Tag Archives: rent control

Facts and Myths About Rent Regulation

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Polonius

Few topics are more fraught in NYC than rent regulation and stances about it are typically set by where people are financially and ideologically. It is always useful when someone tries to add some good old-fashioned facts to the debate in order to help craft good policies. That is particularly true now, given that NYC’s rent laws are supposed to expire on June 15th.

The Citizens Budget Commission has issued a report, 5 Myths About Rent Regulation in New York City. The CBC is hoping that that this report will inform the New York State legislature’s debates over the renewal of New York City’s rent laws (for those who don’t follow this carefully, NYS has jurisdiction over NYC’s rent regulation). Unfortunately, the report is ideologically skewed, which limits its usefulness for those trying to get their hands around this topic.

Here are the CBC’s five “Myths” and “Facts:”

Myth 1: A majority of tenant households in New York City are rent burdened.

Fact 1: 38 percent of tenant households in New York City are rent burdened.

Myth 2: Market-rate units in New York City are not affordable to most tenants.

Fact 2: In market-rate units, 54 percent of tenants have affordable rent.

Myth 3: A rent-regulated housing unit is an affordable unit.

Fact 3: Among tenants in rent-regulated units, 44 percent are rent-burdened.

Myth 4: Middle-income households cannot find affordable housing in New York City.

Fact 4: Outside of Manhattan, 96 percent of middle-income tenant households are not rent burdened.

Myth 5: The number of rent-regulated units is rapidly declining.

Fact 5: The number of rent-regulations is stabilizing.

The CBC claims that public officials and housing advocates are using “problematic” figures and characterizations. That is most certainly true in many cases, and par for the course for advocates. But the CBC does much the same, which should not be par for the course for a nonpartisan civic organization.

The second “Fact” is particularly laughable because CBC is doing exactly what it accuses advocates of doing — some form of rhetorical bait and switch. The second “Myth” is about tenants overall, while the second “Fact” is just about tenants who are currently in market-rate apartments. This is an apples to oranges comparison. Once you see the bait and switch, you see that CBC’s figures actually support the truth of this supposed second “Myth.” There are more problems contained in this document, but I leave it to you to find them for yourself.

I have no problem with CBC trying to make the debate over rent regulation more fact-based. But CBC should follow the wise advice of Polonius: “This above all: to thine own self be true.”

Picture: "Polonius" by https://www.oregonlink.com/elsinore/poveyglass/polonius.html.

Housing and Vacancies in NYC

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New York City’s Department of Housing Preservation and Development (HPD) has released its initial findings of its 2014 Housing and Vacancy Survey. There are some interesting findings about the housing stock, particularly for those of us who follow the NYC housing markets closely:

  • There were 1,030,000 rent-stabilized units, which amounted to 47 percent of the housing stock.
  • There were 27,000 rent controlled units, which amounted to 1.2 percent of the housing stock.
  • The city-wide homeownership rate was 32.5 percent, although the rate varied significantly among the boroughs.
  • The rental vacancy rate was 3.45 percent.
  • There were 55,000 vacant units that were unavailable because of occasional, seasonal or recreational use.
  • The median annual income for all households (renters and owners) was $48,040. The median annual income for renter households was $38,500 and for homeowner households was $75,000.
  • The median contract rent-income ratio was 31.2 percent.

There were also some interesting findings about housing and neighborhood conditions:

  • “In 2014, housing and neighborhood conditions in the CIty were good.” (8)
  • “The proportion of renter-occupied units with five or more of the seven maintenance deficiencies measured by the 2014 HVS remain extremely low; only 4.3 percent” (8)
  • “The proportion of renter households that rated the quality of neighborhood residential structures as “good” or “excellent” was very high: 71.7 percent” (8)

Crowding remains a problem in the City, a finding that is unsurprising to all who are familiar with this housing market. The proportion of renter households that were crowded was 12.2 percent.

These numbers should inform numerous debates about housing in NYC, including those relating to rent regulation, foreign ownership of apartments and affordable housing goals, to name a few. It is important that these debates be data driven if we are to arrive at policy choices that are good for New Yorkers and good for the long term health of NYC itself. The whole document is worth a read for those who care about the City’s housing market and its impact on the overall health of the City.

Rent Regulation and Housing Affordability

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NYU’s Furman Center issued a fact brief, Profile of Rent-Stabilized Units and Tenants in New York City, that provides context for the deliberations of the Rent Guidelines Board as it considers a rent freeze for NYC apartments subject to rent stabilization.

Rent regulated (rent stabilized and rent controlled) apartments clearly serve households that have lower incomes than households in market rate apartments. Median household income (fifty percent are below and fifty percent are above this number) is $37,600 for rent regulated and $52,260 for market rate households.Thus, market rate households have median incomes that are nearly 40% higher than rent regulated ones.

The median rent is $1,155 for rent regulated and $1,510 for market rate households.Thus, median rents are about 30% higher for market rate tenants.

Despite these differences, the number of households that are rent burdened (where rent is greater than 30% of income) is similar for the two groups: 58% for rent regulated and about 56% for market rate households. (4, Table D)

The Furman Center brief provides a useful context in which to consider NYC’s rental housing stock as well as the households that live in it. Given the nature of NYC households, however, I would have wished for a more finely detailed presentation of household incomes and rents.

NYC’s distribution of income is skewed toward the extremes — more low-income and high-income households and therefore fewer middle-income ones than the rest of the nation. Given this, it would have been helpful to have seen the range and distribution of incomes and rents, perhaps by deciles. The Furman Center brief indicates that updated data will be available next year, so that may provide an opportunity to give a more granular sense of dynamics of the NYC rental market.

Mayor de Blasio’s housing plan outlines his commitment to preserving affordable housing. One element of that commitment is to preserve rent regulated housing. Understanding that market sector and the households it serves is essential to meeting that commitment.