| June 14, 2019 05:40 PM
As New York’s rent control laws approach their sunset date this weekend, New York Democrats are working to pass a new bill with even more restrictions. Proponents claim to be helping the poor, but their new bill will decrease housing availability, decrease housing quality, and force New Yorkers onto the streets while making it look like it’s all the private sector’s fault.
Maybe that’s even the point.
Rent regulation laws can be a bit confusing. “Rent regulation” is an umbrella term under which there are two types of laws: rent control laws and rent stabilization laws. Rent control laws only apply to people whose families have occupied an old apartment for several decades. In all, only 22,000 New Yorkers fit into that category, according to the New York City Rent Guidelines Board.
However, rent stabilization laws apply to nearly all apartment buildings of six or more units built between Feb. 1, 1947, and Jan. 1, 1974. Nearly one million New Yorkers live in such apartments, so rent stabilization laws are much more relevant.
As of Jan. 1 2019, rent stabilization laws apply to apartments with rent under $2,774.76. According to 2018 data from the New York City government, this accounts for the majority of rented apartments in the area. The landlords of these apartments are subject to government regulations, which will be even more numerous if the new rent regulation bill becomes law.
Under rent stabilization, the government sets the amount by which landlords can raise rent each year. Under current rent stabilization laws, landlords can also raise the rent an additional 6% in order to make property improvements that “directly or indirectly” benefit all tenants, such as a new boiler. But according to The New York Times, that number will decrease to 2% in the new bill. In other words, the already limited incentive for landlords to improve the quality of their properties will become almost nonexistent, and the quality of housing in New York will decline as a result.
When a landlord has a vacancy, he can raise the rent for that unit by as much as 20% under current law. This affords landlords an opportunity to boost the price of certain units above the rent regulation range and to test the market. According to the New York City government, “Since 1994, at least 155,664 units were registered with [Homes and Community Renewal] as being deregulated due to High-Rent Vacancy Deregulation.” Liberals want to put an end to this practice, and to that end their bill abolishes rent increases between tenants.
And it gets worse. Under current law, rent stabilized units can be deregulated if the tenant’s income exceeds $200,000 for two years in a row. This lets landlords test the free market and build a financial cushion without having to raise the prices on low-income tenants. Unfortunately, this path to deregulation will also be eliminated under the new bill. How this handout to top earners advances the alleged goal of helping the working class is hard to fathom.
New York’s new rent regulation bill will decrease housing availability by forcing landlords out of business. It will also encourage them to skimp on maintenance. But most of all, it will encourage condo conversions and prevent anyone with business sense from building new housing below the luxury threshold.
The bill is a wolf in sheep’s clothing, and it won’t just blow down one or two houses. It will destroy the entire housing market in America’s biggest city.