Blame politicians — not landlords — for skyrocketing NYC rentsBy Howard Husock
February 23, 2022
It’s tempting to blame greedy landlords for skyrocketing rents in Manhattan. The median price of a one-bedroom apartment is up 25% and a two-bedroom 27% from last year, with some tenants telling The Post of even higher hikes: One West Village studio is going from $2,696 to $3,950.
But those who see this as price-gouging that should be illegal overlook a crucial fact: Many such increases are already illegal — and that’s actually the heart of the problem.
Rent regulation affects 960,000 of the city’s 3 million housing units. Rents on these apartments are not increasing this year at all, thanks to the city’s Rent Guidelines Board. A good deal for the current occupants, to be sure — but these price controls distort the overall market and lead to eye-popping rent increases on the few non-regulated units that remain.
Here’s why.
The lucky occupants of rent-stabilized units, not surprisingly, tend to stay put once they’ve effectively hit the housing lottery. That helps explain why Gotham — once known for welcoming ambitious newcomers — has the lowest housing turnover of America’s 10 largest cities. I call this the “frozen city” phenomenon: Regardless of their capacity to pay a higher rent, households protect their good, rent-regulated deals even if they no longer need the space. Think of the boomer couples on Central Park West with empty bedrooms.
It’s not a real housing market — it’s a variation on musical chairs. Those left standing when the rent-stabilized vacancies are filled must enter the scrum for vacant, market-rate, non-regulated units. It should surprise no one that as housing demand rebounds (a good thing), asking rents will rise for those units. It’s what housing scholar Peter Salins has rightly termed “scarcity by design.”
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Source:
https://nypost.com/2022/02/23/blame-politicians-not-landlords-for-skyrocketing-nyc-rents/
