Sunday, June 6, 2010

Who Pays the Rent?

In NYC, we have something called rent regulation. These are certain apartments that fall under either rent control or rent stabilization. In case you were wondering what the difference is between control and stabilization, it's basically this: rent control is a fixed rate that applies only to people living in apartments since 1971 that were built before 1947 (once people move out or die, the apartments become rent stabilized); rent stabilization applies to apartments only built before 1974 and sets maximum rates for rent increases, keeping rents relatively low.

We are really the only big city in the country to have rent regulation and it's always been controversial. Fierce defenders of rent regulation think that the laws have been watered down and weakened over the years (they have) and that the laws have been too complex. People on the opposite side of the spectrum think that rent regulation interferes with the free market, warps the city's economy, and should be gotten ride of. Because of rent regulation, thousands and thousands of apartments have been made affordable for the middle class. But over the years there have been many attempts made by landlords and developers to phase out the rules which has only made them more complex.

The hub of the current controversy over rent regulation is that there are some people who live in rent controlled or rent stabilized apartments who could, otherwise, afford market rates. A new study by the business-friendly Citizens Budget Commission estimates that there are roughly 100,000 relatively affluent families living in these apartments. They believe that, in this case, people who can afford market rate apartments should not be allowed to rent these regulated apartments and should have their protections lifted. These people are, the CBC argues, hogging apartments intended for less affluent. And the CBC believes, over all, that rent regulation is bad and should be gotten rid of because, really, it hurts the people it's intended to help.

This is a bunch of crap. The CBC is a cynical, sneaky, mean-spirited attempt to strip poor and middle class people of their affordable apartments. Here's the deal: even though some people who can afford market rate apartments live in these protected units, vastly more of the people who live in them cannot afford market rates. Also, rent regulations are not meant to protect only the poor: they are meant to protect all tenants in NYC, to shift the market so as to keep all rents relatively affordable (not that it's an easy task). The CBC's suggestions would decrease the number of rent regulation apartments available in the city and this would weaken rent regulation even more.

This a slippery slope, bit-by-bit attempt to chip away at some of the few remaining law left to protect ordinary people, gradually setting the stage for full elimination of rent regulation.

The folks behind the CBC report know that getting of rent regulation one fell swoop is impossible. Politically, the backlash would be so severe it might actually strengthen rent regulation. So they instead suggest this small, at first blush seemingly reasonable suggestion to tweak the laws so as to make them more "fair" and "sensible"... when in fact their goal is to do away with all protections all together.

The only people who would benefit from this are landlords, developers and financiers. The rest of us? We'd get hosed.

You think the housing crises in this town is bad, just imagine it (or don't) if they got rid of rent regulation. So I urge you to fight against any attempts to weaken rent regulation.

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