CONFESSION (mea culpa)

" one's "

I'm selling an apartment and have been reading street easy for the entertainment value for months. When I read the rent stabilization, control thread, I realized that these people who tout formulas etc., have no basic idea about how New York is run.

I was a public policy person but even if I wasn't I would know the history of stabilization in my city--how the Bronx became what it was--hint: Robert Moses--why it didn't happen in Manhattan--why the Bronx really didn't burn and a zillion other things. To have to Google the most basic facts caused me to lose all respect for most people here

To call stabilization subsidized when new condos are more subsidized--tax abatements--was absurd.

I do think many people in these threads enjoy scaring people. Problem is New York is a strong market that no matter what people say isn't governed by the rules of the rest of the country

Coop boards--god love them--have much stronger rules and are self-policing. To not understand that Manhattan is still the promised land and to compare it to Miami or Vegas is absurd

I'm sure people here will think I'm stupid for what I said and because when I bought my apartment in 97 too many banks offered me mortgages I didn't even apply for. I have a portfolio and could afford to buy a smaller but luxe apartment in a good building for cash. I know I could have made so much in the market--I could have lost it all to the dot com frenzy--something I forced myself to basically stay away by putting that money into my apartment

I have been very blessed in the stock market. My apartment is still my biggest and best investment. Besides giving me a good profit, it gave me shelter, and many great memories. I don't have great memories of my stocks and bonds. I can't decorate them, entertain with them or sleep on them--not directly at least

There is a satisfaction in ownership renting can never equal. But who cares when a formula tells all?

Yes, I can't wait till StreetEasy, the Movie, comes out.

will- If it's ok with you I would like to play the villain.

Gee, DCO, I thought that would be Steve. :-)

OP: "...morons that REALLY REALLY TRULY think .."

That would be "morons WHO really, really truly think...."

your so right. ;)

I just joined and I'm banging my head against the wall trying to figure out if I should sell my 1 BR in Gramercy... To me, there's no better area in all of NYC!!!!!! So beautiful, especially this time of year.

But, the time may be right... If it wasn't a COOP and I could rent it to whoever I wanted I would keep it....

Here's a question - Are there Coop boards that allow you to "Share" and apt.. We work in NYC and live on LI - I know a lot of people who would want to split one with me..

But, at this point with the tax examption I may have to bow out and take the $$$$....

I love the people though that try to scare everyone - THE MARKET IS TANKING... THE MARKET IS SOARING!!!

As if it will have an effect on a few people reading a message board - It happens on the stock boards all the time though... People spend countless hours as if they are effecting the markets...

"Why the Bronx really didn't burn."

Where were you in the 70's?

"To call stabilization subsidized when new condos are more subsidized--tax abatements--was absurd."

Whoa! A permanent multi-year cap on rents irrespective of market conditions is not a "subsidy"?

Whoa!

I know people paying less than $1,000 a month for nice 1-bedroom apartments that would rent for $3,000+ on the open market, who use the difference to buy vacation homes.

It's theft, and it's disgusting.

"Condos are more subsidized" because of tax abatements?

Whoa!

First, not all condos have tax abatements. Second, the benefit of the abatement inures to the developer as an incentive to build and make a greater profit, not to the buyer. Third, it's not theft.

the discussions on streeteasy at one time were imformative and I enjoyed them...NOW...not so much. They are the same boring people who sprout the same views without any backup...the housing market is down,no it's up, etc. These boring people have turned a terrific website into a must not view website. I 'm just hanging on to see the listings.

EXACTLY!!!!

Great lunch entertainment when you can't go out to eat and have to eat at your desk.

Seriously, can't wait for StreetEasy the Movie to come out. LOL.

Pick an actor for...

Spunky = ?
JuiceMan = ?
Stevejhx = ?
etc...

julia- Don't leave the market will get better.

MMAfia, I was thinking the same thing about actors.

MMAfia = James Gandolfini
steve = Dennis Hopper (think the waterworld dennis hopper)
dco = the little kid that saw dead people in the Sixth Sense
poorishlady = Cheech or Chong, pick one
spunky = Zach Braff
iMom = pick one of the desperate housewives actresses
malraux = Michael Douglas (aka. Gordon Gecko)
kylewest = Luke Skywalker
tenemental = Brian from Family Guy

kylewest: The original poster may have some things wrong, but I believe the use of "that" rather than "who" is gramatically correct. The construction "morons, who think..." would suggest that all morons think a particular way. Since the OP seems to be speaking only of specific morons, the construction "morons that think" is probably preferred.

I admit that the phrase "morons that think" features a certain inherent - and probably unintended - irony.

Who plays JuiceMan? Woody Allen?

West81st = Philip Drummond from Different Strokes (living in a rent stabilized penthouse)

steve, much younger and good looking.

... "(living in a rent stabilized penthouse)" LOL!!!

Steve--you're a smart guy, you must know the difference between a regulation and a subsidy, right?

JuiceMan, I'm not in the movie?
I think dco should be one of those conflicted villains that turns good at the end, like Darth Vader.

I have to agree with OP rgarding the subject matter shift, however the change in tone has caused me to be less interested, not more in the streeteasy boards. Every conversation, whether it is "how do I put in a new bathroom" to "good real estate lawyers" quickly degenerates into "you have to be crazy to buy/not buy" because the same people hijack the discussion.

This story has gone from a romance to a horror movie . . . :)

No offense LICC, you haven't been around as long as some of the others, so I don't have a handle on your personality. dco is more of a sky is falling, little kid type. I think he probably does see dead people.

