Now is the winter of our discount rent.
Enjoy it while you can. On June 15, New York City’s rent regulations expire. One day later, the city’s 421a tax incentive program expires. In a city where housing advocates and housing developers already love doomsday rhetoric (either New York is about to turn into Detroit, or it’s about to turn into a 300-square-mile gated community), the confluence of these two events means it’s going to be a long, angry spring.
For something that so deeply affects the workings of the city’s housing market, rent regulation in New York is widely misunderstood. At a recent event put on by the Pratt Institute and the NYC Planners Network, a group of progressive city-planning professionals, housing advocates on the panel spent as much time explaining how rent regulation works as they did explaining why we should keep it.
There are two types of rent regulation. Rent control, with its strictly circumscribed rent hikes, is the housing equivalent of the one-dollar Bolt Bus fare: everyone has heard it exists, but almost no one has seen it. This applies to buildings constructed before 1947, and tenants who have remained in their apartments since 1971.
Rent stabilization is less stringent; it covers multi-unit dwellings built between 1947 and 1974, and yearly rent increases are set by the Rent Guidelines Board (currently 1 percent, the lowest in fifty years). In rent stabilized apartments, tenants have the right to renew their leases, and have more leeway than market-rate tenants when pursuing legal remedies against their landlords if they are being mistreated. (Rent-stabilized tenants have historically and frequently been targets of landlord harassment.)
According to the panelists, renewing both these regulations is their first priority, simply because they affect so many people—2.5 million New Yorkers, living in about 45 percent of the city’s apartments. And despite a media tendency to hold up middle-class Manhattanites as the face of rent control, rent-regulated tenants are disproportionately low-income people in low-income neighborhoods. This fact led Delsenia Glover of the Alliance for Tenant Power to make perhaps the most dramatic prediction of the night: if rent regulation is not renewed, low- and moderate-income people will be forced out of New York within a decade.
The main problem with rent control in New York is that the system is administered in the clumsiest way possible. While rent-stabilized apartments largely happen to be occupied by low-income tenants, nabbing one is largely a matter of luck; they are not actually given out on the basis of income. Means-testing for affordable housing is nowhere on the political radar. Even worse, according to Harvey Epstein of the Urban Justice Center, 250,000 units have been removed from the rolls of rent-stabilized apartments over the years. This happens in a variety of ways, most notably through “vacancy decontrol,” which infamously allows landlords to make an apartment market-rate once the rent reaches $2,500 per month and the tenants move out (Mayor de Blasio has come out in favor of repealing this rule). No matter how it’s done, though, once an apartment becomes market-rate, it stays that way for good.
So advocates focus on what they call “permanent affordability,” creating affordable-housing programs that aren’t designed to sunset. In addition to New York State’s normal rent regulation laws, the state and city rely on generous tax breaks to incentivize affordable housing. The most controversial program up for renewal is 421a, which exempts developers from most property taxes on new developments. De Blasio hasn’t yet come out for or against 421a, but as Barika Williams of the Association of Neighborhood Housing Developers explained, the program is widely seen as a giveaway to developers.
The roots of 421a are in the distressed New York of the 1970s, when city leaders feared developers would never again build new housing. In some neighborhoods, 421a comes with no strings attached—if you build, you get a tax break. In other areas, developers can only take the tax break if they include 20 percent affordable housing in a project. Either way, the result has been a bonanza for builders, allowing luxury towers like One57 to be built mostly tax-free. Williams estimated that the city loses $1.1 billion per year to 421a, and has only gained a measly 12,000 units in exchange. Most housing advocates in the city want the program to be significantly scaled back or scrapped altogether.
Any attempt to curb landlords’ power over tenants would be a welcome development, but the only place the city has real power to do this is in the realm of enforcement rather than macro-level policy. Noting that 90 percent of all tenants in housing court appear pro se, Epstein said that New York’s current system for resolving housing disputes is “complaint-driven,” explaining that “we’ve set up a structure that prevents people from preserving affordable housing because no one’s looking over the landlord’s shoulder, and they know it.” Many of the city’s housing advocates are mounting campaigns to give tenants a right to counsel in housing court, and the de Blasio administration is forming a Tenant Harassment Prevention Task Force.
Still, housing advocates’ mood is cautiously optimistic at best. There has been plenty of advocacy around the rights of rent-regulated tenants—like this spring’s battle to renew state rent laws, and last year’s unsuccessful fight to get a rent freeze. But there’s been little visible work done on behalf of tenants who are still a majority of the city’s renters: those who don’t live in rent-stabilized or public housing. I asked Williams after the panel what market-rate tenants might be able to expect after this spring’s battles, and she was blunt: “They’re screwed.”
The saddest thing about Williams’ defeatism is that it’s really just realism. At the mercy of landlords, captive to a market where irrational exuberance is the new normal, tenants in non-regulated housing are still a majority of the city’s renters. Whether housing advocates’ failure to help them stems from a clear-eyed recognition of political reality, or a fundamental lack of imagination, those tenants have a long road ahead.