The Surreal Estate

Perspectives on Tenant Organizing from the Urban Homesteading Assistance Board

Tag Archives: Rent Control

Rent Regulation: Our Defense

Last week, The Atlantic Cities published this article, which advocates against rent regulations based on the widespread disdain on the part of economists.  The article argues that a better approach may be “adopting policies that encourage the production of more diverse types of housing, implementing strong regulations and practices to ensure housing quality and to protect tenants from abuses; and providing targeted, direct subsidies to people who need help paying rents.”

We happen to think that rent regulation is exactly such a policy: a strong piece of regulation that protects tenants’ rights and makes the city a more livable and affordable place for low income renters.  Last spring, the United States Supreme Court agreed to hear Harmon v. Kimmel, a case challenging New York City’s rent stabilization law. It was upheld, and New York renters breathed a collective sigh of relief. Rent stabilization in New York is good policy, and here’s why:

New York City faces an incredibly tight housing market due to a “highly desirable location, exceptional population density, high construction costs, and limited space due to natural geographic boundaries.” (Quote from Attorney General Schneiderman’s spirited defense of rent regulations.) These characteristics lend themselves to rent profiteering – allowing landlords to charge exorbitant rents due to both extreme need and extreme shortage. Those with less money would inevitably be pushed out. Even economist Edward Glaeser, who describes himself as “a staunch and steadfast enemy of rent stabilization,” told the New York Times:

“Certain types of stabilization can create more integrated communities,” and “New York is a more diverse place because of rent stabilization.”

Can’t argue against diversity.

Enemies of rent regulation generally make the same couple arguments: housing conditions suffer because landlords have no incentive to fix units and high income people end up living in low rent apartments. They also tend to believe that rent regulations provide a disincentive to create new housing, which would alleviate NYC’s housing shortage and bring prices back down. These are all preposterous arguments.

First, development: But housing units are not built overnight. In the short run, the current supply of housing is basically what we’re going to have. (Current events tell us that supply can in fact decrease, thanks Sandy!) Incentivizing development would do very little for New Yorkers who need help now. But there is a long run, and anyone who thinks that there aren’t developers frothing at the mouth to build housing in New York City should take a look out the window at the Williamsburg waterfront, or try Googling “Bruce Ratner.” Under-development is not an issue. (Whether or not we actually want new development, what we could do to better utilize existing housing stock, is a different conversation. Stay tuned!)

Second, as the Furman Center proved last spring, the vast majority of tenants living in rent regulated apartments are not high earners – they have a median income of $34,000. (Their policy brief is chock full of other socio-economic and demographic facts about NYC’s rent regulations – read more here.)

Third: NYC housing conditions are a problem, but the reason is negligence and greed, not regulations. And thankfully, the housing maintenance code is getting stronger every day.

Peter Tatian, journalist for The Atlantic Cities, suggests that more direct subsidies would be better than rent regulation. While I’m in favor of a stronger and wider safety net, I think we should acknowledge its limitations:

The Section 8 voucher is the most common direct rent subsidy, but unlike food stamps, it is not considered an “entitlement program.” This means there are a finite number of vouchers and not everyone who qualifies will be able to receive one. In New York State, the program has been frozen for several years.  As recent federal budget discussions have shown us, direct subsidy spending is very politically vulnerable and isalways at risk of termination.We can look to the Work and Child Advantage experience for an example.

Even entitlement programs do not reach all who qualify. According to the Food Action and Research Center, about 1 in 4 people who qualify for food stamps don’t even bother to apply due to a variety of reasons ranging from stigma, to misinformation, to hassle. By regulating rents rather than providing direct subsidy, we can ensure that the benefit is received by a major swath of the population who need it, free from stigma and bureaucratic obstacles.

Finally, we stand in defense of rent regulation because there isn’t much else out there for renters. Our national housing policy overwhelming supports homeowners (to a fault, I happen to think.) Public housing has largely been demolished and Section 8 is frozen. So, we stand in favor of rent regulation as one of the last bastions of supportive policy for a growing population of renters who deserve the protection.

Friday News Round-Up!

congress

This week, we left another year behind and started anew! With the first week of 2013 behind us, we’d like to round out the events of the week.

