The Atlantic - Latest Comments in For the New York in you

Re: For the New York in you

dog — Mon, 22 Sep 2008 20:02:09 -0000

"That said, I kind of retch at the thought of artificial controls on the rental market in New York."

That's not really a reason, is it?

"It's very hard for me to imagine that prices would increase with more apartments on the market. "

I find a lot of things that are hard to imagine that are also true.

Re: For the New York in you

Chet — Mon, 22 Sep 2008 01:06:40 -0000

Rent control is the imposition of heavy handed government control effecting the private transactions between two consenting, private citizens.

Your portrayal of the situation here is absurd. You're acting like this is an interaction between two people who can either take or leave the sale.

In reality, though, this is one party with the freedom to walk away from untenable terms, and another party who needs a roof over their head to live, and therefore is basically over a barrel.

This is the "free" market making people less free - just where we need government intervention.

Re: For the New York in you

Tom Hughes — Sat, 20 Sep 2008 17:04:53 -0000

As a New Yorker, I find it quite entertaining reading people imaginings of what New York's systems (there's a small amount of "rent controlled" apartments, more in the "rent stabilized" category, and even more free-market). This is especially aimed at "Libertarian", but goes for the rest of you, including Ta-Nehisi: we have a thing called Google, and it's useful at finding things called facts. You can find out what percentage of the market is rent controlled or stabilized, the (stringent) rules for transferring a rent-controlled apartment to a family member, the high rate of apartments moving into the free market in the last 10 years, and the demographics of the tenants.

My take: doing away with the system would speed the existing migration of middle class, working class, and elderly New Yorkers further away from the city's business core and center of jobs.

Re: For the New York in you

jay — Fri, 19 Sep 2008 19:58:13 -0000

People in rent-controlled apartments can take jobs that pay little like teaching, social work, entry-level editing. OTOH it keeps some from striving. Why should they? Rent is cheap.

My problem with it is that certain ethnic groups were kept out of certain neighborhoods and buildings. Their descendants profit from that. Oh wait, the entire American society is like that. Nevermind.

Re: For the New York in you

zacksback — Fri, 19 Sep 2008 14:15:43 -0000

(I think an easy fix to the system would be to disallow successorship to adult children).

Agreed. This is the part of New York RC that never made sense to me. How can you inherit something you don't own?

Re: For the New York in you

DC — Fri, 19 Sep 2008 13:51:25 -0000

Here's a useful contrast:

Every single apartment in the province of Quebec is rent-controlled, with strict guidelines about how much landlords can raise rent per year. They are allowed to submit receipts for major work done on the building and are granted increases that allows them to recoup the cost of that work over a reasonable period of time. Rent (and housing costs in general) is low, rental premises are maintained to a high standard, sanctions for slumlords and gougers are effective and well-known, and vacancy rates do not fluctuate wildly.

As a result, people don't spend much on housing and nobody earns that much on housing -- the system is geared towards buying and holding, and making a stable and secure (if modest) return on investment. It's a relatively small part of the Montreal economy, and people who want to go out on a limb and make big bucks quickly look to other industries.

New York's urban economy, in contrast, has become heavily reliant on real estate ripoffs and middlemen who place themselves between you and an apartment via a whole range of legal, institutional and "market" mechanisms. This sucks money out of more productive portions of the economy, and makes the city dependent on everyone endlessly shoveling more and more money into housing to feed the cycle and keep an enormous number of real-estate leeches gorged.

Quebec's housing lesson is that if you want cheaper housing, spend less money on it. Comprehensive rent control applied to all levels of the market *works*. Don't put up with a housing industry dominated by shrill speculators that refuse to build new housing unless it offers high-risk, short-term profits. We have equity markets for that kind of thing.

Re: For the New York in you

Watson — Fri, 19 Sep 2008 13:40:13 -0000

‘Stay the course’ on our current approach to the economy?

We won’t change the flavor unless we change the recipe.