What about urbandigs?

Actually MMAFia should be played by Walter Houston. He's the old guy in The Treasure of the Sierra Madre

http://www.imdb.com/media/rm429496320/nm0404158

JuiceMan - younger and better looking? Not to mention more modest?

Maybe a Baldwin? Stephen?

jordyn: "Steve--you're a smart guy, you must know the difference between a regulation and a subsidy, right?"

How, pray tell, are subsidies implemented except through law and regulation?

Then, what is the difference between giving someone money directly to pay rent, or artificially holding down rent at another's expense?

None that I can see.

Moreover, the tax abatements are not a direct grant of money - the technical definition of a "subsidy" - but rather the granting of a right not to pay money. If Goldman Sachs is given a property tax break on its new building - which it was - is that not a subsidy?

JM- Don't forgert that in the movie the people that were helping him were actually dead. That says's a lot about you guys. Perhaps JM I'm to a dead man? HAHA.

LICComment- There is always a chance of turning good. Of course I wouldn't count on it unless the data changes but there is always hope.

A Baldwin? lol. Not quite but closer than Woody Allen.

Kathy Bates or Frances Conroy as Poorishlady? Or maybe Lily Tomlin?

Steve - a tax break is an incentive, not a subsidy. A subsidy is a financial grant to give aid or assistance. Goldman didn't receive cash, they received a break on taxes they otherwise would have had to pay in order to incentize them to build and keep jobs in NY. Without the tax break, they could have just left NY and the city wouldn't have gotten any tax revenue payments from them at all. This is completely different from rent stabilization, which is an artificial government restriction on rent levels. In that case, the government is not giving breaks or subsidizing, but it is restricting and interfering in the free market.

Steve--I don't know if you're legitimately confused, or just being argumentative. Talking only about real estate for the moment, a regulation is something that limits how you can use your property whereas a subsidy is something that reduces the cost of your property. Zoning restrictions are another good example of a regulation.

There's no real difference between a direct subsidy payment and a tax abatement, other than how they're timed. The net inflow/outflow of cash is identical to both the government and the subsidized party in either case.

In practical terms, the difference between a rent regulation and a rent subsidy is that in the case of the regulation, the tenant benefits at the expense of the landlord whereas in the case of a subsidy the tenant benefits at the expense of the taxpayers as a whole.

I'm pretty unsympathetic to the notion that the regulation is "theft", though. In almost all cases, the landlord knew about the regulations when they bought the property. Do you think easements constitute theft as well?

"Steve--I don't know if you're legitimately confused, or just being argumentative"

jordyn, you must ALWAYS assume that steve is both.

JuiceMan: "tenemental = Brian from Family Guy"

I was almost insulted, thinking Brian was the stoner kid. But the dog with the martini and the wry sense of humor? Now you're talking!

LICComment, the effect of a subsidy and a tax break are the same and, in fact, tax breaks are often called subsidies. Any time you are given preferential treatment, it skews the market.

Now, if you have a housing voucher that covers the full market price of your property, you are being directly subsidized by the government, and the market is being skewed because demand is increasing. If your rents are regulated you are being indirectly subsidized because you are not paying market prices. Therefore, supply is reduced. They're just two sides of the same coin.

Let us go to the Encyclopedia Brittanica's student version - intended for middle-schoolers - for the definition of an "indirect subsidy": "These are the most widespread, if less visible, forms of assistance provided to private enterprise and other institutions. Indirect subsidies may take such forms as favorable tax policies, loans, import quotas, and price supports."

Just because those of you who take advantage of arbitrarily low regulated rents - which have the perverse effect of increasing everyone else's rents because there is less supply available at market rates - cannot admit to the immorality of your actions - stealing from your landlord - that's not my problem.

It's a perverse system that undermines market forces, leads to a diminished quality of housing - do you think all those tenements would still be around if the tenants weren't unevictable? - and far higher prices from those who step up and buy only what we can afford.

jordyn, please! "a regulation is something that limits how you can use your property whereas a subsidy is something that reduces the cost of your property. Zoning restrictions are another good example of a regulation."

Rent regulation whose purpose is to provide an indirect subsidy - "affordable" housing - to someone who can't afford the market price. Subsidies are instituted through laws or regulations; there is no other way to do it. Granted, laws and regulations have other purposes, but one of them is to subsidize.

"In practical terms, the difference between a rent regulation and a rent subsidy is that in the case of the regulation, the tenant benefits at the expense of the landlord whereas in the case of a subsidy the tenant benefits at the expense of the taxpayers as a whole."

Wrong. A rent subsidy is implemented through a law or regulation, and it is a direct cash grant. The landlord is not harmed, but all market-rate renters are harmed because it artificially increases demand, causing prices to rise.

What God-given right does anyone have to live in Manhattan? The same God-given right they have to fly first class: None. If you can't afford someplace, then move where you can afford it. That's what market mechanisms are SUPPOSED to do.

Then, rent regulation artificially limits rents for an entire class of renters - about 60% of all of Manhattan. If you can afford your apartment but your rent is regulated, you ARE stealing from your landlord, just like the rent-regulated tenants I know who have second homes in the mountains or on the beach. That is a direct THEFT from the landlord, who could otherwise charge more.

If you can't afford your rent and need regulation to stay where you are, then you are stealing a) from your landlord; b) from society in general, and c) from all other non-regulated renters, who see their market rates rise because of a shortage in supply.

