Myths vs. Facts about Rent Regulation
MYTHS PROMOTED BY LANDLORDS
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FACTS
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If rents were de-regulated, free-market competition
would lower them.
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And only apartments in buildings with 6 units or more, built before 1974 are required to be
regulated. In the 38 years since,
landlords have built thousands of luxury units - and sometimes voluntarily included
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Poor landlords are suffering – unable to meet their
expenses.
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The NYC Rent Guidelines Board meets annually to
consider owners’ costs (including the cost of living, fuel, staff wages, taxes and the "economic condition of the residential real-estate industry, the housing supply, and vacancy rates") to ensure that
leases renewed the following year will cover those costs and a profit.
"The RSL [Rent Stabilization Law] fosters stability in the rental-housing market by controlling the pace of rent increases in regulated apartments, while ensuring that landlords are able to earn a reasonable rate of return." March 2012 Brief from the NYS Attorney General to the U.S. Supreme Court, opposing landlord James Harmon's petition for the Court to take his case and rule NYS rent regulation unconstitutional.
Most real estate is owned by only a few big landlords:“12 percent of the city's landlords own 70 percent of the
rent-regulated apartments -- a group of less than 3,000 owners, with an
average of 238 apartments each. " Met Council
on Housing. See also Quora.com:
As of 2011: “Most of the real estate in Manhattan is owned by a handful
(perhaps 30-40) of long-standing real estate ‘families.’"
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Rich tenants are luxuriating in cheap apartments.
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Rent-regulated apartments are occupied by people whose median income is
$38,000 a year. The media report
the few rich people in regulated apartments because they are rare -- the “man
bites dog” story – and because the media take advertising from big real estate.
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Rent regulation should only be a subsidy for poor
people
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While most regulated tenants are poor or
middle-income, regulation is not a subsidy. It levels the playing field
between landlords and tenants.
Rent regulation "aims to ensure a fair and stable rental market by preventing the worst forms of rent profiteering that such a tight housing market would allow. . . . By regulating evictions and the pace of rent
increases, the RSL protects tenants, particularly the elderly and disabled, from dislocation, and limits the disruption to neighborhoods and communities that would result from dramatic changes in rental rates and rapid turnover of tenants year to year." March 2012 Brief from the NYS Attorney General opposing landlord James Harmon's petition for the U.S. Supreme Court to take his case and rule NYS rent regulation unconstitutional. “Rent and eviction regulation is a system of protections designed to preserve economic fairness, and to prevent disruption and dislocation, in a market where chronic shortages allow landlords to exert excessive bargaining power. Because this market failure affects all tenants, rent regulation should not be targeted by income.
Tim Collins (former Executive Director of the Rent Guidelines Board), Rent
Regulation – Buying Into the Rhetoric.
“The purpose of rent control and rent stabilization is to mitigate the
potentially disruptive and displacing effects of a chronic, severe housing
shortage in New York City and its surrounding suburbs. . .
Although rent
regulation is a form of consumer protection that protects tenants at all
levels of income, rent control and rent stabilization are especially
important to the tenants who are most vulnerable to the housing shortage –
those with low and middle incomes.”
Sheldon Silver, Speaker, NYS Assembly, and the Community Service Society, in The New Housing Emergency: |
Rent regulations favor tenants already there –
leaving the less lucky to pay more.
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Met
Council on Housing: “Rent
regulations do favor tenants who have been in the same apartment for a long
time, because their landlords have had fewer opportunities to exploit the
loopholes in the system (vacancy decontrol, renovation, illegal vacancy
increases, etc.)
“But the last thing deregulation would do is deliver
bargain rents to the "deserving poor." It would simply allow
landlords to raise the rents on those apartments – as they routinely do.”
More regulated apartments - without vacancy deregulation - would mean
more affordable apartments for the next batch of tenants.
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Rent regulation keeps development down
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Mayor
Bloomberg reports (2012) that development has soared. Most of that development
is skewed toward “luxury” renters - even as some developers choose to include a
few rent-regulated units in order to benefit from tax breaks. (Otherwise,
rent regulation only applies to apartments built before 1974.)
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De-regulating apartments would not hurt those who
live there already
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Because vacancy deregulation reduces the already dwindling stock of
affordable housing, there is no place for our children – and newcomers to New
York to live affordably. See Met Council
on Housing. The newly-built developments are filling up with groups of
roommates – the only way for the middle-class and poor to pay the rent.
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