How extreme rent rules deepen NYC’s housing crisis

A new state report shows that New York’s rent laws are deepening the city’s housing crunch.

The state Office of Rent Administration found that more than 30% of all rent-stabilized apartments in New York City have “preferential” rents, meaning ones lower than the landlord is legally allowed to charge.

That suggests that the units don’t need to be rent-controlled in the first place. Confirming it, when units go vacant the rent only rises an average $8. But the tenants still think they’re being protected by the rent laws, and so support continued regulation.

Jay Martin of the Community Housing Improvement Program, a small-landlords group, connects the dots: “Rent stabilization provides discounted rents to [only] roughly a quarter of renters in New York City. It does little to help renters in roughly three-quarters of New York City’s 2.2 million apartments.”

Meanwhile, the report shows a sharp drop in Major Capital Improvement applications, because growing numbers of landlords can’t get loans to make building-wide improvements.

“Tenant advocates” argue that greedy landlords are keeping thousands of rent-stabilized units off the market. But these are overwhelmingly units that owners can’t legally rent out without bringing up to code — which they can’t afford to do because either 1) the legally limited rent means they’ll never make their money back, or 2) they lack the capital to do it after losses during the pandemic, plus high inflation and high-interest rates, neither of which the rent-control system allows for.

The solution is simple: Make it economically practical to modernize and rent “zombie” units. Better still: Amend the rent laws so property owners can seek a vacancy reset so rents on those apartments will be comparable to area rents — just like the current process used for apartments exiting rent control.

At the least, give landlords a legal way to make necessary repairs when the tenant refuses to cooperate, to prevent conditions from growing worse and far more costly to fix when the apartment’s finally vacant.

Stop letting “tenants’ rights” degrade the city’s existing housing stock.