New York rent control critics predict eventual fallout

If you have a rent-controlled apartment in New York City, it may come at a higher price than you realize.

As Swedish economist Assar Lindbeck once wrote, “In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”

NYC rent-control laws, expanded earlier this summer by the state’s Housing Stability and Tenant Protection Act of 2019, are being criticized by both left-wing and right-wing economists, who also are warning that such controls are destructive.

The rent control expansion has incited the ire of landlord groups, which brought a federal lawsuit against the city and state last month.

The expansion makes permanent rent-control rules for some 1 million New York City units. Rent control critics warn these new laws will cause a raise in rents on most people — except those living in rent-controlled apartments, who are sometimes well-heeled.

In fact, in 2017, upper-income households occupied 12 percent of pre-1974 rent-stabilized units — or 98,780 units — according to the Citizens Budget Commission (CBC) report “Reconsidering Rent Regulation Reforms.”

The CBC study found that of the upper income stabilized households, 28,377 earn more than $200,000 a year.

Critics contend that the laws result in housing shortages and high rents.

Blair Jenkins, the editor of a 2009 compilation of rent research entitled “Rent Controls: Do Economists Agree?” concluded that most economists condemn them.

Pace University professor Joseph Salerno agrees that New York’s laws have made housing problems worse.

“If rent controls are imposed that are lower than rents dictated by market forces, an excess demand for apartments almost immediately appears,” he said. “Over time, if the demand for apartments increases, the shortage grows worse, leading to long waiting lists.”

New York City Comptroller Scott Stringer declined to respond to questions about the economic aspects of controls.

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