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By promising to sign a stupid and destructive bill to immortalize rent regulation – a measure that will prevent tenants who pay artificially low rents from renting more than one million apartments – Governor Andrew Cuomo essentially asked everyone in New York goes to hell.
It is therefore likely that no new apartment building will rise. This ensures that existing ones will break down. Repair and upgrade costs will be prohibitive for homeowners who must make minimal profits on properties that require significant reinvestment, but can not charge enough rent to pay for them.
The $ 15,000 cap of capital improvements that a landlord can achieve by increasing his rent for more than 15 years in a stabilized apartment is ruinous for older projects like Stuyvesant Town, which will need a lot more pulp to preserve NYCHA's 70-year-old buildings. like a decay.
The "progressives" of Albany and the town hall are 100% anti-progress. They do not understand how housing markets work. Or, if they have any idea, they ignore it and prefer to adhere to a socialist concept of "affordable housing for all," which has worked so well in the Union of Soviet Socialist Republics.
The law that Cuomo promises to sign – which the partisans call absurdly "reform" – will make the overheated residential scene of the Big Apple even more expensive than it is.
Rent stabilization benefits only one group of citizens: most middle-class residents are lucky enough to be isolated from the market economy that most others face. But his supporters would be happy to embalm the demographics of the city, as would fanatics of "preservation" with his physical condition. Witness the fateful designation of the Monument Preservation Commission, which houses the Strand Bookstore in Manhattan, where close to 40% of the buildings south of 110th Street can not be replaced or altered as they individual monuments or are part of historic districts.
Rent regulation, which generally governs buildings built before 1974, has the effect of removing a large portion of the housing supply from New York. How many? Of our total 3.2 million dwellings, 68% are rents. Those who are governed by rent regulations and which are much more rare or even cheaper, are much more numerous than the unregulated – from 1,246 million to 937,000.
People living in these 1.246 million apartments hardly ever move unless they have multiple babies at the same time or run away from the city. Why give up a rent of $ 2,000 a month in a beautiful middle class building (where are most stabilized apartments) if the same apartment in a condominium or co-op costs $ 2 million to buy?
Anyone who has half of the brain can understand that when you reduce the number of units available, their value – that is, the price – increases. The apartments on the open market are so expensive that there are not enough resources to meet the demand in a city with a flourishing economy. This is called supply and demand, a principle taught in all business school classes, but it is a heresy for mostly leftist democrats, who have recently taken over the old Senate of the Republican State.
Since 1993, slow but steady erosion of rent rules dating back half a century has freed up approximately 155,000 apartments. Homeowners can convert stabilized units to market rates if certain income thresholds are exceeded and / or if the regulated rent increases to a certain point.
The profits that the owners obtained by slightly releasing the straitjacket helped to restore areas left for dead. New construction and investment in existing buildings, from the North Bronx to Coney Island, has brought middle-class and working class families, both local and global, into once-abandoned and dangerous streets.
It's over. Far from developing "affordable" housing, the indefinite extension of stabilization will lead to higher rents in unregulated buildings.
The blow to promoters' profits and the reasonable fears that even new buildings will be forced to stabilize will make them think twice before building more.
The new law even makes it impossible to freely increase the rents of stabilized apartments in the rare cases of tenants moving. Why does the legislator have to pay the price a landlord can pay for an empty apartment?
A frightening change of government in state and city governments has propelled ideologues into power who regard landlords as evil exploiters of the people. Some members of the city council are even trying to impose forms of control of commercial rents, a notion so stupid that even Mayor Bill de Blasio has refused to support it so far.
If the new generation of legislators gets their way, every owner will be forced to wear a scarlet "L.".
Rent regulation began as an "emergency" measure after the war in 1950 – a city, an era, and a housing market that no longer affects us today. It seems like in New York, the urgency never ends.
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