"I'm pretty unsympathetic to the notion that the regulation is "theft", though. In almost all cases, the landlord knew about the regulations when they bought the property. Do you think easements constitute theft as well?"

Easements do not constitute theft - they are necessary. Eminent domain, however, can constitute theft if used to benefit a private party (though the Supreme Court disagrees with me on that). The different between eminent domain (full seizure) and rent regulation (partial seizure) is only one of degrees: you're stealing from one private party to benefit another.

Stevejhx: You may have missed jordyn's key point.

Most landlords with regulated tenants bought their buildings at prices (i.e. discounts) that reflected:
a) The rent roll at the time of acquisition;
b) The restrictions on rent roll growth imposed by regulation of specific units;
c) The market's assessment of how long it might take - and how much it might cost - to deregulate the regulated units, including the possibility that New York might scrap regulation altogether.

Buying regulated apartments is a gamble. Sometimes it works out, sometimes it doesn't. I agree with you that nobody has any particular "right" to continue living on another person's property, other than the rights conveyed by contract and/or by law (the latter, of course, being subject to legislative whim. By the same token, if somebody buys an encumbered asset, he has no particular right to have the encumbrance removed, other than by contract or through the process prescribed by law.

I've been on both sides of this battle, and I can assure you, there is no moral superiority on either side.

Steve--It's hard to know where to start with your tirade. I'll just make a few quick points:

1) You seem to be hell-bent on trying to make words as meaningless as possible. It's useful to be able to distinguish between restrictions on use (which I'm calling regulations) and government-funded housing assistance (which I'm calling a subsidy). It's fine for you to make your libertarian point that these all distort the market, but there's meaningful differences between the two concepts and trying to twist words so there's no way to talk about them as distinct concepts does not help useful dialogue.

2) If easements don't constitute theft, AND the landlord knows about rent regulations at the time a property is purchased, what's the difference? In both cases, the owner's ability to use his/her properties as desired is constrained, and this would decrease the value of the property. But if the owner knows about the restriction at the time they buy the property, the market should already have priced the "theft" of the landlords' future profits into the sales price, no? I agree that there's a distortion of the free market, but you can't say anyone is stealing from the landlord if the landlord entered the arrangement knowing how the rules worked.

Do you think that rent stabilization applied to tax abated apartments is theft?

This would be a different discussion if we were talking about instituting new rent restrictions. I agree that would feel a lot more like theft.

I can't believe I am saying this, but I actually wholeheartedly agree with steve. Despite his longwinded answer, his basic premise has been proven correct. Subsidized control of a (relatively) limited asset helps few, hurts many, and creates an imbalanced system which begs to be exploited.

Just ask my RE lawyer who hides most of his income so that he can maintain his 2000 sft rent controlled apartment on the UWS while keeping a vacation house in the Bershires!

excuse me, people. this thread was explicitly started to be a total waste of time. stevejhx, hjx, xjh (or whatever your name is), west81st, jordyn, stop trying to talk about things "of substance" here please! let me steer it back to the right directions:

steve, you're a bitch.
west81st, my daddy is bigger than your daddy.
jordyn, bite me.

p.s. west81, thanks for the grammar lesson on the (mis)use of the word "that". i actually have my strunk&white and chicago manual of style right here in my office, and for the life of me, i still can't seem to quite get my arms around its proper use. ... you see how i fit in with all the other idiots here? i have my problems, but can't seem to fix them, and would rather concentrate on other people's issues. thanks.

its you're fault, knot mine.

p.s. how come i don't get an actor assigned to me? someone please make it especially insulting.

"Just ask my RE lawyer who hides most of his income so that he can maintain his 2000 sft rent controlled apartment on the UWS while keeping a vacation house in the Bershires!"

it seems to me that if (a) the (realized) gains are high, (b) the (expected) costs are low, (c) doing so is morally ambiguous, and (d) if you don't do it, someone else will........... well then rich people exploiting the RC/RS system is an equilibrium solution; i.e., well, no duh.

Steve - I somewhat agree with you that some of the effects of subsidies and tax breaks are the same. But subsidies, tax breaks and rent regulations do have meaningful differences and effects as well, particularly on goverment budgets and economic conditions. I also agree with you on the detrimental affects of rent regulations and think that NY should abolish all of its rent controls and stabilizations.
Paul - William Shatner can play you, in a Denny Crane kind of way.

dammit i had to google denny craig. i don't watch boston legal, so i have no idea what sorta character he plays. can i just pretend that i'm like the shatner of priceline.com fame?

And we'll have a delectable cameo to cast, where a well-known personage will walk on screen and say, simply: "nugit."

For those of you that are opposed to rent restrictions. How do you feel about guarantors on rental properties? A lot of the same principles here....

paul, I don't know you well enough to accurately choose an actor, but perhaps Conan O'Brien - not really an actor, but close - since he wrote for The Simpsons, which is almost as absurd as this website.

W81, I know that you're stabilized so you probably don't want to think about the effect you're having on everyone else in the real-estate market. If you're in a rent-stabilized market you're stealing if:

1) You can afford and have other properties: I know someone in a Classic 6 on West End Avenue with an apartment in South Beach and a house on Fire Island, who with his roommate pay $700 rent. THAT IS THEFT. It's theft from the landlord because he's receiving a benefit he doesn't need, and it's theft from other renters because it raises their rents, and it's theft from other buyers because the rest of that building is a co-op, and not only is he reducing the housing stock, but he's being subsidized by the landlord since the rent doesn't pay the maintenance.

