Reason on rent regulation
Because it’s New York, legislators in Albany are scrambling behind closed doors to determine how to reform New York City rent laws that expire on June 15. And because it’s 2019, the leading bills, put forward by pols on the leftmost edge of an emboldened Democratic leadership, would take a wrecking ball to just about every provision on the books, on the theory that they’re being rampantly abused by greedy landlords to force hard-luck tenants into homelessness.
This is caricature, not fact. Taken together, sweeping proposed reforms would shield people who don’t need protections from reasonable increases while eliminating building owners’ incentives to upgrade aging housing stock, among other pernicious side effects.
This page has long opposed rent regulations on the economic ground, shared by experts across the ideological spectrum, that the restrictions on 1.2 million units (a little more than half the city’s rental apartments) constrain the production of housing. But we realize that the statutes aren’t going anywhere anytime soon — which means the smartest course is to ensure intelligent adjustments aimed at protecting those in real need.
Instead, bills under consideration would stop any apartment from exiting regulation when it hits a set threshold (now $2,775 a month) and changes hands; end landlords’ ability to raise rents after making major building improvements, and after renovating individual apartments; and overhaul the system of “preferential rent,” whereby owners who charge below the legally allowed ceiling have the right to raise the rent in the next lease, provided they don’t go above the level allowed by law.
The push to obliterate major capital improvement and individual apartment improvement allowances, which aim to give owners good reason to invest in their buildings rather than letting them deteriorate, is fatally shortsighted. It would discourage vital upgrades in a city where most people live in buildings built more than a half-century ago.
Besides, even under the current system, a tiny fraction of units (less than 2% in 2017) are subject to such increases in any given year.
The motivation behind eliminating the rent threshold at which apartments exit regulation is to prevent landlords from harassing tenants out of their homes in order to charge the next tenant whatever they wish.
This is a real problem; building owners should not have a powerful incentive to rush to a relatively low arbitrary rent threshold in order to enable an escape from regulations. Still, the total number of units leaving rent regulation via this trigger has come down substantially from the mid-late-2000s, when it topped 12,000 a year, to today, when it hovers around 4,000 annually. Research by the Regional Plan Association estimates that landlords who harass their tenants and neglect their buildings manage less than 2% of the city’s housing stock.
A focused problem demands a more focused solution. Raise the cap, don’t abolish it.
Moreover, it is hardly a progressive principle that rent hikes should remain constrained even when apartments cost $5,000, $6,000 or $10,000 a month. At a certain point, decontrol is sane and just.
More effectively means-testing regulations, so that well-off New Yorkers can’t hoard housing stock meant for the poor, working- and middle-class, makes good sense. The current system for letting housing stock go market-rate when a resident earns a high income just doesn’t work, impacting just 100 apartments a year for the last six years.
Nor should anyone be surprised if waving a wand and turning current preferential rents into maximum rent allowed under law won’t lead landlords to charge higher rents from day one of a lease.
What makes the frontal attack especially irresponsible is that it comes after the Rent Guidelines Board under Mayor de Blasio has for six straight years artificially constrained rent hikes, delivering rent freezes or tiny increases even as owners’ costs have risen, with especially sharp hikes in taxes under the city’s control.
Thanks in part to steps the city has taken, it is also relevant that evictions citywide are down sharply, having dropped more than 37% since 2013.
What the city needs more than anything is much more housing, even just to keep pace with population growth. It won’t get it, not even with a pro-development mayor, unless and until it confronts restrictive zoning rules.
We sympathize with those who are trying to make ends meet in the five boroughs, where affordable housing can seem like an oxymoron. That’s why we have pushed for higher wages, half-priced MetroCards, not to mention a rescue of dilapidated public housing.
Radical surgery on rent regulations will do more harm than good.