Chris Quinn and donuts
Hey, AHB, is it time for Left Behinds to get into some serious muckraking? Maybe you should go heckle Chris Quinn at this event next week. Free donuts.
Tags: new york, christine quinn, rent control, rent stabilization, economics
Tags: new york, christine quinn, rent control, rent stabilization, economics
posted by Solomon Grundy @ 3:49 PM
13 Comments:
At 4:07 PM,
Antid Oto said…
What has given you this idea that I ever go heckle people at public events? Have you ever known me to heckle? I prefer lobbing anonymous bombs from the safety of the internet.
At 5:53 PM,
Solomon Grundy said…
I want you to heckle. It's good to vocalize your discontent.
What would you ask if you went? I'd ask her to reconcile her support of the new Yankee Stadium with her previous negative statements about stadiums in general.
At 10:37 PM,
Antid Oto said…
I'd probably ask if she planned to do anything to get any form of rent protection reinstated. Why can't we have rent stabilization anymore?
At 11:05 PM,
Solomon Grundy said…
Did you ever take an econ class in college? (I'm not asking that facetiously) In almost every econ textbook's first chapter they use NYC's rent stabilization as an example of counter-intuitive economics at work (arguing that it's responsible for high NYV housing costs, which, of course, is utter bullshit, since the model they use is particularly irrelevant in the peculiar NYC housing market).
After a generation or two of that propaganda, no public officials will dare broach reinstating rent stabilization, for fear of being labelled a paleo-liberal.
At 11:18 PM,
Antid Oto said…
No, I didn't, but I've heard the argument run something like this: rent stabilization constricts the supply of housing, providing a disincentive to build by reducing the maximum possible profit. As you say, in New York today that's just crap. This isn't the 1980s, when (a) rents weren't nearly as exorbitant city-wide and (b) there was a lot of unused land lying around. Today nearly all the vacant land in New York is used up.
I actually wouldn't propose rent stabilization, exactly, but the city really should pass some form of inclusionary zoning power, with affordability terms long enough to really make a difference (that is, at least fifteen years). You want to build another 300 luxury condos on the Husdon river, Mr. Trump? Fine. Fifty of them have to be affordable and stay that way.
At 12:37 AM,
Josh K-sky said…
When you guys say you don't have rent stabilization anymore, does that mean that there's no control whatsoever? For example, California no longer has vacancy control, so when you vacate your apartment the landlord can raise it to whatever the market will bear. But LA has rent stabilization, as we call it, which means that the landlord can raise the rent a maximum of 3% per year until a tenant moves out. It applies in units that came on the market before 1978 only.
At 2:07 AM,
Solomon Grundy said…
I was getting sloppy with my terminology, because it's a confusing system. NY does have rent control and rent stabilization, but very very few apartments are rent controlled, and there were reforms in '97 that effectively gutted rent stabilization for a lot of people.
According to the Economist magazine, 2/3 of housing is regulated in some way, but in fifteen years in NY, I've only met a few people in rent controlled apartments and not that many in rent stabilized ones.
Here is a typical summary of the argument against price controls. There are some definite problems with rent control, and yes, inclusionary zoning is a more direct way of getting affordable housing.
But this economic argument against rent control is flawed. For one thing, as ABH said, Manhattan is not Cambridge (the example cited in the article). There's really nowhere to build but up, and even that is limited. Manhattan could never be a free market because the supply is so constrained by geography and other facors (not including rent controls).
At 3:19 AM,
Antid Oto said…
It's not just Manhattan anymore. Building in Manhattan below Harlem has always pretty much meant building up, but since the 1990s many, many abandoned buildings, vacant lots, and former industrial spaces in the outer boroughs have been built on too. Remaining land is extremely valuable--which is part of why the Atlantic Yards giveaway, with its pittance of affordable housing, is such a shondeh.
I find it very hard to believe that there are actually tons of investors who would love to build rental housing in New York at exactly the prices that are charged now (or lower!), but they're being held back by fear of rent control. For one thing, new apartments aren't regulated. For another, no one seems to want to build rental housing. All I see is new luxury condos for sale, and that's in an incredibly tight market where landlords can essentially set their own prices.
What I find more convincing is the idea that price controls leave consumers locked into their apartments, depressing the vacancy rate. (I love how the Economist pities the grandmother in her huge pre-war apartment. Poor thing. It's lonesome in there. There's an echo.) On the other hand, if we had a totally free market it is almost certain that the only housing for the poor would be absolute slum-condition buildings.
At 5:00 PM,
Josh K-sky said…
I am totally that grandmother. I got into my apartment for $800 in 2000; it was slightly below-market then, but now I'm easily paying less than half of what it would go for on the open market. (It's gone up to $900. AHB has seen it; you know whaddI'm talkinabout.)
But what's the problem with this? Presumably, people are going to move out of an apartment if a) they buy a house b) their finances change and they need to reduce or c) they move. A) and C) aren't really affected by rent stabilization, and while b) is, it is also mitigated by it. So that seems like an effect, but not a very important one.
At 5:03 PM,
Josh K-sky said…
By c) they move I mean "they get a job that requires them to move to a different city", not "people will move if c) they move." Which could be a form of very basic question-begging.
At 5:17 PM,
Antid Oto said…
You still only pay $900 for that place? You should never, ever buy a house.
At 10:57 AM,
Solomon Grundy said…
if we had a totally free market it is almost certain that the only housing for the poor would be absolute slum-condition buildings.
Yes, exactly.
Economists, or, really, econ majors who then become i-bankers and captains of industry and that sort of thing, always use themselves and their bourgeois friends as their universal man in their models and thought experiments (query: is a thought experiment conducted by a brain-dead econ major an oxymoron, emphasis on moron?). The effects of these policies on the unwashed masses are only considered as an afterthought, if at all.
That's a sweeping overgeneralization, but I think there's some truth to it.
And yeah, there's something sub-optimal about consumers being locked into apartments, but that's better than the alternative.
I'm sympathetic to the argument that landlords are not bearing any of the costs of rent control, instead shifting the costs to non-controlled tenants. However, that's just because they can get away with it. They'd be able to get away with a lot worse without regulation. Yes, with total deregulation in NYC, average and median rents might decrease somewhat over time (there might be less tolerance of rent increases), but in the super-inflated NY real estate market, that might not even be significant. And for sure the biggest impact would be that all those controlled and stabilized apartments would very quickly jump up to market rates, as we've seen since '97.
At 4:04 PM,
Antid Oto said…
On looking over that Economist article again, here's how I realized I shouldn't have taken it seriously to begin with:
Landlords and tenants find themselves in poisonous relationships, since they are linked by law rather than by voluntarily renewable contracts.
Oh, if we had only voluntary contracts to govern our behavior, we would all get along so much better, wouldn't we? That is the sign of total libertarian-economist nuttery.
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