Is it a case of chicken vs egg? Is it unaffordable for others because tenants do not move out of their affordable housing? Or is it unaffordable for others because tenants can't afford to move out of their affordable housing?
Artificially set prices make the market more inefficient. The reality is that a lot of people want to live in NYC and there just isn't enough supply of housing for it be "affordable". By setting the price of a rental apartment too low in a hot real estate market like NYC, you are incentivizing people who would otherwise move out of the city or seek more efficient living arrangements (smaller apartment, rent a room) to stay put. Rent control constricts the supply in two ways:
1) It makes prices that much higher for units that aren't rent controlled and whose prices are set by the market. If the rent for these rent control units was allowed to fluctuate based on the market, the turnover would be higher and there would be more apartments available in total.
2) It incentivizes less units being put on the market because (a) A potential landlord (e.g. someone who wants to rent a room out in their 2 bedroom apartment or an owner of a townhome / brownstone who wants to rent their basement out) won't be able to make a profit or maintain their unit at the artificially low price set by regulation. (b) Real estate developers also won't want to build new apartments / condos if they know that they won't be able to get their money back by renting (because the govt is forcing them to rent at a super low price).
a) "Rent-controlled" apartments account for less than 24,000 units across all of NYC.
b) "Rent-stabilized" apartments account for a significantly larger percentage but the majority of stabilized apartments in the more desirable areas (all of Manhattan, Astoria/LIC, Sunnyside, close parts of Brooklyn) are within 20% distance of market rate and lose their classification once they cross ~$2700/mo.
c) On the whole, owners of buildings renting to rent-stabilized tenants are not losing money and can afford to make capital improvements (which increase rents) and hire management companies just like with any other building.
stuxnet79|7 years ago
1) It makes prices that much higher for units that aren't rent controlled and whose prices are set by the market. If the rent for these rent control units was allowed to fluctuate based on the market, the turnover would be higher and there would be more apartments available in total.
2) It incentivizes less units being put on the market because (a) A potential landlord (e.g. someone who wants to rent a room out in their 2 bedroom apartment or an owner of a townhome / brownstone who wants to rent their basement out) won't be able to make a profit or maintain their unit at the artificially low price set by regulation. (b) Real estate developers also won't want to build new apartments / condos if they know that they won't be able to get their money back by renting (because the govt is forcing them to rent at a super low price).
busterarm|7 years ago
b) "Rent-stabilized" apartments account for a significantly larger percentage but the majority of stabilized apartments in the more desirable areas (all of Manhattan, Astoria/LIC, Sunnyside, close parts of Brooklyn) are within 20% distance of market rate and lose their classification once they cross ~$2700/mo.
c) On the whole, owners of buildings renting to rent-stabilized tenants are not losing money and can afford to make capital improvements (which increase rents) and hire management companies just like with any other building.