Brother Can You Spare a Prewar 7-Room Apt?
June 10, 2002 9:47 PM   Subscribe

Brother Can You Spare a Prewar 7-Room Apt?
Will NYC ever be rid of a system that favors a select few, drives up housing costs for all, unfairly subsidizes vacation homes for the middle class and in general just doesn't work?
posted by nobody_knose (31 comments total)
Not as long as money is still valuable in our society, no.
posted by dong_resin at 9:52 PM on June 10, 2002

I'm not sure exactly who controls rent control laws, but if, for example, a mayor didn't care to be re-elected and simply wanted to do away with it, I'm sure he/she could do just that. dong_resin is correct, and politicians wanting to be re-elected in another reason.
posted by BlueTrain at 9:54 PM on June 10, 2002

The mayor could never simply "do away" with rent control, it's enacted by the state legislature.

And, as a general rule, if the cato institute opposes something, it's probably a reasonably good thing.
posted by palegirl at 10:07 PM on June 10, 2002

Not a prob'! Just set off a couple of dozen dirty bombs around Manhattan and watch the rents plummet.
posted by alumshubby at 10:11 PM on June 10, 2002

How does rent control work? Who decides what how much the rent is?

I'm wondering if there isn't a simple solution... suppose you lowered the rent for a rent-controlled apartment to something absurd, like $10 a month, and then completely cut off the renters from amenities - and by amenities I mean things like elevators and hot water, restricting them to mere physical access to the building. Are the renters going to sue for "reduction in services" for less than $10 a month?
posted by RylandDotNet at 10:31 PM on June 10, 2002

Rent welfare. Call it what it is.
posted by HTuttle at 10:50 PM on June 10, 2002

Rent control: where supply doesn't give a damn about demand.
posted by insomnyuk at 11:02 PM on June 10, 2002

I think its pretty important to distguish between Rent Control and Rent Stabilization...

here is a interesting description of the differences.

Including this:
At one point in the early 1950’s there were over two million rent controlled apartments. The 1993 Housing and Vacancy Survey (HVS) reported 101,798 rent controlled apartments. The 1996 HVS reported 70,572, a decline of more than 30,000 units over three years. In 1999, only about 50,000 rent control units remained - so the rate of decline slowed a bit.

With proper enforcement of the legacy laws, it does seem likely rent control will die a natural death (or close to it), in not too long. Although I personally think the best way to do this would be to remove legacy laws entirely (when the current tenant dies, its gone) to kill it faster.

Regardless, as much of a scapegoat as it is, those 50000 units are not a primary cause of high rents -- just an annoyance to the people who leave near them.

Rent stabilization, on the other hand, is a much less easy target... it doesn't result in the kind of insane deals rent control does, just prevents landlords from making drastic changes. Its certainly something that has an impact on rents city-wide, though, I'm sure -- just a question of whether you think its a worthwhile cost. I do, but I can see why others oppose it.
posted by malphigian at 11:13 PM on June 10, 2002

(ahem, now in the right thread)

This is a textbook case of well intentioned regulation interfering with a free market and making things worse.

literally, it was in my macro-economics text book as an example.

I don't know how I feel about it, you could probably tinker with the system. For example, you could make a law dictating that any 'enhancement' of services can be added and removed without changing the rent. That would take care of the deck and doorman problems.

Personaly, I think a little socialism can be a good thing, but obviously it takes a lot more work and is much more inneficient.
posted by delmoi at 11:17 PM on June 10, 2002

Friends of mine had a rent-stabilized 2BR apartment in the W 90s. Not the toniest neighborhood, then; and the apartment was dumpily utilitarian. Only the view compensated. But it was still just $250; they could make twice that subletting just one of the bedrooms. Such a deal.