Re: For the New York in you

DougEFresh — Fri, 19 Sep 2008 13:18:23 -0000

To avoid the ‘welfare’ stigma, the concept should be to subsidize the sector rather than to subsidize the person. It’s a matter of increasing the number of services that we consider essential. The police and fire departments don’t check our income when we call (yet).

These are vastly different concepts, public safety is already a government controlled entity that is funded through taxation to serve the citizenry, and is mandated under the constitution. Rent control is the imposition of heavy handed government control effecting the private transactions between two consenting, private citizens.

I don't think avoiding the welfare stigma is a good enough reason to socialize the residential real estate market. Unless I get a bigger house of the deal, then I am all for it.

Re: For the New York in you

Pronk — Fri, 19 Sep 2008 12:45:38 -0000

zacksback - the system you described is basically how NYC Rent Stabilization works (except that the % increase is set by a board every year based on some approximation of landlord costs - this year the increase was 4.5%). In your area of Jersey, that might guarantee your landlord something close to market rate for the foreseeable future, but in NYC, the market rate can change drastically in a short period of time. A neighborhood can suddenly become hip and market rates can double (or triple) in a few years. So, even if the rent board gave a 5% increase every year, a tenant who moved in ten years ago can suddenly have a very good deal. And many tenants live in their apartments for decades and pass them on to their children (I think an easy fix to the system would be to disallow successorship to adult children).

I think Freddie hit the nail on the head. The main "benefit" (depending on your perspective) of Rent Stabilization is that it allows tenants who live in neighborhoods that suddenly become popular to remain in the neighborhood. If you were a starving artist who lived in Soho in the 70s, you get to stay. If you lived in Williamsburg 10 years ago before it got all trendy, you get to stay. Without Rent Stabilization, those Williamsburg tenants would have to move to a less desirable area of Brooklyn. If in 10 years, their new neighborhood became trendy, they'd have to move again.

Some of us think that it's fine for those people to have to switch neighborhoods - if you want a guaranteed right to stay in the same location, buy a house. Some of us think that it's more fair for renters to be able to stay in the same neighborhood (and may also think that this will encourage renters to do more to improve their neighborhoods i.e. join block associations, PTA, community watch, etc). I think both arguments have merits, but since there are so many screwy unintended effects (like elderly single people living in 4 bedroom apartments they don't need and landlords basically having the incentive to provide as poor service as legally possible), I fall on the side of getting rid of Rent Stabilization (over time, not overnight).

Re: For the New York in you

Watson — Fri, 19 Sep 2008 12:42:34 -0000

‘Then we should subsidize those who can't afford basic housing.’

Re: For the New York in you

zacksback — Fri, 19 Sep 2008 12:27:26 -0000

As a renter in New Jersey, I like our system:

Once you sign a lease, the maximum the landlord can raise the rent is 5% per year on a renewal, so it tracks more or less with the theoretical COL raise a tenant would receive from their employer. I have lived in my apartment (great management company, great location) for 11 years. Eight of those 11 years the rent's been raised 3%. The couple of years that fuel has been an issue (H/HW is included) they've raised it 4%.

So, after a decade, my rent is below market rate for my area (by about $400 per month). If I move out, the landlord gets to bring the rent up to market, and with the new lease the process starts over again.

This means that the amount under market I'm paying isn't so huge that the landlord is getting screwed, plus he gets a higher average of long-term tenants that are low-maintenance (I mean that both literally and figuratively). And my rent is something that I can absolutely predict and budget for year-to-year.

I've talked to friends who live in other states that don't have this system, and they are impressed (and jealous).

Re: For the New York in you

DougEFresh — Fri, 19 Sep 2008 12:13:14 -0000

The cost of housing is nearly as far beyond the means of the average person as the cost of an MRI. Housing, like medical care (and Wall Street finance), must be subsidized. Unless you think the indebtedness approach is working out.

Then we should subsidize those who can't afford basic housing. Rangel sure as hell isn't among the group of people than needs to be living in subsidized housing. If he needs a little help, he should sell his vacation home in the Dominican Republic.