  1. Today, the House of Representatives passed a $9.7 B bill to support homeowners that continue to battle with the aftermath of Sandy, with the primary goal is of helping homeowners and local governments recover from the unprecedented costs of the storm.  Specifically, the bill gives the National Flood Insurance Program the ability to utilize the allotted money to fill insurance claims stemming from the storm’s damage. The bill still needs to pass through the Senate (which is expected to happen later today.) With the detriment of Sandy still plaguing many New Yorkers and New Jersey-ers, we’re glad to see the federal government taking more initiative to further recovery efforts. This news comes after outrage directed at Speaker Boehner earlier this week for tabling a different measure.
  2. This week, The Atlantic Cities published an article advocating for the implementation of more effective rent control laws. Tatian illustrates that the rates of rental vacancies have dropped from 11.1 percent in 2009 to 8.6 percent in 2012. He attributes the decrease in vacancies to the current mortgage market, where homeowners are confronted with unstable mortgages as well as an inability to obtain new mortgages. As a result, there has been an influx of renters in the market. While he recognizes the importance of stricter rent control laws, he also understands they are vastly unpopular.  To better reflect the reality of renters (especially those seeking affordable housing) and he advocates for the creation of diverse housing with harsher affordability regulations and  better tenants protections.
  3. Delayed affordable housing construction in Williamsburg and Greenpoint has perpetuated gentrification.  Seven years ago, several high-rise high-rent buildings were commissioned to be constructed in these neighborhoods. At the time, the city and developers  associated with these projects agreed that 3,500 units would be preserved as affordable housing through various programs, including NYCHA.  As of now, expensive high-rises now line the East River, but the affordable housing units on the 12-acre Cooper Park House is non-existent.  The delayed construction is attributed to bureaucratic tendencies and, prioritization of other housing developments. With neighborhoods like Williamsburg and Greenpoint gentrifying rampantly, we hope that developments, like Cooper Park House, will become priority.
  4. With the culmination of 2012, Pete Souza, official White House photographer, posted his most intimate photographs of President Obama and other executive elected officials on Flickr. The pictures range from the moment President Obama was briefed on the Sandy Hook shooting to the moment he heard that Osama Bin Ladin was killed to time First Lady Michelle Obama competed in a potato-sac race with Jimmy Fallon. The photographs are heart-wrenching and zany. Souza’s series serves as a point of reflection as well as humanizes our leaders, acknowledging their fallibility and capacity for growth.

Have a great first weekend of 2013 and we look forward to an exciting year at UHAB!

New York State Legislators and New York City Council call for Rent Guidelines Board Reforms!

Picture via Capital New York

Yesterday, we stood with State Senator Daniel Squadron, Assembly-Member Brian Kavanagh, City Council Speaker Christine C. Quinn, Tenants & Neighbors and tenants and neighbors from around the city to urge New York State elected officials to pass legislation to reform the Rent Guidelines Board (RGB), ahead of the RGB’s annual vote to adjust rents.

The Rent Guidelines Board was established in 1969 and is mandated manage the persist housing shortage in New York City that puts low to moderate income New Yorkers at risk of losing their home. New York City Council and New York State legislature have both recognized that under conditions of less than 5% vacancy rate, an unregulated rental market causes “severe hardship to tenants” and forces the “uprooting [of] long-time city residents from their community.” By establishing the annual rate at which rent in regulated units is allowed to rise, the Board’s mission is to create fair rent levels in a market driven by chronic scarcity.

Under current law, the RGB is made up of nine members, all appointed by the Mayor. These nine members are charged with investigating the economic condition of the real estate industry in NYC, including average cost of operating a multifamily building and the average income and cost of living for residents each borough. Two members are appointed to represent tenant interest, two members are appointed to represent owner interest, and five members are appointed to represent the general public. The RGB is consistently under fire from tenants and the NYC affordable housing advocacy community for regularly raising rents despite data that suggests landlord income is going up and affordable housing is scarce.

The proposed legislation (S741A/A6394B), sponsored by Senator Squadron and Assembly member Kavanagh, would require City Council confirmation of the Mayor’s appointees to the RGB, bringing necessary checks and balances to the system and making the appointment process more democratic. The bill would also open up appointment to a wider array of professionals – including those who work non-profit and urban policy – and ensure that more diversified views are represented on the RGB.

City Council Speaker Christine Quinn expressed support for the bill, pointing to the fact that the council already has the authority to provide oversight to various NYC agencies and boards that are arguably less important to New Yorkers. “The question becomes…why hasn’t this happened? Why is this one board that is so important, so central to the life of so many New Yorkers, only appointed by the executive with no input from the legislature?”

Like Tenants and Neighbors, we agree that the RGB is consistently pro-landlord, taking little cue from actual data or tenant experience in New York City. These days, nearly everyone is weighing in on whether or not the housing market is rebounding. (We have our own thoughts – stay tuned.) People don’t seem to argue that years of homeownership struggle have caused on influx of new renters to the market. Basic economics tells us that rents will naturally rise. But unemployment isn’t dropping nearly as quickly as rents are rising and tenants in the Bronx and Central Brooklyn are still struggling with high rents and low pay. Even though the “market” may be doing better, we know that the people who live in this city are still struggling. By bringing accountability and democracy to the RGB, we hope that the board can become a stronger ally for affordable housing and NYC tenants.

To join this fight, follow Real Rent Reform on Twitter (@realrentreform) and like them on Facebook! Even better, get on the van to Albany on Wednesday to support the Assembly Housing Committee vote on R3’s priority bills: preferential rent reform, RGB reform, MCI reform, rent control reform, and the decrease in the vacancy bonus. Help R3 and Tenants and Neighbors put weight behind these bills! The van leaves from 236 W. 27th Street in Manhattan. RSVP to Sam at sstein@tandn.org.

For more on the RGB, visit their website: http://www.housingnyc.com . Stay tuned to this important fight for NYC tenants! Check out Capital New York for more on this story and yesterday’s announcement.

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