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New York's Rent Regulation Fight

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Re: New York's Rent Regulation Fight

#21

Post by nuschk »

exelius wrote: post #2

This is the problem with housing subsidies: they very often go to those who don't need them. In New York, your choice of apartment is primarily based on location -- anything that's not in the >$1 million range is pretty similar. So if you're looking at two apartments near your work and the rent stabilized one is $1200/mo and the other is $3000/mo, you try to get the $1200/mo one even if you could afford the $3000/mo…

Well, economists often suggest a better way than just let the rich take over: directly subsidize people, not flats. So, if you want a neighborhood to not just attract bankers but also families with kids, pay the families for living there! The idea is to pay them only while they live there - independently of which accommodation they choose - and stop the payments when they move away. This way, the market isn't distorted, people don't get "sticky" in their ability to move to other apartments, and the whole setup is much more fair, as it's pretty easy to control who gets which benefits.

The downside, of course, is that the cost of such payments is far more transparent to the public. Many economists would argue that it's in fact much cheaper, as you it's more efficient. Still, today's subsidies are well hidden and almost never show up in household budgets. And thus it's hard to get to a system of direct payment.

Re: New York's Rent Regulation Fight

#22

Post by exelius »

nuschk wrote: post #20
exelius wrote: post #2

This is the problem with housing subsidies: they very often go to those who don't need them. In New York, your choice of apartment is primarily based on location -- anything that's not in the >$1 million range is pretty similar. So if you're looking at two apartments near your work and the rent stabilized one is $1200/mo and the other is $3000/mo, you try to get the $1200/mo one even if you could afford the $3000/mo…

Well, economists often suggest a better way than just let the rich take over: directly subsidize people, not flats. So, if you want a neighborhood to not just attract bankers but also families with kids, pay the families for living there! The idea is to pay them only while they live there - independently of which accommodation they choose - and stop the payments when they move away. This way, the market isn't distort…

Yeah, such a solution is difficult -- and costly -- to implement. For the reasons you mentioned, government tends to choose subsidization options where money isn't explicitly exchanged: i.e. rather than paying the landlord the difference between controlled and uncontrolled, they just tell him certain units are controlled and he has to deal with it.

A solution such as the one you described also makes it difficult to distinguish between who to subsidize and who not to subsidize. How do you make sure you're not giving big payments to people who don't really need the money and just want the house? What's the difference between a family making $90k/yr and wanting to live in a $5k/mo apartment and a family making $500k/yr and wanting to live in a $25k/mo apartment off central park west? Neither can afford the rent in the area, but where do you draw the line?

Re: New York's Rent Regulation Fight

#23

Post by krschultz »

colinbartlett wrote: post #4
exelius wrote: post #2

This is the problem with housing subsidies: they very often go to those who don't need them. In New York, your choice of apartment is primarily based on location -- anything that's not in the >$1 million range is pretty similar. So if you're looking at two apartments near your work and the rent stabilized one is $1200/mo and the other is $3000/mo, you try to get the $1200/mo one even if you could afford the $3000/mo…

Not necessarily disagreeing with you. But the practical meaning of that is that, in the case of New York, this means the entire island of Manhattan becomes a playground for the wealthy and the people who keep that playground humming are relegated to the outer boroughs.

That has already happened.

Most of the people that currently live in rent controlled or price stabilized apartments got them decades ago. The waiting list for any units that become available is extremely long.

That effectively means most rent control is helping the elderly. I present that without comment or judgement, it's just a fact. The elderly are generally not the people manning the counter at your local bodega. They are not your local construction workers, doormen, or bartenders.

All of those people, the ones that are the backbone of the service economy within Manhattan, already live in the outer boroughs.

So the question effectively becomes does it make sense to subsidize the rent of retired people in Manhattan? On one side you can be the assholes kicking elderly people out of the homes and neighborhoods they have lived in for 30 years. On the other side you can be the assholes forcing the working class to commute 90 minutes a day. Take your pick of the bad options.

Re: New York's Rent Regulation Fight

#24

Post by evanpw »

exelius wrote: post #22
nuschk wrote: post #20

Earlier quoted context omitted.

Well, economists often suggest a better way than just let the rich take over: directly subsidize people, not flats. So, if you want a neighborhood to not just attract bankers but also families with kids, pay the families for living there! The idea is to pay them only while they live there - independently of which accommodation they choose - and stop the payments when they move away. This way, the market isn't distort…

Yeah, such a solution is difficult -- and costly -- to implement. For the reasons you mentioned, government tends to choose subsidization options where money isn't explicitly exchanged: i.e. rather than paying the landlord the difference between controlled and uncontrolled, they just tell him certain units are controlled and he has to deal with it. A solution such as the one you described also makes it difficult to d…

The subsidy shouldn't depend on the apartment, but it should depend on the renters. So you can explicitly set an income limit to exclude the $500k/yr family, but even if you don't, they don't get a bigger subsidy just because they want a more expensive apartment.

Re: New York's Rent Regulation Fight

#25

Post by runako »

exelius wrote: post #10
nine_k wrote: post #6

Earlier quoted context omitted.

Entire Manhattan, including 200th streets? I can imagine that areas like this already exist, e.g. in most lower Manhattan and upper west side. Did it result in anything particularly bad, or at least measurably bad? (Disclaimer: I live in Brooklyn and work on Manhattan; my commute is still better than in most other places I lived.)