I can't afford to live in the house I want to, but I am not asking my mayor to force the owner to lower the price.

I guess the good news is that if prices in NYC are still very high, we aren't quite in a depression yet.

Re: For the New York in you

Libertarian — Fri, 19 Sep 2008 12:10:01 -0000

Dude,

I said it was based on anecdotal information but I am very confident that if you talk to anyone who actually lives in New York City they will tell you the same thing: "poor" people are not the ones who are living in Manhattan rent controlled apartments because they are handed down via friends and families.

I have no problem with NYC rent control, but I object to the false notion that it is somehow serving burger flippers and taxi drivers because that is pure nonsense, my guess is that people living in Manhattan rent control apartments are about 90% white, middle class or upper middle class.

Re: For the New York in you

Freddie — Fri, 19 Sep 2008 12:05:47 -0000

TNC, the problem with getting rid of rent control isn't that it doesn't lower prices for everyone (it might, though in the NYC market that's far from assured). The problem is that it inevitably raises rents, and raises them to an absurd degree, for people living in individual apartments. Rent control started because of the specter of families that had lived in the same apartment for generations seeing their rents triple from one lease to the next. Look, the NYC real estate market is insanity. Forget about Manhanttan-- it is absurdly expensive to live even in Brooklyn or parts of Queens. New York is in genuine danger of a place where no poor people have anywhere to live. When rates quadruple in less than ten years, as has happened in many NYC neighborhoods, there are massive demographic and cultural consequences.

"poor" people are not in rent controlled apartments in Manhattan.

Dude, you really have to stop making outrageous factual claims with no evidence at all. Seriously.

Re: For the New York in you

Libertarian — Fri, 19 Sep 2008 11:55:27 -0000

Burger flippers, subway cleaners, taxi drivers and probably firefighters aren't living in Manhattan now, unless they're all the way up in Harlem...neither are they living in rent controlled apartments. They're living in the other boroughs or NJ.

My anecdotal information is that rent controlled apartments in Manhattan are held by artistic types and some students who get them from friends or by people who got them passed down from old Jewish ladies who were living in these apartments in the 70's..."poor" people are not in rent controlled apartments in Manhattan.

Re: For the New York in you

Pronk — Fri, 19 Sep 2008 11:52:03 -0000

Watson - even if housing needs to be subsidized for certain people, the current system is a terrible way of doing it. First of all, a large percentage of people who live in rent stabilized aparments (including me) don't need a subsidy. Secondly, for the people who do need a subsidy, it would be much easier to just give them a voucher to use for housing that's worth $X a month and let them use it wherever they want.

I think just about everyone who's studied it thinks rent stablization is a terrible system. On the other hand, if the city just destabilized a million apartments instantaneously, there'd be chaos. The city is already making efforts to slowly phase out the system, which I think is the best approach.

Re: For the New York in you

That Fuzzy Bastard — Fri, 19 Sep 2008 11:44:29 -0000

Waitaminute---the article says that 70% of NYC apartments are rent controlled?

Bullshit. No way. Not even 70% of the apartments in Manhattan.

I've lived in NYC for 13 years now. I've been in some rent controlled apartment---they're largely clustered in the Upper West Side and the East Village. They do have some distorting effect on the economy, since people never leave them. But I've moved far too much to believe that 70% of the apartments here are in that category.

Stabilized, maybe, but all stabilized means is that you can only raise the rent by a certain percentage annually, and I doubt that has much effect.

In fact, I don't think the rent-controlled apartments have much effect on the market as a whole. The basic issue with apartments in New York is that supply is strictly limited by space (and proximity to Manhattan), but demand is pretty much limitless. That is, so long as crime stays down---remember, in the 80s, when all the rent control laws were still in place, you could get huge places for almost nothing. Crime is the great arbiter of New York rental prices; everything else is a sideshow.

