Housing Shortages Are Not Exclusive to New York City

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.

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