disagreed with the accuracy of the study.I am not entirely disagreeing with you on whether this study has flaws just like the NY City Housing study you showed.
"Tenants in rent regulated apartments are much wealthier than the average city renter, according to both a 1984 city-sponsored study and a 1985 Arthur D. Little"
Proof that rents are falling?
The original posting for a new building in Chelsea, last year "starting from" prices:
http://www.casa155w21.com/availability.htm
studios $3,050
1-bedrooms $3,685
2-bedrooms 5,475
Current listings:
new! $3,650 1-Bedroom at Casa: 155 West 21 street (available May 16, 2008) posted 05/06/08.
new! $4,850 2-Bedroom at Casa: 155 West 21 street (available June 1, 2008) posted 05/06/08.
new! $4,550 2-Bedroom at Casa: 155 West 21 street (available July 1, 2008) posted 05/06/08.
http://www.nybits.com/apartments/casa_155_west_21.html
stevejhx please provide at least ten examples and then you might have some credibility
houser, you are so lame.
I've already published others - I'm done with your nonsense.
Actually stevejhx you just proved rents are going up. Prices have actually increased in this building.
studio last year rented for 2995 now its being offered at 3050
03/05/2007
Listed in StreetEasy with Douglas Elliman at $2,995
You lose I win--Next
Houser: That listing was gone over a year ago.
You seem to struggle with the concept of time. Check a calendar. "Now" is not March 2007, and it certainly isn't 1983.
That's exactly my point it rented in 2007 for 2995 now the asking rent in 2008 is 3050
Oh, houser, how lame, lame, lame. I live virtually across the street from that building and inquired about renting there when they opened, and those were the prices I was quoted.
Moreover, this is a no-fee building, so why Douglas Elliman had it listed is beyond me. It's not a reliable listing.
oh it's not a reliable listing. I see if it proves you wrong it has to be unreliable how silly of me to think otherwise. Case closes. I'm done.
Is houser an alter ego of banned spunky ?
Dude, if you don't know about the rental market, agents list apartments that aren't available all the time, do the old switcheroo. Or are you a newbie to the rental market?
That's why nybits.com is more accurate for rental listings - the listings are posted there by the managing agents, who aren't interested in seeing people when there are no apartments available. It did NOT rent for 2996 in 2007 because I called when it opened. Moreover, the managing agent doesn't publish what they rent their units out for.
THEN - apartment buildings have more than one apartment; you have NO PROOF that that listing is for the same apartment, just that a listing is being placed by a rental agent for an apartment not listed with him (since it's a no-fee building) for a similar apartment that may or may not be the same.
Lame, lame, lame.
stevejhx you're a liar..Rents are higher in that building than they were last year. Peddle you lies and phony statistics elsewhere.
The original posting for a new building in Chelsea, last year "starting from" prices:
http://www.casa155w21.com/availability.htm
studios $3,050
1-bedrooms $3,685
2-bedrooms $5,475
Current listings:
new! $3,650 1-Bedroom at Casa: 155 West 21 street (available May 16, 2008) posted 05/06/08.
new! $4,850 2-Bedroom at Casa: 155 West 21 street (available June 1, 2008) posted 05/06/08.
new! $4,550 2-Bedroom at Casa: 155 West 21 street (available July 1, 2008) posted 05/06/08.
Yes, houser, you're right: $4,550 > $5,475. Unquestionably. I see it. The Gnu Meth.
And a 1985 report on rent stabilization. Very, very commanding evidence. I'm overwhelmed.
studio last year 03/05/2007 rented for 2995 now its being offered at 3050--You lose I win
houser - BEGONE.
stevejhx if you begone I promise I will begone as well. Do we have a deal?
How about those rent spikes!
wow, if there's a pantheon of most stupid, moronic, wrongheaded SE predictions, I think houser gets a front row seat.
lol - well done 10022
houser is obviously a landlord or other self-interested party who is in delusional denial. Studies shmuddies...i just re-signed my lease for June 1 and my landlord offered me a (modest) reduction on the UES without asking for it. End of story.
there really is a treasure trove in those old posts...
just search for terms like "priced out" and "bitter renter".