It is not news that Bill de Blasio, then New York City Public Advocate, began endorsing a rent freeze in the summer of 2013 while campaigning to become Mayor. If it were not for RSA’s maneuvers behind the scenes in 2014, the City Rent Guidelines Board (RGB) would have most likely approved the City’s first ever rent freeze in Mayor de Blasio’s first year of office. In 2015, however, with all nine members of the Board appointed by Mayor de Blasio, a rent freeze was inevitable.
Prior to the 2015 RGB process, Mayor de Blasio publicly endorsed a rent freeze on several occasions. Leading into the Final Vote on June 30th, Mayor de Blasio remained quiet, but applauded the RGB after the Board voted in favor of no rent increases. At the beginning of October, the de Blasio Administration launched a $1 million ad campaign promoting the rent freeze that went into effect on October 1st. With City taxpayer dollars funding the ad campaign, RSA blasted Mayor de Blasio for promoting the rent freeze that was supposedly approved by an “independent board.” Rather than dedicating the $1 million to aiding the homeless or contributing to rent subsidies for those in need of assistance, the Mayor opted to promote his own political platform.
After much criticism, Mayor de Blasio held his first “town hall” style meeting after nearly two years into his mayoralty. The meeting was held at a public school in Washington Heights and was dubbed by many reporters as “political propaganda” after the Mayor seemed to stack the meeting with handpicked tenant advocates to focus on rent security and tenant protection. Attendees of the meeting were invites only, with tickets distributed by allies of Mayor de Blasio.
The media has caught on to Mayor de Blasio’s early re-election campaign rally. He has stripped away any pretense that the RGB is an independent Board and in many ways, he is now taking the credit for the rent freeze enacted by the RGB. The RSA is trying to work with Mayor de Blasio and his administration to educate them on how his affordable housing plan could be a successful one. If Mayor de Blasio’s affordable housing agenda is being driven by sound policy rather than politics, he would be embracing the biggest providers of affordable housing in the five boroughs – the owners of 1 million rent-stabilized apartments.
Since the days of Jacob Riis, housing has been viewed as the source of all urban ills. Riis photographed the deplorable living conditions of impoverished immigrants in the late 1880’s and is often credited with helping to establish the first tenement building code which required minimal light, ventilation and sanitary conditions at a time when indoor plumbing was rare. As government mandates imposed on property owners to cure social ills have multiplied (most recently through clean air mandates), housing has become vastly more expensive. The high cost of housing itself becomes another urban ill, “the affordable housing crisis” which in turn is credited with creating more urban problems such as poor health!
So now we have New York City Comptroller Scott Stringer doing his impersonation of Jacob Riis by pointing to the negative health consequences of an increase in over-crowding in New York City. While noting that overcrowding is not confined to poor, Stringer’s report fails to point out that a overcrowding is often a housing choice — sometimes by young folks starting out in the City willing to sacrifice space for location and sometimes by immigrants scrimping on housing costs in order to send remittances back home. Remarkably, the entire discussion of problems in the housing market proceeds without any mention of the fact that government intervention in the housing market is a very large part of the problem.
This article highlights the fact that housing shortages and high housing prices affect every major world capital – the direct result of global urbanization and immigration. While all these urban centers realize the ultimate solution lies in building vastly more new housing, the constraints on quickly producing new housing in dense urban areas results in the knee jerk reaction of imposing rent controls. Berlin imposed new rent controls in this context which has apparently not relieved its housing stresses. But Berlin only limited rent increases to 10% above neighborhood market levels. In fact, every existing or proposed system of rent controls allows for regular rent increases, usually tied to some independent measure of increased cost such as the CPI. The real test of whether rent controls work will come in New York, where the progressive administration of Mayor Bill de Blasio seems intent on pursuing a zero or near zero rent increase policy for the duration of the its tenure. The likely result will be the housing devastation that New York experienced in the post-War rent control era when there was no rent increase for 15 years and the City ultimately foreclosed on more than 100,000 apartments.