Please, We Need a Balance
A recent New York Post editorial entitled “If Supreme Court nixes NYC rent control, tenants and landlords would be better off” made some good points, but also assumes a bit too much as well.
The editorial states:
“An empty-nester with a three-bedroom may stay put rather than downsize, while a family of four must crowd into a one-bedroom — or leave the city altogether. Landlords, meanwhile, don’t make upgrades or sometimes even needed repairs because the rent caps keep them from recouping their expenses. Tens of thousands of units go vacant because landlords can’t earn back enough to bring the units up to code” (NY Post Editorial Board, ed. “If Supreme Court Nixes NYC Rent Control, Tenants and Landlords Would Be Better Off.” New York Post. New York, August 27, 2023).
This is all true. In my experience, people rarely leave rent stabilized apartments and whole families do crowd into a one-bedroom apartment. Many landlords have also been forced to leave apartments vacant due to the NYS Rent Laws of 2019, which destroyed the profitability of rent stabilized buildings.
While rent stabilization is an imperfect system, it is needed. Assuming that the Supreme Court chooses to hear the case and strikes down rent stabilization, rents are not going to lower for anyone. Anyone who says otherwise is delusional at best. You cannot trust the market to miraculously lower rent prices if rent stabilization were suddenly found unconstitutional. If ever allowed to increase rents on rent stabilized tenants to an amount of their choosing, landlords will do so while continuing to raise rents on apartments that are presently market-rate. The cost of things rarely decreases and to imagine that New York City landlords are going to be content only stuffing money in their pockets rather than in any and all available space within their clothing and within their bodily orifices is unrealistic. Greed is real and there are greedy landlords in New York City (as well as some good-hearted, empathetic landlords); therefore, tenants need protections. Should the Supreme Court decide to hear this case and potentially overturn rent stabilization, it would be catastrophic for working and middle class tenants in New York City.
A balance must be found. Rent laws were too lax for too long and oversight of deregulation almost nonexistent, then in 2019 the pendulum swung too far (to a ridiculous degree) in favor of tenants. In my opinion, what is needed is common sense when it comes to rent stabilization. Instead of the Rent Guidelines Board debating an appropriate percentage that satisfies no one and angers everyone, why not try a flat fee and make it those flat fees permanent or rise with inflation? Perhaps start with $50 for a one year lease. $75 for a two year lease. $100 for a three year lease. For those of you who do not know your history, three and four year leases were once allowed in the 1980s. Why not bring them back? For tenants who cannot afford those increases, why not create a tax abatement program similar to SCRIE or DRIE for which those tenants can apply? With such a program, the landlord would get a tax break, the legal rent would increase (thereby increasing the building’s value), and the tenant’s rent would be frozen. Another possibility is staggering rent increases based upon tenants’ rent amounts and provide only two-year leases for rent stabilized units. For example, rents under $1000 would pay a 20% increase, rents between $1000 and $1500 would pay a 15% increase, rents between $1500 and $2000 would pay a 10% increase, rents between $2000 an $2500 would pay a 5% increase, and anything over $2500 would pay 2.5% with rents over $3000 being frozen. It may not be popular but it will certainly be equitable. It might limit landlords’ profits over the long term but they’d still profit. The State should also raise or remove the cap for individual apartment improvements and make those improvements permanent (once again) while keeping the new oversight that was put in effect. Any of these suggestions would remove landlords’ inability to refurbish and renovate dilapidated apartments and allow these to re-enter the housing stock. Please don’t misunderstand me. These suggestions would not solve the housing stock problem alone. There absolutely must be development to create new housing stock as well whether through building more rental units (which would require incentives from the State for builders to build) or through rezoning to allow for residential development in traditionally commercial areas.
Regarding rent controlled tenants, they are not the same as rent stabilized tenants. Under rent control, a tenant must have been continuously living in an apartment since July 1, 1971, or be a qualifying family member who succeeded to the tenancy and has lived in the apartment continuously for at least two years prior to the death of the original tenant. These tenants have their rent increased based upon the Maximum Based Rent (MBR) and the landlord may increase their rent by 7.5% every two years until reaching the MBR. This is different than rent stabilization. According to the Rent Guidelines Board, while there are over 1,000,000 rent stabilized tenants, there are only around 16,000 rent controlled tenants. Most of the original rent controlled tenants are dead and many of their successors are well over 50, why not limit succession rights to a single generation after the original tenant and then shift those 16,000 rent controlled tenants to rent stabilization or market rent depending on the size of the building?
Having said all of this, I find the inclination to bring laws that benefit a majority of people before the Supreme Court with the hopes of the Court overturning these laws to be troublesome. As a nation we need to stop relying on an unelected Supreme Court to do the work that our Legislatures should be doing. If I can come up with some halfway decent ideas in 15 minutes, I would like to think our elected officials can do far more and come up with far better collectively and individually. After all, isn’t that what they’re paid to do?
Till next time.
Your Friend,
John.