As for the reduction in services angle, which I hadn't known about -- I wish I could use that on my current landlord (Evanston IL, not NYC). They converted me to metered gas without telling me until the damn thing had been in for six months, and then I spent several more months doing the runaround with the gas company who kept dunning me to get them a meter reading. Um, not for the gas meter ... you installed ... in the locked utility room ... next to the freaking ceiling. It does cheese me that I couldn't get an extra electrical outlet, or a new phone line, but new tenants get all-new kitchens & electrical. But I can always move. *sigh*

As for the Cato institute study, I actually impishly linked it here before (for which I was roasted, as if I'd invited Pitchfork Pat to a diversity seminar). The part that convinced me was the finding that other non-controlled cities had experienced greater growth and variety in the housing market. The implication is that New York could solve its rent inflation by ... surprise ... building more (and more diverse) housing.
posted by dhartung at 12:00 AM on June 11, 2002

I don't know what you people are whining about, but we need more rent control, and better enforcement of stabilization. This town should not be exclusively for the rich, or rather, it should not begin to resemble an eclair, with the rich cream in the center, and the bread on the outside. Low-income housing is a must, and in my opinion, even if it's meerely as a social exercise, the poor should be encouraged to live next to the rich as much as possible. Why is that someone can't live in the same housing their entire life? It's because the way rents are allowed to soar assumes that every New Yorker is on an upwardly mobile economic path, that we all are destined to reach six-figure incomes. It's just not so. Folks that live more than a decade beyond retirement are often forced to move because their stable income does not match rising rents. So instead of going to a strange neighborhood in Queens where they can afford the rent but the subways are far and the buses infrequent, they just go to Florida. There's a lot more to say on this subject, but the summary of my opinion is that there's *no* harm in rent control and stabilization, and plenty of good.

And any discussion of creating more diverse housing *must* take into account the way that supposed mixed-income housing has, time and time again, been turned into high-income housing after completion. It's a regular scam. The way it works is, a developer files with the city for easements, tax breaks, zoning waivers and grants and other assistance to build mixed-income housing. The housing is built. But somewhere along the way, the original company (incorporated just for this one project) goes bankrupt. Its assets are sold off, and in the negotiations, many of the obligations to provide the low-income housing part of mixed-income are dropped, because the new owners say a profit can't be made. The easements, tax breaks and other city-provided benefits remain. Of course, the new owners are linked financially with the old, sometimes sharing board members, staff and legal counsel. The bankruptcy was part of the plan all along.

[As a matter of record, I pay $500 a month for half of a two-bedroom apartment which goes for $900 a month in Greenpoint, Brooklyn, an entire floor of a small house. It is not rent-controlled, just cheap, because the landlady has lived here her entire life and is out of touch with the market. This apartment, run by someone else, would rent easily for $1200 a month.]
posted by Mo Nickels at 4:02 AM on June 11, 2002

"the poor should be encouraged to live next to the rich as much as possible"

Why, exactly, is that? I hear a lot of chatter about mixed income housing all over the country, but I never hear any clear analysis of the supposed benefits. I also never hear any examples of successful implementations of this idea.
posted by Irontom at 5:10 AM on June 11, 2002

A few comments, but first full-disclosure: I live in a rent-stabilized apartment in Brooklyn Heights, a very nice neighborhood that I could probably otherwise not afford to live in. My rent goes up by a regulated amount every year (6% for a one-year commitment, and 4% for two). If I move out, the landlord can raise the rent by some significant percentage (I think somewhere between 15 and 20). Here is a good explanation of NYC regulation.

BTW- apartments do eventually "destabilize", based on some combination of elapsed time and rent price.

Mo- the poor should be encouraged to live next to the rich as much as possible
Actually, it's probably the other way around. Either way, however, it just doesn’t work that way in NYC (if not elsewhere). Rent stabilized apartments go up enough between tenants to keep the truly poor out. Rent controlled apartments simply don't turn over until the tenant dies. I think there are, incidentally, fairly few rent controlled apartments left in NYC.

Rylanddotnet- suppose you lowered the rent for a rent-controlled apartment to something absurd, like $10 a month, and then completely cut off the renters from amenities
I'm pretty sure you can't do this, at least in NYC. Every lease I've signed provides heat and hot water as part of the rent in the boilerplate (no pun intended) text.