Re: For the New York in you

blacksmythe — Fri, 19 Sep 2008 11:39:03 -0000

TNC, there is a difference between arguing that the mode used to enact rent control doesn't work...and arguing that rent control itself doesn't work. It is very easy to make the former argument. Given the economics of New York, it's very hard to make the latter. NYC requires literally millions of service workers to watch the babies, flip the burgers, walk the dogs, fight the fires, drive the taxis, drive the subways, clean the subways, etc. of the new white collar folks who (until this week) played a critical role in making NYC a global city.

Without rent control--and here I'm not talking about the specific MODE of rent control--more people who make NYC function would be priced out of the market. And they'd likely be forced to live too far to make it worthwhile to commute to the city to work.

Re: For the New York in you

Libertarian — Fri, 19 Sep 2008 11:38:30 -0000

There is already plenty of modest and affordable housing in and near cities, it just isn't in the desirable neighborhoods like rent controlled apartments are.

I don't want to see more low income or modest income housing in my area because I know that it brings with it increased crime. The fact that it is not politically correct to say so doesn't change the fact that its true and has been replicated over and over....when low income residents move out to the suburbs crime goes with them.

Re: For the New York in you

Watson — Fri, 19 Sep 2008 11:33:20 -0000

- The cost of housing is nearly as far beyond the means of the average person as the cost of an MRI. Housing, like medical care (and Wall Street finance), must be subsidized. Unless you think the indebtedness approach is working out.

- Lobbying as we know it should be illegal. How is it different from bribery? If you want to influence your representative, send them a post card or an email.

- The author of the cited article is part of the privatize-deregulate crowd. Are we still looking to them for economic advice?

Re: For the New York in you

elhondo — Fri, 19 Sep 2008 11:30:44 -0000

Deborah,

Anyone who has their own personal designated hitter and is sending same to grad school isn't poor. You Yankee fans are spoiled.

Re: For the New York in you

Deborah — Fri, 19 Sep 2008 11:24:52 -0000

When we moved to Boston in the 1990s so my dh could go to grad school, we could have gotten a rent-controlled apartment. Because we were poor young students, right? No, our offer to trot down and fill out the forms to establish our poverty was met with a polite eyeroll by the guy showing us the apartment; we were in because we had a relative who knew someone. All apartments in the RC building passed via this method.

Last time they were trying to overturn it in Boston they listed tons of the Rangels: judges and other highly paid people who had phenomenal deals on RC apartments. Sure, there were some poor people, even touching grannies, with RC apartments. But from what I've seen here, RC apts go to those who know someone.

Lib, if RC housing is a noticeable part of the market then basic economics suggests it reduces the stock of other housing, and thus the price on it goes up.

Build a lot more modest housing in and near cities, and prices will fall. No one wants it in their suburb or neighborhood, and it doesn't profit like new lofts in a city neighborhood, so it doesn't happen.

Re: For the New York in you

Libertarian — Fri, 19 Sep 2008 11:13:05 -0000

The problem with rent control apartments in NYC is that they for the most part are not held by poor people but by lucky people and these rent control leases are informally passed down to other family members or friends.

However, without rent control, all these apartments would go up to market price. The idea that rent controlled apartments are keeping prices artifically high in Manhattan is nonsense.

Re: For the New York in you

Peter — Fri, 19 Sep 2008 11:07:41 -0000

Rent controls are like price controls, politically popular for the shortsighted but economically stupid. A price rise after controls are lifted reflects high demand, a demand which will still be there whether the price reflects it or not. Rent controls are simply another layer of distortion on top of things.

As Tony Comstock notes, RC apartments drive freemarket apartment prices higher, so unless you get lucky enough to get ahold of a RC apartment, you're screwed.

Oh, and it's "retch," Ta-Nehisi, not "wretch."

Re: For the New York in you

Tony Comstock — Fri, 19 Sep 2008 11:00:07 -0000

I'm in favor of rent control because it helps keep the lease rate for my freemarket apartment high. I'm guessing there are lots of people like me.

Tenants in RC/RS apartments like it because it helps keeps their rents low. I'm guessing there are lots of those people too.

Owners of RC/RS don't like it.

Do the math.