Resource from Clio Chang at Curbed. (n.a.). https://www.curbed.com/author/clio-chang/. https://www.curbed.com/2023/03/good-cause-eviction-new-york-courts-losing.html
Call it good cause eviction or universal rent control, but the truth is a wretched legislative proposal by any name reeks just the same. A sincere and candid economist (preferably with one hand as President Truman liked them) will tell you that rent control is not a sound way to increase the amount of affordable housing as price ceilings create supply/demand disequilibrium. Sound economic theory be damned, however: the “give-them-what-they-want-and-then-some” Bernie Sanders has called for the need for “national rent control” while Alexandria Ocasio-Cortez—never one to be outdone when it comes to grandstanding and bloviating—demanded, “it’s time that we stop commodifying the housing market.”
Local judges, fortunately, are obligated to adhere to the rule of law and have ignored the politics on this issue. In cities such as Newburgh, Albany, and Poughkeepsie, judges are shooting down local measures aimed at limiting a landlord’s ability to increase free market rents on the rationale that cities simply don’t “have the power to draw a circle around [themselves]” and declare that “state laws [d]on’t apply” to them. That’s sound legal reasoning for sure (as good cause eviction is not the law in NY—it has been mired in legislative limbo for years). Sadly, however, the median household income in many of these cities is below $50,000 while free market rents have increased at a torrid pace (i.e., more than 50% in some cases) leaving many residents floundering on the brink of homelessness.
Rent control is in vogue because America’s housing market is increasingly unaffordable with real housing prices having doubled in NYC since 1970. Nationwide, 25% of renters spend over half their income on housing. Skyrocketing prices are the result of a demand-supply disequilibrium: housing demand across the US is outstripping supply by 370,000 units a year. Rent control is often presented as a solution to greedy landlords taking advantage of pinched renters—it takes aim at the landlord’s profits by limiting rents at below-market levels.
The problem of course is complicated and the fix isn’t simple. There has been a chronic lack of supply (newly built apartments) throughout the state but most notably in NYC. The issue is further exacerbated by the fact that nearly one-third of all units are rent-stabilized putting significant pricing pressure on the remaining available market-rate units. Furthermore, the population has increased by 800,000 people over the past decade but only 200,000 new places have been created for them to live. This isn’t a baffling Millenium Problem on the scale of the Poincare Conjecture, the math here is easy: New York hasn’t built nearly enough and the scale of new housing required to meet current demand is significant. Housing cannot become more affordable without becoming more available…meaning we need more of it. And wishing or wanting developers to build without the right economic incentives is as ludicrous as expecting to run a sub-4-minute mile with a daily diet of Double Trouble Bacon Bites and a training regimen that involves streaming endless hours of Succession.
The 421-a tax incentive worked. While in place, developers built an abundance of rental projects with 25% or more of these new buildings allocated to affordable apartments. It expired in June 2022 and legislators in Albany, to date, have yet to extend it or replace it with something similar. Local councilmembers share some of the blame too. In May 2022, Harlem Councilmember Kristin Richardson Jordan blocked the construction of a pair of two 363-foot-tall towers to be built in Upper Manhattan, known as One45, which called for 915 apartments, half of which would have been affordable. Ms. Richardson Jordan, however, wasn’t persuaded even after the plans were altered to include more affordable units. One45 isn’t dead, however; instead, the developers will build a combination of market-rate condominiums and a self-storage facility without any affordable housing. Way to go Ms. Richardson Jordan! That’s what the kids call a pyrrhic victory.
As time goes on, saying “no” to proposed development projects will—in this author’s view—become politically untenable. Governor Hochul and Mayor Adams certainly want to “build, baby, build” but the question remains whether the legislative dotards in Albany are on board or will they keep pushing for universal rent control, described by the socialist economist Assar Lindbeck in 1977 as the most efficient technique known for destroying cities “next to bombing.”
Chang, Clio. “Good-Cause Eviction Keeps Dying in Court.” Curbed, 30 Mar. 2023, www.curbed.com/2023/03/good-cause-eviction-new-york-courts-losing.html.
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