Rent Board Chief on Shifting Onus from Landlords
The Observer ran an interesting interview yesterday with the head of the Rent Guidelines Board, Marvin Markus, that lays out some of the common-sense problems with rent control and stabilization. If we as a society deem it worthwhile to subsidize certain people (and clearly there are lots of reasons to do so), then the cost…
The Observer ran an interesting interview yesterday with the head of the Rent Guidelines Board, Marvin Markus, that lays out some of the common-sense problems with rent control and stabilization. If we as a society deem it worthwhile to subsidize certain people (and clearly there are lots of reasons to do so), then the cost should be borne by society as a whole not individual landlords, argues Markus. “There are poor tenants, they should be protected, but the individual owner is not the one that should protect them. The population at large clearly should be the ones footing the bill,” he says. And how would be do that? “One suggestion is a rent tax/surcharge of some limited amount, on all rents in the city … and all co-op and condo charges in the city. … It’s very important for the city of New York that there be a mixed income base—from an economic standpoint; from a social standpoint—and we want to make sure, I want to make sure, that that continues.” While landlords make easy political targets, it’s hard to make any rational arguments in favor of the current system: Lifetime entitlements makes no sense at all; nor does a system that dis-incentivizes landlords from maintaining the housing stock.
Rent Board Chief Markus Pleads for ‘Rationality’ [NY Observer]
Photo from the Tenement Museum
bxgrl – that reminds me. Do you know how many apartment building owners in NYC and the suburbs quit the business and sold them to coop convertors because they couldn’t make a decent profit? Or torched them in the South Bronx and East New York? Had there never been rent control and rent stabilization there would be hundreds and hundreds of thousands of more rental units on the market. One-bedrooms in Manhattan would be $1,500 not $3,000.
And rent control nearly destroyed NYC in the 1970’s. Lessons are never learned.
Oh yes, bxgrl, there will be middle class in New York City!
My parents came to this country 17 yrs ago, a family of six bringing $1,200. Took blue collar jobs – I don’t think they ever made more than 50k per year combined. Yet now they are proud owners of a coop apartment, no mortgage. How did they do it? Sweat and blood, and never eating out, and my mom never spent more than $20 on shoes… you get the idea. RC and RS suck out the money from the NYC tax base – that’s the money that would go to pave the sidewalks in front of the building where my parents live or extend the hours of the local library. That’s the money taken from my parents.
It’s the families like them that made their building what it is now, not the leeches who smile at them in the hallways because their government protected rent is less than the maintenance for the comparable apartments.
Bxgrl;
I do not favor Markus’ plan, as I stated above. Basically, I am in favor of dismantling the whole RC/RS system over time, and I believe SuburbanDude’s plan is the most sane. It quickly weeds out the abusers, and then allows vacancy decontrol to do the rest, over time. As I also stated above, I believe in a social safety net, and we have such a system in the form of the Earned Income Credit, Section 8 vouchers, affordable housing subsidies and public housing. These are fine. Government regulation of the pricing in the private housing market is not. No other large city has such a system, and they get along just fine. Boston did away with tis system about 15 years ago, and no large-scale dislocation took place, despite the warnings of those with an entrenched interest in the previous system.
I do not blame rent control/stabilization for the loss of the middle class. My point is that it has done nothing for the middle class, as Tybur6 pointed out well above.
rent control threads are so boring.
Marvin Markus is 100% correct -the problem is that RS is being used as a method of maintaining affordability – when it was designed to be a system to maintain stability (get it – thats why its so named)
The idea was that in a city of limited housing families shouldnt be displaced because of massive inflation due to the whims of the marketplace (i.e. your neighborhood becomes hot and all of sudden they raise your rent by 50%)….frankly I think it is a legitimate goal.
It makes ZERO sense that if you live in a marketrate apartment your LL can double your rent overnight but the tenant living across the street (potentially paying MORE) but under RS will have his/her rent only raised 4%…..
Markus solution is essentially vacancy decontrol and then RS of EVERYTHING – which thereby protects ALL from the whims of the marketplace (which in terms of housing may be a reasonable goal)
It is no less traumatic for a family paying $2500 (non-RS)for an apartment to be forced out then it is for someone paying $1900 (RS)
As for etson point about LL knowing the deal – this is ridiculous….if you buy a home in a non-landmark, limited height restricted district -(like most of Park Slope until 2004) and a developer wants to build a 15 story building next door to your row house – should the Govt not consider zoning changes because “you knew the deal”; should Govt workers never get a raise (or conversely never have their retirement plans adjusted) – because that was “the deal”.
No one is proposing any windfall for the LL lobby (if Markus plan was followed – it wont be – market rate owners will immediatly fall under RS, which will be a huge hit for them)…but if “the deal” is not working or is being totally perverted in its result then Govt has an obligation to “change the deal”.
Oh and BxGirl – under RS – a tenant (who does not make over 170K) dos have a LIFETIME interest in their apartment, an interest that is transferable upon death to any family memeber dwelling in such unit for their LIFETIME.
benson- excuse me- did you not read what I posted? :
“There’s plenty of people who abuse the privilege of rent control and that should be stopped. No question”
And since you think suburban dude os so dead on the money, why can’t he distinguish between rent control and rent stabilization? There’s a big differnce.
And do you believe renters should subsidize other people’s landlords- because I am not living in a rent-controlled/rent stabilized apartment.
Not only that- but the blaming of rent control and rent stabilzation for the loss of the middle class is ludicrous. Just look at the pricing on new apartments or decontrolled ones. That’s why the middle class is leaving- and its called “market rate.”
See- this is why conservatives piss me off (as much as I love you). It’s all about money and free market and the hell with people.
“””In 10 to 20 years we will have a 95% market rate rental market.”
And no middle class….”
This is why I can’t take NYC liberals anymore, and why I should get out of this town.
Yes, we can all see what a BANG-UP job rent control has done in keeping NYC a middle-class city!!!! This system has been in place for 60 years, and what are the results? Only last week, Brownstoner ran the results of a study that showed that NYC has the SMALLEST proportion of its population belonging to the middle class.
Where is the accountability for this system?
Bxgrl, since you are a proponent for it, let me ask you some questions, going back to SuburbanDude’s points:
-Do you believe there should be an income limit for someone benefitting from this system? What should that income level be?
-Do you believe that someone owning property should benefit from this system?
-Do you believe that someone who has liquid assets over -say – $100,000 should benefit from this system?
Suburbandude, I am not voicing support for rent stabilization. I do support a safety net for those at the bottom financially but I agree that this safety net has been abused to the point that it needs to be reformed. But Maly is exactly right – to reform the system in the way suggested is a one time windfall for the people who bought the buildings at a cheaper price because of restrictions and would then enjoy better cash flow with the restrictions removed. And that’s just not right.
New York’s problem is the people in the middle… the majority of folks on this board are in the “wealthy/comfortable” range… you can afford $3000+ rent or mortgage payments.
Then there is the poor. There is public housing and other programs — no judgment on the quality of any of this, just saying it exists.
Where NYC is failing is in the middle. Folks with decently paying jobs (middle management and skilled workers), but can’t actually afford to live here. This is the middle-aged person making $55k a year… housing options are very limited and this rent tax makes them even worse!!! It benefits he poor and has no real negative impact on the rich/well-heeled.
It’s the donut hole. The tuition increases at CUNY and SUNY are the same thing. The poor have Pell and TAP grants that cover the increases in full. The wealthy don’t even notice… it’s the kids in the middle that have to find an “extra” $1200+ a year (usually in debt or working more, which takes away from their studies).