I know lots of people in this situation.

2) If you can't afford to live where you live, then you're not stealing from a landlord who knew the building was stabilized, but it IS theft from society. No one has a right to anything they can't afford, not housing, not first-class flights. If you can't afford Manhattan, move to Maspeth or Mississippi. But don't keep an apartment that I work hard to be able to afford that you can't - regardless of how hard you work - and tell me that there is equity in that, especially if your occupying something you can't afford makes me have to pay even more for something I should be paying less for.

Or perhaps you would agree that people need cars, so the government should give everybody a car. Or if not a car, how about free public transportation, since we do need to go hither and yon on a daily basis. Or food? Or water? Why not these things that we all need?

I'm not saying that there shouldn't be a social safety net - there MUST be. But middle-class subsidies drive me crazy, people who's attitude is that they deserve "affordable housing" wherever they choose to live: why not Beverly Hills, too? If you can't afford Manhattan, move to the Bronx.

3)By being unevictable, you're stealing from the city and its quality of life, by making it nearly impossible to get rid of tasteless (and dangerous) 1880's tenements and replacing them with better, modern housing. Not to mention how much more expensive it makes all housing built after 1971.

jordyn, easements aren't theft because they're rights-of-way. Nobody's property is stolen; access is simply granted to it for a greater public good. If there were no easements there would be no electricity, no water, no infrastructure in general. Eminent domain to build a road is not theft; eminent domain to build luxury housing is; eminent domain to expand a private university (Columbia) is borderline.

"you can't say anyone is stealing from the landlord if the landlord entered the arrangement knowing how the rules worked" - answered above.

"Do you think that rent stabilization applied to tax abated apartments is theft?" I don't understand the question. Do you mean a building granted preferential tax status because there is a set-aside for "affordable housing"? If so, yes - it increases the taxes on all other non-abated, non-subsidized properties.

The market should be allowed to work its magic, with reasonable regulatory provisions against, for instance, "unconscionable rent increases," constructive eviction, etc.

Steve, I was going to suggest Andrew Sullivan to play you, but then remembered he was not an actor, either. Well, not really.

Way too HIV-positive for me. I made it through the 80s, 90s, 00s, no need for that now.

But since nobody's had a rebuttal to my argument, I guess I won! :)

When did rent regulations go from social policy to benefit the lower and middle classes, from providing stability into otherwise bad neighborhoods, and from its ability to remove capricious and potentially damaging market effects from the lives of ordinary NYers, to being considered stealing by some here?

What do you call a rent control tenant who is an 80+ or 90+ year old individual or couple on a fixed income who are retired as civil service workers, or may be veterans, living in the Bronx, or upper Manhattan, or Queens or Brooklyn or Yonkers or in other non-prime areas that many on this board might not want to live at any price? A thief?

Why do I care if they are "on a fixed income who are retired as civil service workers, or may be veterans, living in the Bronx, or upper Manhattan, or Queens or Brooklyn or Yonkers or in other non-prime areas that many on this board might not want to live at any price?"

What sort of income am I on, if not a fixed one? Does it matter that I work in the private sector and have to pay for my own health insurance, life insurance, both sides of social security, will have to work till I'm 80 (my mother is 72 and still working), while many civil service workers get to retire with half salary after 20 years, and then get defined benefit retirement plans? Or if they're veterans and get free health care for life?

And what if they're not in a "non-prime area," like Greenwich Village, occupying an apartment that someone on this board might be interested in buying? Or what if they're occupying an apartment in a "non-prime" area and therefore make it impossible to improve the housing stock, because they are unevictable? And what if they are "an 80+ or 90+ year old individual or couple" who decide they need extra space so they want a first-class airline ticket at coach prices, because "they can't afford it"?

It's BS. Live where you can afford; you want to afford more, get a better job, get a better education. You're about to retire? Start in you're 20's like I did to make sure you can afford retirement at the level you want.

Rent regulation is theft: from landlords, from potential buyers or renters, and from society.

steve, you may be the only republican gay man I know. Let me guess, fiscally conservative and socially liberal?

Steve, you wrote ["Do you think that rent stabilization applied to tax abated apartments is theft?" I don't understand the question. Do you mean a building granted preferential tax status because there is a set-aside for "affordable housing"? If so, yes - it increases the taxes on all other non-abated, non-subsidized properties.]

Let's ignore the "affordable housing" provisions and talk about units outside the exclusion zone. Let's say a developer just built a rental building in Battery Park City or Harlem, they got a tax abatement and as a result they offer rent-stabilized leases to their tenants. Are the tenants stealing from their landlord?

It's a bit strange that you recognize the social benefits of a concept like easements, but refuse to acknowledge that society has any right to use regulations to try and generate any other social benefits, like allowing stable populations and communities to develop. Actually, it's pretty clear you just don't agree with the goal of providing affordable housing, and therefore any steps taken to achieve it constitute "theft" whereas if you do like the goal, the necessary legal structures are serving a "greater public good".

