This report examines New York Cityâ€™s rent stabilization system and estimates the effects of total or partial deregulation. It finds that rent stabilization provides little benefit to residents of the outer boroughs and the lower and middle-income neighborhoods of Manhattan, while providing a substantial subsidy only to the residents of the relatively affluent areas of Lower and Mid-Manhattan.
The report also finds rent increases for stabilized housing following deregulation would be significantly less than generally expected. Because residents of neighborhoods outside of the affluent part of Manhattan are not receiving significant subsidies, their rent increases would be minimal to non-existent. In the affluent areas of Lower and Mid-Manhattan, the substantial expansion of the unregulated housing market would create downward pressure on rent levels, making rent increases for stabilized housing less than might be expected.
The reportâ€™s specific findings are as follows:
- The median monthly subsidy provided by rent stabilization for all of New York City is $42. However, under total rent deregulation the median monthly rent of subsidized housing would increase by only $8 due to the expansion of the unregulated market. Under vacancy deregulation, the median monthly rent increase during the first two years would be $35.
- The vast majority of the benefits of rent stabilization go the higher-income areas of Lower- and Mid-Manhattan, where the median monthly subsidy from rent stabilization is $397. By contrast, the median subsidy in the Bronx is $58, in Upper Manhattan (including Chinatown and the Lower East Side) it is $9, and in Brooklyn it is $5, while in Queens and Staten Island the median subsidy is effectively zero.
- This disparity would be even starker under deregulation. Under total deregulation, only the Bronx ($37) and Lower- and Mid-Manhattan ($218) would see an increase in the median monthly rent of stabilized housing. The same is true for the first two years of vacancy deregulation, though in that case the median rent increase would be $54 for the Bronx and $374 for Lower- and Mid-Manhattan. In both cases, the median rent would not increase for residents of stabilized housing in Brooklyn, Queens, Staten Island, and the Lower East Side and Chinatown.
- Even now rent regulation does not appear to protect most City residents from rising rents. Between 1993 and 1999, the median monthly rent of stabilized housing citywide increased 24%, while the median rent of unregulated housing increased only 17%. Only in the affluent neighborhoods of Manhattan was there a larger median rent increase for unregulated housing.