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<< Poll Illiteracy | Main | Jon Stewart Sums up Davis >> September 24, 2003Rent Control Increases Housing CostsNow, in principle I think rent control is great-- people shouldn't be driven out of their homes because the neighborhood gets richer and they don't. Landlords getting the profits from increased real estate values is a bit of a scam to begin with since they are benefitting from social progress in a neighborhood, not their own efforts (go read Henry George). And I don't buy the conservative arguments that rent control prevents developers from building new housing. First, in places like New York City, new housing is exempt from rent control. Second, developers want to build far more housing than they are allowed to in the City, so the argument doesn't hold water at all. There are some moderately interesting studies by folks at the Manhattan Institute that benefits don't flow to the poorest residents, but that's mostly an argument for reforms in the rent control formulas. No, in principle and in a lot of historic practice, I think rent control is a great and needed thing. It's not sufficient unto itself, but as long as other public policy encourages new housing to be built to assist those who don't already have rent controlled apartments, rent control is fine. They've Got Theirs: Unfortunately, I've become more convinced over time that rent control leads a lot of people to opposing building new housing and supporting restrictive zoning laws. If rising rents in their neighborhood was a personal threat, they'd be marching in the streets to encourage more housing to relieve demand and push rent prices down. But with rent control, they face no threat of their own rent rising. They've got theirs, so new housing can only block their views, so they lose any incentive to support new housing. On this one, the economics of rent control are fine in my opinion, but the politics of it are creating a form of NIMBYism that is making New York City even more unaffordable. New York has a housing crisis that is making it uninhabitable for poor families and hardly livable for the middle class. The Housing Crisis: Here are some numbers from Housing First! I don't want rent control repealed--- I think it's too vital to many families that depend on it. But when I see those benefitting from it trying to pull up the affordable housing ladder behind them by blocking new housing for others, it really does outrage me. When there are no more homeless families in the shelters and working families aren't paying half their wages for housing from where they then have to commute an hour on the train to their jobs in Manhattan-- then I'll have some sympathy for preserving "context" zoning or other NIMBYish gentrification programs. Until then, I basically oppose all anti-development zoning in the City. Update: City Comforts thinks "anti-development" zoning is too vague. I think I was relatively clear in the other linked post that my objection is to height restrictions and any zoning that try to limit the amount of housing produced per square foot. The reality is that given the costs of land in New York City, restricting the height of a building means that the fixed costs of the land has to be divided among fewer apartments, driving the costs up per apartment. So height restrictions are a very direct enemy of affordable housing. City Comforts wants to argue that local owners and renters "have an absolute ethical, legal right to protect what they believe is theirs." I contest both propositions. I think it is immoral for the haves to protect their interests-- sustained only by the community support of rent control-- at the expense of others who are in a worse off position. And legally, they have no basis to oppose such development-- there is no legal loss if local development makes your property less valuable, just as there is no legal obligation to turn over the increased value of your home to the community if it becomes more valuable due to civic improvements. I'm not the enemy of all zoning in every instance, but nine times out of ten, in both suburbs and cities, it has become a tool of the haves to zone out the influx of the have-nots. Posted by Nathan at September 24, 2003 05:26 PM Related posts:
Trackback PingsTrackBack URL for this entry: CommentsGreat! Posted by: David Sucher at September 25, 2003 10:32 AM Eh, natan, do you have any evidence that opposition to new development is correlated with rent control. Seems to me that you'd be hard-pressed to find an affluent neighborhood anywhere in the country where new construction of affordable housing wouldn;t face opposition, rent or control or not (usually not). And even if we're going to argue the question on the abstract level you posed it, keep in mind that the effect on landlords'/developers' incentives is the opposite as on tenants'. I agree with you that the housing problem is a problem requires additional construction, and that many progressives end up on the wrong side in the name of opposing development or gentrification, but I think you've given into your occasional bad habit here of creating a conflict where none really exists. Posted by: jw mason at September 25, 2003 02:13 PM Sorry for all the typos. You know what I meant... Posted by: jw mason at September 25, 2003 02:14 PM I have to retreat to anecdote and the basic incentive structure I outlined-- I just have met too many rent-control New Yorkers who oppose development in their neighborhoods and it's clear that the lack of fear of their own rents rising due to scarcity of housing assists the attitude. In most communities, the constituency for affordable housing is both those without housing and those who feel pressured because of rising rents. New York removes those under rent control from the constituency for affordable housing. As I said, I'm for rent control-- I just think there are real political costs to it when unmoored from a broader coalition for affordable housing. Much like environmental development controls may be worthwhile in general, but are harnessed at times to NIMBYist campaigns. Posted by: Nathan Newman at September 25, 2003 02:42 PM Nathan. Posted by: David Sucher at September 25, 2003 09:49 PM Why does NY need to go higher? Cramming more people into the same area will reduce the quality of life for everyone with traffic problems, parking, etc. It would be much more sensible to invest in updating a mass transportation system that was built in the 1920s. Also, routing traffic around Manhattan would allow the other parts of the city to grow without further concentrating it all downtown. For instance, a long planned tunnel from Brooklyn to New Jersey would allow for people to get to NJ (and South and West of there) without going through Manhattan. Posted by: Kerim Friedman at September 26, 2003 12:20 AM Followup: I've never been a big advocate of "free markets" but Paul Krugman, who is usually pretty sensible, seems to feel that rent control is a bad thing. I'd be very interested in knowing if there are any good critiques of his position. Posted by: Kerim Friedman at September 26, 2003 12:26 AM If the Federal government still funded low-income housing -- as they did before the Regan administration -- then the housing stock would be larger, and more of it available to lower-income people. Rent control may stop new buildings, if people shout "not in my backyard" -- but at least it protects a small segment of lower-than-market-cost housing. Posted by: MS at September 26, 2003 01:26 AM rent control stinks. example. My father and my uncle own a small apartment building (six units) atop their store in brooklyn, ny. Some of his tenants are people who have lived there before they bought the place in the 70's. and pay.... $200 a month in rent for a 2 bedroom apt! He loses money on the property. another tenant put a washer and dryer in (not allowed in the lease) and btw, this tenant was/is on welfare. the washer broke leaked through the floor to another unit and caused massive damage. The welfare tenant (who can afford a washer and dryer?????) called her social worker and sued in the NY kangaroo courts. My dad had to provide the families with alternate housing until the damage (that she caused!) was fixed. Where'd the money come from? not from the tenants, what would $200 dollars pay for? (and that includes utlities!). I know they are not alone. btw, if they drop t heir garbage out the windows of their apartments and leave it on the street, guess who gets fined! yup, the building owner! There's no government giving grants to owners of rent controlled properties. and YOU CAN'T kick them out either. Posted by: Tt at June 18, 2004 09:16 AM Post a comment
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