As for why society might want people to be able to live places where they otherwise can't afford, do you think that there's no benefit in having low-paid but still reasonably highly trained professions like teachers being able to live in otherwise expensive communities? Personally, I'm glad that some people who have the smarts to be lawyers or stockbrokers forgo the opportunity for riches to try and teach instead and I'd rather that some of them actually be able to live in the areas where they teach. I'm not at all convinced that the current approach to rent regulation actually achieves its goals, but if it did some degree of market distortion would be a reasonable price to pay.

jordyn - you are recycling arguments that are deeply flawed. In a free society, we should not have government controlling and manipulating the housing market in this way. The best way to ensure affordable housing is through proper zoning, city planning and regulation against fraud and discrimination. Provide an environment that allows the free market to work. Private parties will develop housing where there is demand, including demand for affordable housing. If you want the government to control who can live where, and at what price, there are still some communist countries around where you can move.
Your argument that NYC needs rent regulations to ensure low-paid professionals are able to live here is similarly flawed. There are plenty of good areas in NYC and the NYC area affordable to teachers and others in their salary range. Sure, maybe they can't afford 5th Avenue in the UES, but NYC is a big place and there are lots of good neighborhoods that are affordable. This idea that people should be entitled to live wherever they want in NYC is obnoxious.

JuiceMan, I'm no Republican - I'm a free-market Democrat who believes in personal responsibility. More a libertarian, and I have many friends who agree with me.

jordyn, what is "affordable housing," and affordable to whom? Everywhere in the country where they have eliminated rent regulations, rents have dropped in the medium- to long-term. There is no rent regulation in Miami, I don't see bands of people being evicted and wandering the streets. There is no rent regulation in Chicago: ditto.

If they get rid of rent regulations then there will be plenty of affordable housing because they'll have to be: what developer would build a building that he can't rent out because he's asking too much rent?

Not one.

What will happen, however, is that some populations will be displaced and others will move in. I don't believe "gentrification" is a 4-letter word, however, just like I don't think that it's the government's business to regulate airline tariffs.

I, too, think it's fine to teach or whatever. If I were still at Price Waterhouse I'd be a lot wealthier than I am today. I made a choice, I live by that choice. But if you think that teachers, for instance, are underpaid, do the math again: they're WAY overpaid. First, they have no accountability; second for some ungodly reason they get "tenure" when they're not publishing. Then they have a defined benefit retirement plan. Then they have free health insurance for life. Then they make about $90,000 a year and only work 8 months out of the year. Then they get to retire after 20 years. Amortize that over the average joe's 40-year career and you'll see it's a vast amount of money.

Need I go on? Do I think that there should be special rules for teachers? Not any more than I think there should be special rules for me.

Every and all cases of RS/RC I know are fraudulent. And the beneficiaries have the nerve to DEMONSTRATE for their right to fraud. Their argument: we've never paid fair price, how dare you to suggest we start now.
Who's playing me?

This argument is now officially boring. Some people think the invisible hand of the market will solve all ills and that any attempt to distort the market (except for ones they like, such as zoning) is "communism". Other people think that social benefits accrue from allowing people some degree of stability in their housing as well as in allowing a broader segment of society to live in the core of the city, and are willing to tolerate a less-than-free market to accomplish this.

I don't think anyone's going to convince anyone else to change these fundamental beliefs on StreetEasy, nor do I think it's the proper forum. Simply dismissing other people's viewpoints as "deeply flawed" without providing any data to substantiate your views seems awfully easy, though.

And research the history of rent regulation: it is a vestige of WWII wage and price controls that were lifted for just about everything else. It's the same as job-dependent health insurance: companies weren't allowed to raise wages during WWII so they increased benefits instead, and health insurance was one of the benefits they gave.

See how well that's worked?

It's the same thing with the "legacy" airlines: they suffer from the aftermath of regulations lifted (correctly) by Ronald Reagan, before which they never had to compete for anything since the prices were fixed, overpaid their staff and instead competed on "fringe benefits," like in-flight meals.

Ditto stock brokerage fees: as soon as that price-fixing was eliminated in the 70's, brokerage fees fell and everybody got richer.

Price controls do not work. They actually make things more expensive for the masses.

Finally I agree with westelle!

"social benefits accrue from allowing people some degree of stability in their housing"

There are other, less heavy-handed ways of doing that, like outlawing "unconscionable rent increases," as is currently the law in NYC.

"allowing a broader segment of society to live in the core of the city"

Meaning, by definition, that a broader segment of society is denied that same right. It's a zero-sum game, dude: there's only so much housing to go around.

"are willing to tolerate a less-than-free market to accomplish this."

Less-than-free = 60% of the stock of rental apartments.

Facts are facts: rent regulation increases rents (and purchasing prices) for anyone not lucky enough to qualify. The ones who suffer now are the young people who can't afford Manhattan because there isn't enough "affordable housing" to go around. Rent regulation kills "affordable housing."

Yup, young people with college degrees are the 'broader segment of society' that is now priced out of Manhattan.

Why do we reward underachievement, and claim that one of our public policy is to preserve it?

"Yup, young people with college degrees are the 'broader segment of society' that is now priced out of Manhattan.

Why do we reward underachievement, and claim that one of our public policy is to preserve it?"

Except for those whose parents pay their rent and/or act as a guarantor on the lease. Do those not count as distorting the market and driving up everyone else's prices? Is it OK because it is not mandated by the gov't?

TheFed, that's a dumb question. In a free market you can spend your money any way you want. That is the definition of what makes a free market work.

TheFed: yes, it is because it's not mandated by anything. Whoever has the money, pays. It's optional. As opposed to regulations that are not optional. I can't believe you don't see the difference between people being forced to pay for other people's preference and people opting to pay for it.
By the way, other subsidies, like foodstamps and transportation, are not inheritable and are subject to reviews.

