So What If David Paterson Has a Rent-Stabilized Apartment?
The New York Sun reported today that Governor Paterson pays $1,250 to live in a rent-stabilized apartment in Central Harlem. This reality, given that the governor has a second home as well as a third (the Governor’s Mansion in Albany), has reawakened the monster question surrounding New York City rents: What if we just got rid of stabilization? Wouldn’t the fresh supply of market-rate apartments drive rents down? And wouldn’t the rich forever be forbidden from freeloading off the stabilization laws?
Luckily, we have Cambridge, Mass., to answer these questions.
I wrote in November about what happened to the rental apartment stock in Cambridge in the 1990s after Massachusetts ended rent regulation and made most apartments market-rate. (Cambridge, along with Boston, was one of a handful of Massachusetts municipalities that still had rent regulation at the time.)
In a nutshell, rents shot up across Cambridge and stayed up; and the town, home to Harvard and M.I.T., became even more a bastion of the well-heeled. Landlords did what they’re entitled to do in America: They raised rents on their apartments as high as the market would bare.
“Five years after Massachusetts voters ended rent regulation … in Boston, Brookline and Cambridge,” began a New York Times article from July 2000, “rents have taken sizable jumps, the cities are spiffier and less pockmarked by deteriorating neighborhoods and many poorer people have been forced to move to communities farther from the urban core. … [A] leading landlord in Cambridge found that rents for his company’s formerly controlled apartments have doubled.”
Rent stabilization in New York City, which the state started in the late 1960s in response to higher rents (among other things) driving out the middle class, is one of the most successful affordable-housing initiatives in the post-World War II United States.
A few affluent people do skirt the system, including, apparently, the state’s chief executive, who could easily afford even Manhattan market rates. But, should the city’s one million stabilized apartments (a stock that dwindles little by little each year) ever be deregulated, those same market rates, already at record highs in many neighborhoods, would likely shoot upward. And stay there.
"...the cities are spiffier and less pockmarked by deteriorating neighborhoods..."
Doesn't sound bad to me.
You would have to be delusional to think that getting rid of rent control would lower rents. It should be obvious that it would raise costs for non-rent control units because rent control gives people other options.
Why is the government a better regulator of rents than the market? Why is Paterson paying $1,250 in rent instead of $1,050 or $1,850? Who decided that was the proper rent for his apartment?
The rent control laws are absurd. If you own property, the government shouldn't tell you how much you can charge to rent it out. Why is it more fair for a tenant to sit in a 3-bedroom Manhattan apartment for 30 years at a rent of $500 a month, than for the owner of that property to be able to earn the $5,000 a month that property might fetch him on the open market?
bear, no?
Getting rid of socialist rent control would drive prices down and quality. The free market works everytime it is tried. NYC politicans free markets because it would take power away from them.
"Why is the government a better regulator of rents than the market?" Why is the market a better regulator than the government? This isn't an argument.
"The free market works everytime it is tried." Jacob, this is ridiculous - you are commenting on an example to the contrary.
Why this religious belief in the free market these days? (I'd say the same for regulation, but nobody "believes" in that anymore.)
No one has a "right" to rent control. If you can't afford to pay the rent, then live somewhere else. I can't afford to eat lobster. I don't go into a restaurant and demand price control on lobster. I choose a lower priced item.
This country has such an entitlement mentality.
You are only entitled to Life, Liberty, and the PURSUIT of Happiness. Notice that it doesn't say the ACQUISITION of happiness. Only the PURSUIT of it.
No one is calling for the poor to be put on the streets. But we also don't have the right to demand of a single person (a Landlord) to subsidise what other people want.
If New York voters want artificially low rent, then let the voters pay a tax and send that tax to the Landlord to make up the difference between what he would get in rent on the open market and what he currently gets under rent control laws.
That would be fair.
Ah, but we're not talking fair. We're talking about voters who want to do "good" for the poor, but want SOMEONE ELSE to make the sacrifice.
There's an awful lot of that going around lately.
What's with all the "free market" crybabies?
The regulations have been in place for decades.
Landlords are grownups.
The knew what they were investing in.
No one held a gun to their head when they bought in.
So they take responsibility,
not try to evade their way out,
or trying to change the rules after the game starts by calling "free market".
Sorry to rock the world of the tool ideologues, please try not to freak out over having your world explode, but there really isn't a "free market" here in the US.
I've got a great idea. Ghettos!
Why don't we get rid of rent stabilization. Tax the hell out of the landlords who make so much on the property, let's see them pay the comparable taxes to LI. Use the tax money for education so that Long Island can finally receive the proper amount of school funding from Albany. I'm tired of subsidizing the city schools.
"They raised rents on their apartments as high as the market would bare."
Wrong use of "bare," snapperhead.
Wish they'd also mentioned Aspen or Vail, where workers must live very far from the places they work. Boston's becoming like that.
As rent control went into effect in metro Boston, there were pros and cons. Yes, the city is cleaner; yes, the transportation in and out of the city has improved greatly (commuters with $ make that happen). But the neighborhoods that gave the place its personality are gone. When I was a kid, Harvard Square had a violin-repair shop; a music store devoted to classical music only; a diner called Tasty, which was about four feet wide, with only three or four stools; and a whole lot of hippy-dippy houses with hippy-dippy tenants, who I am sure weren't paying much rent. Today the Square looks like an outdoor version of any mall in America.
(BTW For the poster who pointed out a typo--get sex. Or a life. We're not writing treatises, for chrissakes. )
To the poster whining about Harvard Square's loss of personality that has come with the loss of rent control: I agree with you, but what you and I call "personality" may, in fact, not be very desirable to the masses. Personality is in the eye of the beholder. If the masses want chains and an outdoor mall, then that is what they will get without regulation. If the new "outdoor mall" approach to these areas wasn't profitable, the landlords would rent to different retail establishments. But that is profitable, and that is what people want. If they didn't want those types of retailers, they'd vote with their feet and go somewhere else.
As for New York, I lived through the transformation of Times Square from Peep Show to Disneyland, and while it is sociologically now a less interesting space, again, the masses have voted. Before the troubles of the 1970s, Times Square was once teeming with the middle classes, and now it has been returned to its original state: a place for the masses to go.
But rent control for residences in NY is a different matter: unlike Boston, where the rent control system was draconian in its limitations of rent increases and the removal of rental stock, NY's rent regulations are flexible: apartments occupied by the rich get decontrolled, apartments improved dramatically by the landlord and frequently vacated can also have their rents raised to the point of decontrol.
As a result, there is plenty of investment in market-rate housing in NYC. The market rate rents are high enough to support the construction of thousands of new residential units, year in and year out, for the last decade.
These two systems live side-by-side: market rate new luxury apartments for the wealthy, and terribly-maintained, small, dilapidated rent-stabilized units for everyone else.
Have any of you ever lived in a rent-stabilized NYC apartment? I have. Mine, like most others I have ever been in, were terrible. The appliances were old, the lights disgusting, the bathrooms leaky and falling apartment, the closets tiny, the heating noisy and inconsistent, the hot water erratic.
Does anyone think that the renters living in these conditions would be able to suddenly pay multiples of this rent, or would be willing to do so for such conditions? Those who can afford to pay $2,500 a month for a 1 bdrm apartment are likely to refuse to live in such an apartment unless dramatic improvements to the unit are made.