Rent Control
* “In many cases, rent control appears to be the most efficient technique presently known to destroy a city except for bombing.”
* “Rent control has in certain western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.”
* “That great sacred cow — Rent Control — is a textbook case of Economic stupidity.”
It is no surprise that free market economists would oppose rent control, root and branch. It is, however, a bit “man bites doggish” that even economists with sterling left wing credentials would oppose it too, and about as bitterly. The sources of those three quotes? Assar Lindberg, from “The Political Economy of the New Left”; liberal Swedish economist Gunnar Myrdal; and the New York Times’ own Paul Krugman…
If you’re just moving to New York City, big dreams and ideas in your head, living in Manhattan will cost you, on average, $2,253 a month for a studio and $3,026 for a one bedroom. Pricey. If you’re in the middle class, you’re probably railing against the rich Wall Streeters and greedy landlords who are keeping you from making it in Gotham.
Except the average rent for the city in 2008 was only $950 a month.
How is this possible? Because 48% of rental housing is stabilized, meaning increases are regulated, and another 2% are rent-controlled, meaning increases are almost non-existent. Another 14% of units are public housing and other projects.
That leaves only 36% of apartments on the open market, in a city as attractive and competitive as this one. Rent control may keep the average artificially low, but it also makes the rents on the small number of available units artificially high….
Some people fear market rents on the ground that only the rich will end up living in Manhattan. Unlikely; though rents would go up for those with rent-stabilized apartments, an increase in the vacancy rate (now at an engineered 3% or less) would cause other rents to fall. That would provide an opening for those who usually can’t get by in New York — the middle class.
Anyone who has lived in New York has felt the impact of rent control, for better or worse.