Rent stabilization is, IMHO, a very good thing. Landlords in NYC are greedy and short-sighted, which results in absurd rent increases in times of economic upswings, as we've just seen recently. It's somewhat of a disincentive to work harder for more money if you're just going to funnel it to your landlord.
posted by mkultra at 6:50 AM on June 11, 2002

At least here in Boston, the end of rent control means that the average rent for a two-bedroom apartment in the Allston neighborhood, where I live, is around $1600-1700, with no new housing being built and landlords having too much control of the housing market. This is by no means a nice area, with mostly students and 20-somethings living here. Thus, the repeal of rent control has resulted in renters who theoretically have little money paying high rents. Mass. was a screwed up situation anyway, as the repeal of rent control for Boston was a matter of state referendum, so you had people in Worcester and Springfield voting on how much rent I'm going to pay in Boston.
posted by Bezuhin at 7:17 AM on June 11, 2002

What rent stabilization defends is the principle that a person has some right to live where they grew up or grew old, even if it happens to be where a lot of affluent people want to live. If you believe that all rights should accrue to the affluent, and that unfettered capitalism will lead to the greatest good for the most deserving, well, that argument won't appeal to you...

And, yes, I live in a stabilized apartment I could never afford at market rates. It's across the hall from my sister, who's about to have my niece or nephew; it's a few blocks from my parents, who still live in the apartment where they raised me across the hall from my uncle. It's our neighborhood, and I think it's nice that we haven't had to leave it just because it's in Chelsea and the Village.

But, in fact, a New York mayor who connived with Albany to end rent regulation wouldn't just lose the next election; he'd lose his party the city for the foreseeable future — or at least the memory of the current generation. It's not going to happen.
posted by nicwolff at 8:05 AM on June 11, 2002

What rent stabilization defends is the principle that a person has some right to live where they grew up or grew old, even if it happens to be where a lot of affluent people want to live.

More accurately, it defends the principle that a person has some right to live where they grew up or grew old, even if it happens not to ACTUALLY BELONG TO THEM. Rent is a freely entered contract by two parties and government intervention on the side of one party is not only wrong, it is destructive as it inhibits the very thing it means to preserve - low cost housing.

However, it will persist as long as those benefitting are in the numerical majority and continue to vote.
posted by ljromanoff at 8:29 AM on June 11, 2002

I found that article incredibly slanted. For one, it only deals with the hot-button issue of Manhattan rents. Second, it focuses on co-ops almost exclusively and the issues they have, not rental buildings. While I can sympathize towards some of the owners regarding the disparity of services, at the same time I have to go with the one quote in the article "Who in their right mind is going to pay $96,000 a year down a rathole?". Why is it that there are no complaints when they move in? There is also the issue that many of the people in the r/s apartments came in at a time when most of the now popular neighborhoods were not so nice. Could it be that these persons, by their presence, helped transform things for the better?

The article also spends a lot of time whining about situations that have nothing to do with rents, but with the generalized mayhem that comes with living above and below other people. The guy complaining about the woman and her "high heels" or the "well-intentioned, raffish neighbor, a retired professor". Those are just cheap theatrics. Trying to wade through all those shots make it very hard to form a decent opinion about r/s. I wonder what the author pays in rent and who the neighbors are?

I left Manhattan because of the noise, although I knew too that getting priced out was soon over the horizon. My old Upper West Side share had its owner forced out and I went to Brooklyn, to a rent stabilized building (not co-op, all rental).

It is a bit inconvenient at times. For example, when I first moved here, the closest ATM was a good 20 minute walk, and I walk fast. It is generally cheap and more importantly, easy. I basically get what I pay for - a 130 year old, wood frame building with a sloping floor in the kitchen and less than 15 amps of electricity for the entire place. It is not exactly uptown living, but it is all I want. The point here is that I got priced out because my former place did not have the benefits of r/s laws.

No complaints. Just moved on. Hell, I wouldn't want to live anywhere near most of the people in that article. It made me shudder just to read it (both the stabilized and non-stabilized tenants). Luck was on my side this time around.

Finally, stabilization is not a bad thing. Rent control, well it is past its time. NYC landlords (and surely in other cities) are an historically shifty lot. Believing that simply ending stabilization overnight will solve the problem when, one side of the group has such a bad record is not well advised.

For what it is worth.....
2001 Housing Report for NYC. [Warning:870k PDF]. Although wordy like any document of this type, it does shed some light into the specifics of the housing market.
NYC Building Information System. Complaints, actions, resolutions. Not always up to date.
Look Up Your Building's Property Tax
New York's Secret Tax. An article from Gotham Gazette.
posted by lampshade at 8:56 AM on June 11, 2002

Rent Control/Stabilization is, largely a disaster. But any reform should be linked to massive spending on rail/subway. I would submit that Manhattan rents are so high in part because it takes so damn long to get to much of the surrounding outer boroughs. NYC needs a rail system a la Paris' RER!
posted by ParisParamus at 9:10 AM on June 11, 2002

Why is it that there are no complaints when they move in?

