Pataki to NYC: control rent
TUCKER, WILLIAM
Pataki to NYC: Control Rent by William Tucker At midnight, June 16, New York City stepped out from under rent control for the first time in 50 years. Five minutes later, like groundhogs frightened...
...Yet even this glacially paced phase-out was unacceptable to Sheldon Silver, the speaker of the state assembly and de facto spokesman for New York City's 2 million rent-regulated tenants...
...See the Cato Institute's "How Rent Control Drives Out Affordable Housing," published in May...
...Mayor Rudy Giuliani, who supported rent control throughout, was promising to bop a landlord on the head every time he walked down the street...
...Manhattan and Brooklyn prosecutors Robert Morgen-thau and Charles Hynes had set up special task forces to fine and imprison landlords for "harassment" (often a synonym for "trying to collect rent...
...This tax-and-debt burden is driving away even the hardiest businesses...
...For six months, Bruno had kept New York City on tenterhooks by threatening to let rent regulations expire on June 15...
...William Tucker is a writer living in Brooklyn...
...Prices for these apartments are driven sky-high...
...As a result, young people cannot even think of moving to New York or San Francisco today without spending months looking for an apartment and years living in cramped, almost unlivable quarters...
...No tenant ever moves, and when they die, they pass the apartment on to the nearest relative...
...After months of frustrating negotiation, Pataki, Silver, and Bruno emerged from the state capitol building at five minutes after midnight to announce that rent control would be extended for another six years—just beyond the end of Pataki's assumed second term...
...True, Pataki had the rent-control issue thrust upon him by Bruno, who has no higher ambitions and wanted the end of rent control to be his legacy...
...Tenants groups had set up 24-hour phone banks to advise tenants of their rights under the city's myriad tenant-protection laws...
...Ambitious young people, who have always been the lifeblood of the city, are tiring of paying three times the rent of other cities just to be near Lincoln Center and Carnegie Hall...
...New York's flirtation with free enterprise was over...
...The city spends more money to warehouse abandoned apartment houses than it spends on the New York Public Library...
...Over the past two decades, New York has lost 80 percent of its Fortune 500 headquarters...
...Instead, New York continues its drift away from mainland America and toward France...
...The scarcities that have driven Manhattan rents through the roof might have abated...
...Although the median rent is $620, the median rent for housing advertised in the New York Times in April was $1,400, and the most commonly advertised rent was $2,000...
...Boston just did it and is already experiencing a building boom that will alleviate its rent-control-induced housing shortages...
...By trying to placate tenants and showing no faith in the free market, Pataki has abandoned New York to a dismal future...
...By the time the first lease renewals came, around October, some of the 50,000 apartments being "warehoused" by their owners might have come on the market...
...Landlords—well organized for once—had promised to be reasonable in asking for increases...
...Consequently, everyone looking for a new apartment ends up chasing the one-third of the market that is unregulated (smaller buildings, buildings built after the regulations went into effect, rented condominiums...
...So Silver won the stare-down...
...The housing market is now in what might be called "advanced rent-control rigor mortis...
...But what's the sense of being governor if you're not going to lead...
...George Pataki and state senate majority leader Joe Bruno went scurrying back into their holes...
...The pity is that New Yorkers were actually getting used to the idea that rent control might not go on forever...
...But the immediate impact of letting the rent laws lapse probably would have been nil...
...His condition was that the Democrat-controlled state assembly agree to phase out those regulations sometime in the foreseeable future...
...Pataki, who tried for a while to remain neutral, was eventually drawn into the fray...
...A "vacancy allowance" that would permit a 20 percent increase when an apartment changes hands...
...What is happening in both cities is that the two-thirds of the rental market occupied by regulated tenants has become frozen...
...Silver refused to accept the vacancy-decontrol compromise precisely because it might have ended rent control at some point in the 21st century...
...Nearly all tenants are covered by leases, and landlords are required to give three months' notice before offering new leases...
...After three months of seeing that the sky didn't fall without rent control, it might have been possible to discuss the subject rationally...
...The current allowance, set annually by the Rent Guidelines Board, usually runs about 6 to 8 percent...
...Companies found it impossible to persuade employees to move to New York because of housing shortages...
...New York City has spent $10 billion on housing over the past decade in an effort to make up for the private investment lost because of rent control...
...Five minutes later, like groundhogs frightened by their own shadows, Gov...
...Instead, Pataki and Bruno's capitulation will only drive New York City further down the road of self-destruction...
...Unemployment rates are at a European-style 10 percent while the rest of the nation has dropped below 5 percent for the first time since 1973...
...Silver's one concession...
...It is almost impossible these days to find a studio apartment in Manhattan for less than $1,500 a month...
...This system, Pataki obsequiously assured everyone, would "harm no existing tenants," but might eventually lead to an end to rent control some 30 or 40 years down the road...
...San Francisco, the nation's only other major rent-controlled city, has the exact same high-rent profile...
...His compromise proposal was "vacancy decontrol," whereby controls would be lifted on apartments newly vacated...
...It was a remarkable capitulation...
...The odd thing is that, through all the stumbling and bumbling of the last six months, Pataki and Bruno had ended up facing what may have been the best of all solutions—overnight decontrol...
...Everybody takes these to be "market prices," but they are actually the artifacts of rent control...
...In San Francisco, one-bedroom apartments rent for $2,000...
...In non-rent-controlled cities, units advertised in the newspapers invariably cluster around the median rent for that city (usually between $450 and $650...
...A three-to-five-year phase-out would have been preferable, but given Silver's intransigence, the plum of overnight deregulation was there for the picking...
...Although the hysteria had risen to a fever pitch (many people seemed to expect that evictions would begin Monday morning), the newspapers, for the first time in memory, were openly speculating on what life might be like after rent control...
Vol. 2 • June 1997 • No. 41
