The Inevitable Results of Rent Control

Rent control has become an unsuccessful measure to insure affordable housing in New York City, but nowhere near the catastrophic effect it has had on buildings and tenants in Mumbai.

At an average of 12 pence ($20) per month, it is not surprising how tenants are forced to live in poor living conditions in buildings that are decades old. Many buildings have collapsed and claimed lives and many others are in conditions so bad, that they are nearing collapse.

With rent so low though, the “it’s better to die” mentality has tenants willing to sacrifice their lives. The poor conditions of these buildings is a clear indication that building owners cannot maintain and make necessary repairs to their buildings because of the binding rent control laws.

From RSA President Joseph Strasburg: Memo to New York City Council: Right to Counsel Act Won’t Curb Homelessness

On the surface, guaranteeing the right to counsel in housing court appears to benefit tenants and affordable housing. But free legal representation for low-income New Yorkers facing eviction is more quick-fix-politics than sound long-term policy – and the politicians pushing these gimmicks, like New York City Councilman Mark Levine, couldn’t be more disingenuous.

Levine crows about a tenfold increase over the past three years under the de Blasio Administration in the amount of resources the city allocates towards anti-eviction legal services. He gushes about the mayor’s “historic” $155 million commitment to the program.

But Levine neglects to mention that during this same three-year period of historic right to counsel funding, New York City’s homeless population has reached historic levels – the highest since the Great Depression – with 61,935 New Yorkers (including 23,445 children) in the city’s shelter system.

How, then, can Levine say with a straight face that the right to counsel initiative is the cure for homelessness? The argument can be made that it’s having the opposite effect.

No one is saying that guaranteed free legal service isn’t a benefit to poor tenants, but here’s the reality: non-payment of rent comprises approximately 90 percent of housing court cases. Non-payment cases boil down to one factor – does the tenant have the funds, either on their own or from governmental rental assistance programs, to pay the rent? The answer is no – not because the rent is too damn high, but rather tenant income is too damn low.

Levine also conveniently fails to acknowledge that the number of evictions in recent years have actually declined by 24 percent, according to the city’s recent “Turning the Tide on Homelessness” report – not because of the increase in the number of tenant attorneys in housing court or the increase in right to counsel funding, but because rental assistance has never been higher for tenants who face eviction due to non-payment of rent. The city has increased rental assistance by 200 percent from 2011 through 2016.

With annual expenditures of more than $100 million on lawyers, $200+ million on one-shots, and millions in funding for the Family Eviction Prevention Program – coupled with the decline in evictions – why then are homeless numbers surging? The answer: Perhaps because homelessness has nothing to do with housing court.

The fact is, even with all of the free legal representation available, it’s not keeping low-income tenants in their homes – because no matter how low the rent is, these tenants still need even more government subsidy.

This begs the question: Why isn’t Levine, Mayor Bill de Blasio, City Council Speaker Melissa Mark-Viverito, the City Council and Democrats in the state Assembly supporting the Hevesi-Klein “Home Stability Support” initiative proposed by Assemblyman Andrew Hevesi and State Senator Jeffrey Klein?

This proposal would directly address the city’s record homelessness by providing a federal and state-funded rent subsidy for tenants who are facing homelessness or eviction. It’s a solid rent relief program – and a real cure for homelessness – that would keep the poorest and income-challenged families in their homes.

The Right to Counsel bill will also require a huge increase the number of judges, law secretaries, clerks and other staff to avoid the administrative quagmire that has already begun to strangle housing court. Housing court gridlock does nothing for tenants, who lose days of wages from missed work, or small owners, who are denied the rental income they need to repair, improve and maintain their buildings and pay property taxes and water rates that de Blasio has raised 17 percent and 12 percent, respectively, since taking office.

Isn’t it time that the mayor and City Council realize that working with the 25,000 owners of 1 million rent-stabilized apartments in the five boroughs – the largest providers of quality, affordable housing and one of the city’s major economic engines in good times and bad – are part of the solution, and not the problem to homelessness and other housing issues?

Until Levine and other politicians realize that throwing good money after bad to fund politically expedient, minimal impact programs like the Right to Counsel – rather than support sound initiatives like Hevesi-Klein Home Stability Support – tenants and owners can just expect more politics over policy when it comes to affordable housing.

New York Housing Crisis Overshadowed by California Emergency

It is no secret that affordable housing has become a hot topic in New York City and the centerpiece of many elected officials’ campaign platforms.

In comparison, however; the housing crisis in California is far worse than any state in the country. Imagine being a nurse, making $180,000 per year, and still having to live two hours away from your job because you cannot afford to live anywhere near it.

The affordable housing crisis is not just a problem in New York City.

Mayor de Blasio Hypocritically Touts Another Affordable Housing Development

Mayor de Blasio recently announced another “affordable” housing project that blatantly runs counter to housing policy directions he has strongly supported.

The Mayor has consistently voiced his opposition to the “two door” policy in which publicly subsidized affordable housing developments provide two separate entrances: one for market rate apartments and another for the “affordable” housing units.

In a recently announced housing development in Brooklyn Heights won the right to build market rate apartments above a public library but the “affordable” housing units will be built ‘offsite’, that is, in a totally different neighborhood. Offsite housing runs counter to another strongly held de Blasio belief: that subsidized market rate developments should further the goals of income equality and economic integration by offering “affordable” housing in the same development.

Even though this project clearly runs counter to the basic housing policies the Mayor is pushing city-wide, housing advocates have stayed conspicuously silent on the Mayor’s hypocrisy on this particular housing development approval.

On the Backs of Rental Property Owners, Mayor de Blasio Promotes his Rent Freeze

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.

Comptroller’s Report Fails to Recognize Overcrowding Issues

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.

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.

Why Building Affordable Housing Will Not Solve the Affordable Housing Crisis

Megan McArdle, a reporter from Bloomberg View, gives her take in two well-written articles on the pros and cons of gentrification in major cities and specifically touches on the effects it has on New York City. The first article focuses on traditional housing projects, voucher holders in rent subsidy programs, inclusionary zoning, and why rent control doesn’t actually work.

The second article gives an in-depth look on the lack of power that government has in creating more affordable housing in the face of the ever-increasing demand for more units. Ms. McArdle says that the dream of adding new, affordable units while gentrifying the way some cities (such as New York City) are, is simply just a nice, but unfeasible dream.