Why is the Rent Too Damn High? Go back to 1994

As gentrification sweeps over our city, as the cost of living explodes, it's easy to point to many reasons: drastically lower crime rates, making previously undesirable neighborhoods desirable; more New Yorkers choosing to stay in the city instead of moving to the suburbs to raise families; massive infusions of foreign money spurring new construction and gobbling up real estate (mostly as tax shelters); more and more people moving here from across the country in pursuit of hot jobs; and, obviously, technology, creating a new class of rich people and sites like Airbnb. 

It all comes down to one basic thing: the rise of market demand. 

There's more demand than supply for housing in NYC, and thus the rent gets too damn high.

Very often, when it comes to massive demographic and economic shifts like this, in a city or a country, people will say, "Well, there's no simple explanation. You can't point to one thing."

But what if you can? What is there's one simple, clear explanation?

In 1994, the City Council passed a law allowing landlords to take apartments out of rent stabilization when the rent passed $2000 a month. Called "de-control", the arguments for this move were that rent stabilization actually subsidized wealthy people, that the "average" rent was $600 so the likelihood that it'd be $2000 for most were "remote". Well, since then, over 152,000 have fallen out of stabilization, and that number rises to almost 250,000 when coop conversions are included. Also, this law incentivized landlords to harass and evict tenants with impunity, trying to get the apartments vacated so that they would fall out of stabilization. 

Then it got worse: in 1997 the state legislature passed a law that made it impossible for the city council to change its own law. And it's been higher rents ever since. 

So there, in a nutshell, is why the rent is so damn high.

This effort was, as you might imagine, engineered by the real estate industry. A lot of astro-turfing and cynical politics was behind it: they mounted a big PR campaign to make council members and New Yorkers convinced that de-control was actually in their interest (when it was the opposite). They pointed to rich people and celebrities paying low rents, they found black and Latino landlords to appear in ads, trying to make this move into some kind of "progressive" economic thing. It's was a complete, very effective snow job.

What's most frightening is that many of the city council members who voted for it didn't understand what they were voting for. They were conned, ashamedly so. 

And now gentrification is everywhere, including in small, out of the way neighborhoods like Highbridge in the Bronx. No place is safe -- this is the new menace.

And it all goes back to March 21, 1994 when this law passed. This is why politics matter and why elections have consequences.