Eventually, yeah. There is a finite supply of land on Manhattan, and demand from foreign buyers is growing. Downtown and midtown are already saturated, so the billion dollar condo buildings of 2040 will need to be built somewhere.

I hear this often, but it doesn't jive with my impressions of Manhattan (lived there years ago, visit periodically). In particular, significant parts of the island top out at walk-up heights (5-6 stories). The economics of rent in Manhattan would change dramatically if the island were rebuilt using modern technologies (chiefly: elevators and the taller buildings they enable).

Without knowing the local politics, it seems obvious that there is some force that is preventing the low-productivity uses of land (broadly: "short buildings") from being converted into higher-productivity uses (chiefly "taller buildings"). There's only a finite supply of ground -- this does not mean there has to be a finite supply of usable indoor space. The latter is a choice that can presumably be changed when the will arises.

Re: New York's Rent Regulation Fight

#26

Post by autokad »

michaeltoth wrote: post #17
exelius wrote: post #8

Earlier quoted context omitted.

That's kind of the entire point. The wealthy who use Manhattan as their playground today are just getting the public to subsidize housing for the people who keep their playground humming. Manhattan is already far too expensive; I have a friend who commutes daily to Manhattan from Philadelphia because rents are 25% of what they are in Manhattan. It's only 90 minutes to Penn Station on the train, which is about the sa…

Except a ride from Brooklyn or Queens is $2.75 and a ride from Philadelphia is around $80 on Amtrak. Also, you're assuming that he lives directly above 30th Street Station and works directly above Penn Station, otherwise the travel time is likely to be over 2 hours.

I complain to my friend in brooklyn it takes about as long to go from Philadelphia to Penn Station as it does from Penn Station to their door step. However yeah, those tickets can get pricey. Sometimes you luck out and get the 50$ one, but many times its 200 one way - I dont know what tickets would be commuting during the early hours to get to work though.

That being said, you are also right about living directly above Penn Station. I can get really far in 20 - 30 minutes in philadelphia, but almost nowhere in NYC because of human congestion.

not that 1.5 - 2 hour commutes leave much for a life. I did that for 2 years and while I got a lot of reading done, I didnt have any time at home. You get home 7-7:30 and make dinner. maybe you are finished eating and chores by 9 and you go to sleep between 10 and 11 (you aren't staying up very late because you are leaving early in the morning hours too).

Re: New York's Rent Regulation Fight

#27

Post by tricolon »

czinck wrote: post #19
colinbartlett wrote: post #4

Earlier quoted context omitted.

Not necessarily disagreeing with you. But the practical meaning of that is that, in the case of New York, this means the entire island of Manhattan becomes a playground for the wealthy and the people who keep that playground humming are relegated to the outer boroughs.

I mean, it practically is. I live in Manhattan, and with the exception of a very few places (basically UES right on the river and then the projects) any studio apartment south of 100th (~115th on the west side) street is going to be $2000/month or more. If you find any place cheaper it is going to be borderline uninhabitable or a 6th floor walkup. Rents in Harlem are going up now, too.

Of course, there are more exceptions. Intimidating coöp applications are one.

Re: New York's Rent Regulation Fight

#28

Post by ars »

onion2k wrote: post #13
nine_k wrote: post #6

Earlier quoted context omitted.

Entire Manhattan, including 200th streets? I can imagine that areas like this already exist, e.g. in most lower Manhattan and upper west side. Did it result in anything particularly bad, or at least measurably bad? (Disclaimer: I live in Brooklyn and work on Manhattan; my commute is still better than in most other places I lived.)

Did it result in anything particularly bad, or at least measurably bad? I imagine that depends on the timescale you're looking at. A similar thing has happened in London over the past 30 years - the upshot is that schools and hospitals are now finding it practically impossible to recruit teachers and nurses in the city because they can't afford to live within a commutable distance. That's quite bad.

> are now finding it practically impossible to recruit teachers and nurses in the city because they can't afford to live within a commutable distance. That's quite bad.

Then they will pay more, all the extra money will go to rent, and things will stabilize again.

Do Hospitals located in expensive places receive extra reimbursement from the government?

Re: New York's Rent Regulation Fight

#29

Post by evanpw »

krschultz wrote: post #23
colinbartlett wrote: post #4

Earlier quoted context omitted.

Not necessarily disagreeing with you. But the practical meaning of that is that, in the case of New York, this means the entire island of Manhattan becomes a playground for the wealthy and the people who keep that playground humming are relegated to the outer boroughs.

That has already happened. Most of the people that currently live in rent controlled or price stabilized apartments got them decades ago. The waiting list for any units that become available is extremely long. That effectively means most rent control is helping the elderly. I present that without comment or judgement, it's just a fact. The elderly are generally not the people manning the counter at your local bodega.…

Very interesting. According to this: http://furmancenter.org/files/publications/HVS_Rent_Stabiliz..., in Manhattan below 96th street 35% of rent-stabilized apartment dwellers moved in more than 20 years ago! (Versus 2.7% of those in non-stabilized apartments).

Another interesting fact from that paper: the median person in a rent-stabilized apartment in core Manhattan has a higher income than the median person in a non-stabilized apartment in most of the rest of NYC.

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