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These New Rent Laws Are a Giant Gift to New Yorkers Who Don’t Need Help

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These New Rent Laws Are a Giant Gift to New Yorkers Who Don’t Need Help

New York Post June 13, 2019
Urban PolicyHousingNYC

New York lawmakers and Gov. Andrew Cuomo are enshrining rent regulation into law for another generation — and claim that the move protects tenants. But rent regulation is the most inefficient way to protect affordable housing. It does protect something else important to the pols: a reliable voting bloc.

Tuesday night, the Assembly and Senate — the latter newly controlled by Democrats — announced a deal on extending the city’s rent laws, which were set to expire this weekend.

“These reforms give New Yorkers the strongest tenant protections in history,” Speaker Carl Heastie and Majority Leader Andrea Stewart-Cousins said. Cuomo added that the proposed laws are “the best tenant protections we’ve ever passed.”

Of more than a dozen provisions, three are particularly bad: ending a 25-year-old law that gradually removed higher-rent apartments from the regulated rolls;  shifting the responsibility for indigent tenants from the state to landlords; and making the laws permanent.

To review: New York has had rent regulation since World War I, when “emergency rent laws” took hold. Today, the city, under state law, regulates the rents of nearly a million apartments housing 2 million people.

Most regulated apartments are in larger buildings built before 1974. Rent regulation constricts landlords’ ability to raise the annual rent. (The city officials charged with carrying out this task keep it to roughly the inflation rate.) The law also requires owners to offer tenants perpetual renewal leases.

The point is to help vulnerable people. But rent-law protections are scattershot. Almost anyone of any income can live in a regulated apartment, just as in a market-rate apartment.

Income: In 2014, the last year for such specific data, 9% of regulated tenants earned more than $70,000, hardly wealthy — but hardly in need of special protection.

Education: As of 2017, one-third of regulated tenants have a college degree.

Helping families: More people with children live in unregulated apartments — 30% vs. 25%.

Poverty: 20% of rent-regulated tenants are poor, but so are 13% of market-rate tenants (often people who live in small buildings; buildings with fewer than six units are exempt).

Finally, the average regulated tenant isn’t that old — 34, three years older than the average market-rate tenant.

Few New Yorkers would support a food-stamp or other welfare program where nearly one of 10 beneficiaries didn’t need the help and left more than 100,000 poor households stranded.

Because of rent regulation’s inefficiencies, 25 years ago, then-Gov. George Pataki started to phase it out, signing a bill to deregulate empty units once the rent reached $2,500 (later increased to $2,700).

This was a good compromise: No one faced immediate upheaval, but over time, as rents kept up with inflation, the number of units would shrink.

As this week’s first major measure, lawmakers have ended this “vacancy decontrol.”

This move amounts to a brand-new protection for newcomers who earn more than $80,000, the amount you have to make to be approved for an empty $2,700-a-month apartment. Lawmakers have relatedly ended “decontrol” for tenants making more than $200,000, an odd group to target with a new benefit.

Second, lawmakers have added an onerous provision for property owners. They’re expanding the housing court’s authority to postpone an eviction for a year — usually because the tenant isn’t paying rent — “if the tenant cannot find a similar suitable dwelling in the same neighborhood.”

This transfers a big part of the burden of homelessness from taxpayers to landlords. Even fewer owners will take a chance on marginal tenants — the single mother with a new job — if they can rent to a “gentrifier” instead.

Finally, Albany is making rent laws permanent, rather than allowing them to expire every few years. This makes it much harder for a future Legislature to make even small fixes.

All this means that Albany is letting City Hall off the hook for the biggest problem behind unaffordability: Mayor Bill de Blasio ­refuses to overhaul New York’s antiquated property tax system, which gives many condo and co-op owners a break at the ­expense of tenants. (Landlords fold property taxes into rents, so they account for roughly a third of what tenants pay.)

Gotham needs a new property tax code, one that favors full-time occupied rental housing. Albany pols have protected one class: themselves. The New Yorkers who live in rent-stabilized apartments reliably vote on this issue.

A problem with gradually phasing out rent regulation is that it also phased out a key group of voters, who might otherwise care about the pols’ failure to fix transit, education and other woes.

This piece originally appeared at the New York Post

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Nicole Gelinas is a senior fellow at the Manhattan Institute and contributing editor at City Journal. Follow her on Twitter here.

Photo by nimu1956 / iStock

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