Also, those pandering nonentities we have in local governments ride in the office on voters' apathy. Anything with a pulse and guile can be in government. Maybe it's time for the local election to become real.

good morning, folks. i log in to be entertained, am pleasantly surprised to see this thread still on the first page of TALK, and then i read comments, and once again am disappointed with the nature of the discussion.

jordyn: "I'm glad that some people who have the smarts to be lawyers or stockbrokers" ... what alternate universe are you living in where lawyers and esp stockbrokers are "smart"? ...but i do give you props for your last comment. i am officially bored now, too.

westelle: you're suffering from selection bias in your last statement.

group: is low-income housing considered RS/RC? serious question. you know, the 20 story buildings that line the east river. just curious.

steve: i think we should get the national guard in here, have them go door to door to all the RC/RS residents, have them show us their last 2 months of pay stubs. if they're low income and obviously can't afford to live in manhattan by "normal" means, i say we shoot them right there for not contributing more to this great nation's GDP. if they're middle income and are therefore scamming the system, i say we shoot them right there for... well, for scamming the system. if they're high income and are therefore REALLY scamming the system, i say we shoot them right there because sometimes, rich people really annoy me. if their exorbitant paystubs identify them as employees of the financial sector, i say we shoot them in the stomach and let them have a slow death. if they happen to mention that the benefits will "trickle down" to me at some point, well that sounds nice, so i say we let them stay. and give them cupcakes.

oh, clarification: what i mean by low-income is the projects.

paul, I agree 100%!

Just shoot them, but not for those reasons. Merely because they annoy me. :0

paul: or let's raze the projects and see what happens.

no seriously, are projects considered RC/RS?

Steve, you seem intent on having an argument with yourself. I acknowledged a while back that "I'm not at all convinced that the current approach to rent regulation actually achieves its goals, but if it did some degree of market distortion would be a reasonable price to pay." I'm positing that affordable housing may have a useful place in society, not saying that the current system is desirable.

wetelle--I live in a rent stabilized apartment right now. It is in no way fraudulent. I showed up, settled on a market rent with the landlord, and when I went to sign the lease they gave me a rent stabilized lease (in exchange, they got a tax abatement and liberty bonds). I didn't even know that the lease would be stabilized when I agreed to rent the apartment. As Paul points out, you're also suffering from a severe case of selection bias.

I think there's a distinction between RC/RS and low/medium income housing. With the exception of the $2,000 de-stabilization provision, RC/RS aren't sensitive to income, whereas low/medium income housing is only available to people below certain income thresholds.

Don't know about projects generally, but there is so-called Section 8 housing which is meant to protect low-income folks. Unlike RC/RS, it's a gov't subsidy (not private sector, i.e., landlord subsidy), and it's also means tested like Medicare.

jordyn, I also had a rent-stabilized market-rate apartment for 18 months that I didn't know was stabilized until I signed the lease. However, upfront I paid a higher rent than similar, non-stabilized apartments. Moving around the corner to a free-market building got me a 2-br 2-ba apartment for what I was paying for a 1-br 1-ba apartment.

"low/medium income housing is only available to people below certain income thresholds." Thus, one of three things will happen: either they will lose their apartments if their incomes go up, or they will keep the benefit even though their incomes go up, or they will do their damnedest to make sure their incomes don't go up so they can keep their subsidized home.

None of those is good.

Section 8 still distorts the market because it takes a dwelling away from someone who actually can afford it, and gives it to someone who doesn't.

Steve: So were you stealing from your landlord and society for 18 months?

Steve,

Yes, Section 8 is a market distortion, but in the same broad way that Medicare, or taxes, or other redistributed governemental benefit is. To me, RC/RS is more pernicious because it's not means tested and it's a "private taking", not a public taking.

Yes, kiss, you're right. I have no problem with progressive income tax rather than the regressive tax system we currently have as a means to redistribute income, but stabilization is pernicious.

No jordyn, I was actually paying a higher than market rent for the benefit of living in a market-rent stabilized apartment. (I was paying $3,300 for a 1-br, 1-ba: hardly theft!). I got cheaper rent when I moved to a fully free-market apartment. Look at any 80/20 building - their initial rents are much higher than non 80/20 buildings, but I took the place in a hurry to get the hell of out Miami.

why do people confidently speak as if creating a "free market" is a (desirable) end in and of itself... and then when the all-too-oft market failures occur, poo-poo them as anomalies?

paul10003, you're right, but that's only Republicans. Regulation (not price control) is necessary for orderly markets to exist, but orderly markets are not rational in the short-term. In the short-term tremendous disequilibriums can and do exist (Manhattan real estate today) but they correct themselves in the long-term.

the realty TV series:
stevejhx = bill o'reilly
spunky = holly hunter
imom = diane sawyer
tenemental = vince vaughn
west 81st st = george stephanopoulos

the bronx burned because people could not afford
to pay their rent - had the rents been subsidized
there would have been no problems

lowery, so the people who still cannot pay their rent should burn the buildings, right?

Billo?

Doubt it. He'd play my brother-in-law pretty well, however.

"the bronx burned because people could not afford to pay their rent - had the rents been subsidized there would have been no problems."

LOL! The Bronx burned because stabilized rents did not keep up with operating costs, so owners burned them down for the insurance money. You can't legislate that people sell things for less than the cost to make them.

And who in the 70's - when everyone was fleeing this city - would have "paid" those subsidies? There wasn't anybody here who had money.

