Some People Will Do Crazy Things for a Rent-Controlled Apartment in NYC
Late last month the New York Post reported that a woman named Brenda Williams pretended her dead aunt was still alive to keep a rent-stabilized apartment in Brooklyn. For four years. Williams kept up the ruse by telling people that her aunt couldn't see them because she was sick or asleep. Until the ploy was discovered, Williams paid only $287 a month for a 550-square-foot apartment that rents for roughly $2,200 on the open market.
The situation isn't a typical case of rent-control gone wrong, to say the least. For one thing, the owner of the unit had no legal obligation to keep the old aunt's rent low; according to the Post, he'd done it out of pity for age, health, and poverty. For another, it's a bit hard to determine the greater crime here: Williams's duplicity, or the broader consumer willingness to pay nearly thirty grand a year for an apartment the size of a two-car garage.
The incident serves as a reminder that rent-control in particular, and affordable housing in general, are set to play pretty big roles in New York's mayoral election this fall. Christine Quinn, city council speaker and a leading candidate to take Mayor Bloomberg's place, recently outlined a four-part housing plan that involves "the biggest commitment to middle class affordability that this city has seen in two generations." Quinn says she wants to create 40,000 middle-income apartments in ten years, and implement "permanent affordability" laws.
"I am where I am today because 70 years ago my mother’s parents were able to get a rent controlled apartment on Isham Street in Inwood," she said.
It's hard to argue with Quinn's basic stance at the present time. While Bloomberg put forth a grand (and largely successful) plan for affordable housing, a recent report found that two-thirds of these new units remain too expensive for local residents. Last month the Financial Times highlighted the "housing crisis" taking its toll on many parts of the city. Rising rents are threatening to price lower- and middle-income New Yorkers out of the city.
Then again, as Peter Tatian of the Urban Institute recently wrote here, there's "very little evidence that rent control is good policy." Studies have found that landlords with rent-controlled units often inflate the rent on other units to make up the loss, and that rent-stabilization programs don't do a great job targeting the poor residents they're supposed to protect. Writing last month in response to Quinn's statement, Megan McArdle argued that greater rent control is "not the way" to create an economically diverse city.
Neither extreme — much more rent-stabilization, or none at all — is the only way forward for New York. In the broader sense, cities should target ways to expand the housing supply in certain parts of the city. As Matt Yglesias told Marketplace last year, discussing his book on urban rents, such an effort might involve reducing the cost of obtaining permission to build, or perhaps even changing zoning restricts to permit denser development.
In the more immediate sense, New York should target the 41,000 or so people living in rent-controlled apartments despite making at least $150,000 a year. Sure, that's only about 4 percent of all rent-controlled tenants in the city, but that small share is capable of creating disproportionate outrage and distraction. Housing affordability shouldn't be about who has the best scheme to keep a low rent they don't need — it should be about maintaining a diverse city.