Albany Democrats have set out to right what they call a grievous injustice being endured by New York’s upstate counties. No, not the right to revive their moribund economies by developing their natural gas resources. No, not taking steps to lower the employee pension and health care costs that are sapping their shrinking property tax base.
Instead, Democrats from Kingston and Albany propose, in what they call the Statewide Tenant Protection Act, to extend the right to impose price controls on rent, currently limited to New York City, plus Nassau, Westchester and Rockland counties, to the entire state.
The bill would remove “arbitrary geographic restrictions” on the applicability of the state’s rent- and eviction-regulation system, allowing municipalities statewide to opt in.
It’s too much to hope that Albany will wake up to the counterproductive effects of rent regulation in the five boroughs, which include low rents for affluent households, low housing turnover that leads to under-occupied apartments and a red-tape nightmare for small landlords in the outer boroughs, where regulated rents are sometimes higher than market rents.
Legislators seem to be looking at an alternate reality. The proposed legislation laments that the bulk of the state is barred from enjoying the rent-control wars: “In the intervening 45 years” since rent control was authorized for downstate counties, “the need for rent and eviction protections across the state has greatly increased.”
Come again?
Upstate housing markets can’t remotely be described as tight. According to federal Census data, there are 21,430 vacant units in Buffalo, or 16.2% of all the city’s housing. It’s even higher in Syracuse, 16.6%. As for legislators’ home districts: The vacancy rate in Kingston is 11.7% and in Albany, 14.5%.
These aren’t the only indications that these housing markets need an influx of new demand, not rent controls.
In Utica, where the vacancy rate stands at 16.2%, the past five years have seen the construction of a grand total of six new housing units. It’s obvious why. The median rent of $687 isn’t likely to attract many developers. Rents are similarly low elsewhere upstate: The medians stand at $807 in Rochester, $769 in Syracuse. In Buffalo, 81% of renters pay less than $1,000 a month.
If legislators do hope to see new development upstate, rent regulations are among the worst ways to encourage it. No one in his right mind would add new units — or even renovate old ones — in a depressed market with price controls looming on the horizon.
Keep in mind the real problems upstate: Notwithstanding Gov. Andrew Cuomo’s scandal-plagued Buffalo Billion foray into state-directed capitalism, the poverty rate stands at 25% in Buffalo. In Syracuse, it’s 32%.
And memo to Assembly Member Kevin Cahill of Kingston: The unemployment rate in your city is roughly twice the national average — it stands at 7.7%, according to the latest Census survey — and the overall poverty rate is 18%.
These are places that have long suffered because they’re stuck in a high-tax, high-regulation state and desperately need new investment, not new price controls.
About the only good thing one can say about this so-called tenant-protection act is that it’s unlikely to take effect. The relevant law requires a housing vacancy rate of 5% or less for localities to have the option of adopting rent regulation. Sad to say, but the chances of that happening in Buffalo, Syracuse or Rochester anytime soon are slim to none, given the dismal economic prospects in these places.
Unfortunately, there is likely to be more meaningful rent regulation emanating from the office of the governor, who has indicated he would like to lift vacancy decontrol and make it more difficult for building owners to increase rents based on capital improvements.
These policies have functioned as effective safety valves, making it possible for New York City apartment owners in high-demand areas to avoid giving sweet deals to affluent tenants and to help owners in poorer neighborhoods avoid letting their buildings fall into disrepair. By the way, that’s tenant protection, too — but not the kind that Albany wants.
This piece originally appeared at New York Post
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Howard Husock is vice president for policy research and publications at the Manhattan Institute.
This piece originally appeared in New York Post