Idyit.

steve, what would be the way to get rid of the regulations?

paul - what real estate market failures are you referring to?

Just because it might be fun to toss some gasoine on this toally absurd self indulgent discussion, I am curious, Steve, are you self made or did mommy and daddy send you to school and buy you your first pad? How do you feel about Landmarks Preservation (should they have been allowed to build a monstrosity on top of GST)? How do you feel about (or do you even recognize) social responsibility? Are you a Friend of the High Line? Without "subsidized housing" or rent regulaiton, the toe jam that shines your shoes and wipes your ass would not exist in this great city. We do well, we live comfortably, we live in an amazing country and we have an obligation to give back to the community. Take off the blinders you prick.

The regulations are being phased out de-facto, through the $2,000 cap on regulated rents, but there is unlikely to be the political will to do away with them entirely. The best thing to do is not to get them reintroduced, which is possible.

stevejhx: "$2,000 cap on regulated rents"? Maybe that was just careless wording, but it reinforces a popular misconception, so let's get the story straight. $2K is the level at which a unit becomes eligible for vacancy decontrol and luxury decontrol. Some landlords pursue those options; others don't. Many are inconsistent. Either way, though, the rent goes up. It doesn't stop at $2K.

Don't forget, it is High Rent ($2,000 per month) and High Income ($175,000 per year for the 2 prior years). Both tests must be satisfied for Luxury Decontrol.

"Steve, are you self made or did mommy and daddy send you to school and buy you your first pad?"

Self-made, paid for undergraduate (George Washington) and graduate (Columbia) out of my own pocket.

"How do you feel about Landmarks Preservation (should they have been allowed to build a monstrosity on top of GST)?"

For the most part I have no problems with Landmarks Preservation, but I do think they go over the top. Zoning is quite different from rent regulation.

"How do you feel about (or do you even recognize) social responsibility?"

Absolutely and I fully support socialized medicine and social security (they're more efficient than the private sector) as well as a progressive income tax unlike our current regressive one. It is not, however, my responsibility to ensure that anyone can have anything they want at my expense. Quite different from my paying more taxes.

"Are you a Friend of the High Line?"

No, I think it's ridiculous. They should build a subway on it - it's more needed.

"Without 'subsidized housing' or rent regulaiton, the toe jam that shines your shoes and wipes your ass would not exist in this great city."

Bullshit. Everyplace where they get rid of subsidized housing and rent regulation, rents go down.

"We do well, we live comfortably, we live in an amazing country and we have an obligation to give back to the community."

No doubt about it, and I give to charity every year. "Giving back to the community," however, does not - to me - involve making sure someone can have someplace to live that he otherwise couldn't afford. We need individual responsibility.

BTW if a relative of mine got arrested I wouldn't bail them out, either, nor would I cosign a contract for them.

"Take off the blinders you prick."

Thanks for the unnecessary insult, ye who enjoys "this toally absurd self indulgent discussion." What is self-indulgent about supporting decontrol of rents so that prices will come down, as they will. That is not self-indulgent; that works to the benefit of all.

You prick.

Oh, and leasinglawyer, I also support tort reform so that sleazy ambulance-chasing lawyers don't file ridiculous lawsuits hoping for a settlement because it's cheaper. How about loser paying the winner's legal costs, and no contingency cases. That'd be a first step toward cleaning out a bunch of vultures who live off of everyone and claim they're acting in the public good, when all they do is act to enrich they're own pockets.

"they're" = "their."

1. Good for you. I too put myself through college and law school.

2. I said nothing about zoning, I asked you about Landmarks Preservation which equates more to a taking than a zoning use issue.

3. I said nothing about socialized medicine or social security, I asked you about social responsibility.

3. Your High Line comment confirms your ignorance.

4. Your statement that rents will go down if rent regulation is abolished is unsupported and unsupportable. Even assuming, arguendo if they do go down by small percentages, the working class is still priced out of most of NYC.

5. I'm sure you do give to charity. Giving back to the community is far more that writing a check to your favorite charity.

6. I have no idea where the bail or contract question came from. Are you relating a personal experience.

As you might have surmised, I take issue with self important people who think that the dollar and who has it is the beginning and the end of the inquiry. Housing is one of those inalienable rights that some guy a couple of hundred years ago wrote about. You take a roof over your head and 3 squares a day for granted my friend. Next time you go into a store, or a diner or some other establishment, have a look and the man or woman working there and think what it might be like to discover that the rent that you pay with your hard earned salary will be doubling so that you can no longer afford even the most basic requirements of a comfortable life and then tell me that rent regulation is THEFT. You prick.

Oh, and stevejhx, I agree with everything you said in your follow up about sleazy ambulance chasers and tort reform. It would remove one category of vultures but would leave rent gouging landlords in place.

"Housing is one of those inalienable rights that some guy a couple of hundred years ago wrote about."

Those inalienable rights were devised by John Locke, at a time when only property owners could vote. They were borrowed almost verbatim by Thomas Jefferson, at a time when only property owners could vote, and only white men could own property (including black people).

So much for that theory. Housing is not an inalienable right - someone's got to pay for it. No free lunch, remember?

2. Landmarks Preservation is a zoning matter. Sometimes I think it's a good idea, other times I think that they go overboard.

3. Socialized medicine and social security are both social responsibility. You'll have to be more specific if you want a better answer.

3.1 (I guess). Preferring public transportation that all could use throughout the city is "ignorant," when the High Line clearly profits most the people who live by it? Doubtful.

