Yesterday the New York Times Magazine ran a story online examining the impact and the future of rent regulation in the city. In it, Adam Davidson argues that the mix of rich and aspiring in Manhattan — broke writers and wealthy publishers, young artists and wealthy collectors, etc. is part of what makes New York City great, relevant and an economic power. Rent regulation, be it rent control, rent stabilization, subsidized or public housing all make it possible for the less well off to live here. But, as he and many others have pointed out, these regulations have an unintended consequence. He writes, “There are, effectively, two rental markets in Manhattan. Roughly half the apartments are under rent regulation, public housing or some other government program. That leaves everyone else to compete for the half with rents determined by the market. [Christopher Mayer, a housing economist at Columbia Business School] points out that most housing programs tie government support to an apartment unit, not a person. “That is completely nuts.”’ Under this system, people wind up sitting on housing for decades. Whether they need it or not, they will never leave their fantastically cheap apartments. That, of course, stiffles supply which drives up the cost of market rate apartments for everyone else. As he points out, this kind of housing is waning. Older housing is phasing out of many of these programs, funding for new housing is facing the axe in congress and 231,000 units have been deregulated in the last 30 years. Tiny gestures like the offer of 75 affordable units (out of 1,000) at the proposed 5 Pointz development hardly keep pace with demand. Davidson speculates that those priced out of Manhattan will just move to the outer boroughs. That has already been happening for some time resulting in the development rush we’ve seen in many parts of the borough and price tags headed the direction of the $3 million townhouse in Long Island City. Is that trend only likely to accelerate? Has rent regulation worked for Queens? And how would a less regulated city housing market change the borough?
The Perverse Effects of Rent Regulation [NY Times]
Photo: Jenna Schnuer