Rent Stabilization’s Fall Favors Manhattan’s Wealthiest: New York Times
Imagine a time in the near future when the city’s rent control/stabilization laws are lifted. Many have rallied, especially those in the business of real estate, for this change.
Many consider it a “win-win-lose” situation, according to an article by Adam Davidson, co-founder of NPR’s “Planet Money,” which appeared in The New York Times last week – great for the middle class and landlords but awful for those purposely trapped inside the system, that is.
“The landlords of those units would invest in upgrades and chart higher rents,” Mr. Davidson wrote. “At the same time, the subset of apartments that had been market rate would see their rents fall, because there would be, suddenly, twice as many apartments in the market.”
The argument is not a new one, and most – especially those who oppose what they believe is an antiquated system – believe these sentiments true. Many of those paying artificially and sometimes ridiculously low rents have even been shown to earn far above the poverty line. It’s no wonder they refuse to move.
“The benefits of subsidized rent levels create motivation for occupants of these units not to move,” wrote Bob Knakal, of Massey Knakal, in an op-ed that appeared in The Commercial Observer earlier this year. “Therefore, we have little old ladies living in three-bedroom apartments by themselves.”
But perhaps the most striking of the premises put forth in the Davidson article is the fact that rent regulation will “very likely” go away on its own, without any efforts to end it soon. He noted that 231,000 units have been deregulated over the last 30 years, as thousands more are forced from the system each year, with more high-end condos rising and an exponential increase in the number of market-rate apartments.
At this rate, “Manhattan will have fewer and fewer poor people each year and almost none whatsoever in a few decades,” Mr. Davidson speculates. “What happens if all the rich people are on one island and the poor but creative are somewhere else? It might just destroy the strange admixture that makes Manhattan so appealing in the first place.”
And, so, the greatest irony of a rent control system now purported to achieve the opposite of its original intentions is that, perhaps, after its natural dissolution, it will corrode the very eclectic mix that makes Manhattan what it is.