Who says there wasn't?

Anyway, not allowing property owners to charge the amount they would like to for rent actually contributes to the problem of insanely high rent because first, it discourages new construction, and second, it encourages landlords to raise rents for new tenants higher than they might otherwise. If a landlord could raise everyone's rent by 5% one year, he wouldn't have to raise the four vacated apartments' rents by 50%.

Worse, while rent stabilization may protect some non-existent right to rent the same place for as long as you please, regardless of the thoughts and feelings of the property owner, what about new residents who have no access to reasonably-priced housing? And again, what incentive is there for a developer to try to provide that housing if he's just going to get locked into an inflexible system of laws that pits landlord vs old tenants vs new tenants and makes it difficult to recoup his investment?
posted by daveadams at 11:36 AM on June 11, 2002

Don't you squatters feel the least bit of shame for having expropriated someone else's property? I mean, if you can't afford the rent, pick your tired asses up and MOVE. Go to Brooklyn or Queens or Staten Island. Check out Long Island City or the Bronx. Get a second job. Give up smoking pot. That should save you a few bucks. Just stop your miserable complaining already, ok?
posted by mikegre at 12:05 PM on June 11, 2002

Give up smoking pot. That should save you a few bucks. Just stop your miserable complaining already, ok?

Heeeey, maan, who's complaining? I'm hiiiiiiiiiigh!

Really, dude, you're too fucking much. Where the hell did that bit of nonsense come from?
posted by Skot at 12:17 PM on June 11, 2002

Just stop your miserable complaining already, ok?

It saddens me that I agree with your ultimate point because I detest the tone of your post. There's no need to be personally insulting or make assumptions about how other people spend their money in order to make an argument.

I have no doubt many people would be displaced if rent stabilization were eliminated. But in the long term, the housing market in NYC would be much better off.
posted by daveadams at 12:21 PM on June 11, 2002

Skot wrote: "...Where the hell did that bit of nonsense come from?..."

Oh, I dunno. I guess I just associate squatters with pot smokin' hippies. Not that Republicans don't roll a few themselves ;)
posted by mikegre at 12:40 PM on June 11, 2002

rent the same place for as long as you please
You're correct, there is no right to be violated here. There is a law though. I waited quite patiently for my turn - years in fact - for an opportunity like this. I got in and I am staying for as long I can and not apologizing for it. My situation is a building where the low rent runs in the high $200s to the mid $900s. I sit squarely in the middle. The Taj Mahal it ain't.

If a landlord could raise everyone's rent by 5% one year,
Do you really think that would ever happen? Do you really think landlords would really police themselves? I mean, come on. This is what R/S does. Rents are approved from between 2 to 6 percent every year or whatever is approved by the board.

If I move out, the landlord gets an automatic vacancy increase (15 to 18 percent) on top of the standard increase. On top of this, LLs get tax relief and the satisfaction that their investment appreciates in value.

Don't get me wrong, "imminent_death_of_my_cheap_rent_predicted". Probably in about 3 to 5 years when the entire system is overhauled and the imminent_death_of_MeFi has come to pass. In other words, who knows when it will happen, but I would expect that R/S will be brought in line with market rates at some point and R/C will be gone completely. The party is over.

Oh...and I don't smoke pot. Also, I am not a squatter, I have a legally binding contract - the lease. I have not expropriated anybody's property. I moved to Williamsburg, Brooklyn when it was a still a crack neighborhood. The vial crunching walk to the subway memory is fresh in my mind.

The worst part these days is that it is not the people who can afford $96,000/yr rents who will get me forced out, it is the people who are doubling (and tripling) up on 1 bedrooms in the area that have the landlords drooling. We got our first apt share folks in last month in my building, but it has been going on all over the place for the last 2 years.