4. Evidence Points to Little Harm from Lifting Rent Control

The most striking feature of the end of rent control in Massachusetts was that a remarkably small number of rent-controlled households–only about 7 percent–applied and qualified for these transitional extensions. In the three rent-regulated cities, about 42,500 units were subject to rent controls in 1994. However, tenants in only 3,090 of these units were deemed eligible for short-term protections because of their low incomes.

To say that this came as a surprise to most would be an understatement. It was generally believed that considerably more households would qualify for protection from decontrol. Clearly, the number of poor tenants in rent-controlled housing had been overestimated. It is worth noting that there has been a virtual absence of horror stories of hardship evictions reported by Boston’s vigilant press.

http://www.manhattan-institute.org/html/cr_3.htm

That said, who said the working class had a right to live in Manhattan, or anywhere else? Do they have a "right" to first-class flights at coach prices?

Doubtful.

"Next time you go into a store, or a diner or some other establishment, have a look and the man or woman working there and think what it might be like to discover that the rent that you pay with your hard earned salary will be doubling so that you can no longer afford even the most basic requirements of a comfortable life and then tell me that rent regulation is THEFT. You prick."

First, there are ways of controlling unconscionable rent increases and they already exist in NYC.

Second, people routinely are forced to sell their properties because they can't afford the property tax anymore. Should we grant them a waiver from their taxes, and if so who pays them instead?

Third, that's the EXACT SAME ARGUMENT used by the Luddites to oppose mechanization: CHANGE HURTS CHANGE HURTS CHANGE HURTS!

No it doesn't. It makes us all better, just like lifting trade barriers does. Some people experience dislocation - as a whole everyone is getter.

You need a fast lesson in market economics - what you propose is what drove the Soviet Union into bankruptcy, and what caused NYC to nearly collapse in the 70's. May your heart bleed for the rest of your life - this from a lifelong Democrat - because you CANNOT regulate prices for long without dire consequences. Nixon tried it in the 70's and it only made inflation worse; Chavez is trying it in Venezuela; Castro did a nice job in Cuba.

Things cost what they do for a reason - supply and demand. You can't manage one without managing the other, and no person or government is powerful enough to manage our economy. Ask George Soros.

getter = better

hehehehehehe

gas on the fire.

Damn you are easy

This whole concept that working-class people can't afford to live in NYC is either a myth or an outright lie. There are many very nice, good, safe neighborhoods in Queens, Brooklyn, Staten Island and the Bronx that are well affordable to rent or own for police officers, firefighters, teachers, skilled laborers (electricians, carpenters, etc.), nurses, and anyone else at those same income levels. To say that people should be entitled to live in a specific part of the city, or that the middle-class neighborhoods in the outer boroughs don't count for some reason, is insulting and obnoxious.

Totally agree LICC.

The outer boroughs are quite affordable, especially the Bronx. It was good enough for my mother and my grandparents when they couldn't afford Manhattan anymore, so I don't abide the discussion by leasinglawyer. And LIC and Bensonhurst were good enough for my grandparents on my father's side.

I also don't understand this, "hehehehehehe gas on the fire. Damn you are easy."

If anyone does, please let me know.

LIC - i didn't mean to imply RE market failures per se; but rather, market failures in the broader sense. of course, this could mean RE market failures, stock market failures, product market failures, etc.

paul - it is difficult to respond to your question without you giving a concrete example of a market failure, especially in real estate. I don't think these market failure are as "all-too-oft" as you portend.

steve - if the Bronx landlords in the '70s could have raised the rents to whatever they wanted, how do you suppose that would have changed anything? Would tenants with higher incomes suddenly have moved to the Bronx areas that burned down? Would the tenants living in those buildings suddenly have coughed up the higher rents because they were getting services? What makes you think the prior tenants in the burning neighborhoods moved out because of rent regulation? Don't you suppose there may have been other factors at play? And westelle, that's an interesting leap you've made, from tenants unable to pay rents to encouraging people to burn down their apartments. Are you referring to the tenants or to the landlords?

Lowery you are on target with your questioning.

lowery, you question - which VVerain says is "on target" - makes the assumption that the rent increase could have occurred all at once. Of course it couldn't happen all at once; it was a situation that had gone on since WWII and didn't have a voila solution.

It took years for the Soviet Union to bankrupt itself; years for Cuba to get where it is today. These price constraints have pernicious long-term effects, but in the short-term their effects can be negligible.

So yes, had rents been free all along - in good times and in bad - then I believe the Bronx would have been saved, or at least a good deal of it.

stevejhx: So to cut through the inflammatory rhetoric, you seem to be advocating a gradual phase-out of rent regulation. That's exactly what is happening, and I don't think anyone here seriously opposes the trend.

Although the battle's pace may be too slow for your liking, your side is winning the war. Rent control has already dwindled to the point of macroeconomic insignificance, and rent stabilization will get there over the next thirty years, even if the Legislature continues to renew it. Chill out. You're arguing with phantom opponents.

Jennifer Jason Leigh or Susan Sarandon will do wonderfully as poorishlady. Meryl Streep or Cate Blanchette or Kate Winslett could do it, too. But I must say, Kathy Bates and Lily Tomlin aren't bad suggestions. Or how about Sonja Sohn from The Wire? It's a juicy role . . .
Hey!!! We're all so beautifully clean-cut!!! We surf this instead of surfing porn!!!