LLs have rights to like declining a lease because a family member is moving in. LLs also can get a person evicted though the courts and other means. They are in a business and they agreed to the rules. They knew what they were getting into and while they rules may be behind the curve with regards to "market value", their investment will be met by making ends meet. Their payoff is in the overall market value of the property, not just the rent charged.
posted by lampshade at 1:02 PM on June 11, 2002

As lampshade points out, landlords pay reduced prices for buildings with rent-regulated tenants. They're not getting ripped off; the end of rent regulation would price some of them out of the market too.

And posters like daveadams also miss, or fail to address, the point of rent regulation as it is presently supported by the electorate: specifically to prevent people moving to a neighborhood from displacing its present residents. The property owner's right to charge whatever he wants, and the new resident's right to move to New York, are being balanced against a right we have created democratically to live in the place we were born and raised.

It's what farm subsidies were supposed to do — preserve traditional American communities, provide cultural continuity, strengthen the family — except that since we're Democrats, we haven't turned it into a windfall for a few big businesses.
posted by nicwolff at 2:00 PM on June 11, 2002

OK, that last paragraph was a troll and I apologize.
posted by nicwolff at 2:02 PM on June 11, 2002

Do you really think that would ever happen? Do you really think landlords would really police themselves?

They do in other markets, absent the outside influences and controls of rent control and stabilization which are present in places like New York City. Why? Because we want our buildings full, and rents that are artificially inflated beyond what the majority of renters can pay will keep apartments empty.

Yes, a lot of money can be made from a 30-unit building with rents of $3,000/month, but not if only 16 units are occupied. Any landlord with any business sense would far prefer 100% occupancy at $1,000/month.

However, the lack of autonomy created by rent laws removes the element of "normal" business sense which governs these things in free markets.
posted by Dreama at 4:14 PM on June 11, 2002

It's what farm subsidies were supposed to do

And like farm subsidies and most governmental price fixing, it actually makes the market worse for the people it's trying to help.

Do you really think that would ever happen? Do you really think landlords would really police themselves?

No. My point was not that landlords wouldn't try to maximize their income, of course they would, and they always will. My point is that rent stabilization rules artificially increase market rents and decrease incentive to build new low-cost housing.

the point of rent regulation as it is presently supported by the electorate: specifically to prevent people moving to a neighborhood from displacing its present residents.

I understand that. My point is that the tradeoffs involved are more costly in the long run to more people. But that judgement may reflect more on the different values we place on such things.
posted by daveadams at 4:17 PM on June 11, 2002

My building went off rent stabilization this past June, and there's been a significant turnover, many people angry and crying out against the landlords, who raised the rents to market prices (sometimes a jump of $1400 or so).

There are other systems in NYC, though. In some cases, for instance, building owners are required to rent out a certain percentage of apartments at low prices to a certain group — low-income families, for instance, or performing artists — and then are allowed to rent the rest out at market prices. These deals are worked out before construction or renovation starts, I believe, in exchange for tax breaks, air rights, and other city-controlled goodies.

Also: it was still just $250; they could make twice that subletting just one of the bedrooms. This practice is illegal in New York City, though I get the sense it's widespread. (I dug around for a relevant times link, but can't find it.) It totally subverts a system that, at least in theory, is supposed to keep rents lower.
posted by oddovid at 7:42 PM on June 11, 2002

Great point (that I would have made if I'd been on earlier) landlords, unless they've owned since before WWII, aren't being expropriated -- the rent stabilization system was in place when they bought, and was priced into both their purchase price and their expected return. They have no more a moral property right to charge market rents than I have a moral property right to build a 10 story office building on my single-family-residence zoned suburban lot.
Indeed, each reform loosening the laws in effect could be construed an unearned windfall to the landlord...

That said, of course, I totally oppose rent control and rent stabilization because of who it victimizes: every other person who lives in the metropolitan area. Rent control, rent stabilization, and a wide variety of "affordable housing" social engineeing in Manhattan has the effect of badly distoring housing markets and commuting patterns throughout the tri-state area.
posted by MattD at 8:05 PM on June 11, 2002

oddovid: I didn't say it was legal. It most definitely used to be widespread, though. (This was 15 years ago.) For instance, the 1970s-era plot of Neil Simon's The Goodbye Girl hinges on the politics of a legal sublet. Illegal sublets have been featured in NY-based sitcoms such as Friends and Mad About You. But the decline in rent control probably also means less illegal subletting.
posted by dhartung at 8:41 PM on June 11, 2002

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