It just may break the back of New York’s finances and budgets.
This, even though rents in New York City have plunged to decade-long lows.
The legislation, now in committee in both the Assembly and the Senate, is misleadingly labeled “Good Cause Eviction,” when it would essentially force landlords statewide to accept tenants for life — with a cap on yearly rent increases.
That’s right: No building owner could ever evict a tenant or deny him or her a lease renewal, except under narrow circumstances. If landlords tried to raise rent beyond 3 percent, or 150 percent of the region’s Consumer Price Index, that would — by law — be a legitimate reason for a tenant to not pay and still skirt eviction.
The new law would apply to every apartment in the state, thereby instantly subjecting nearly 2 million existing units in the city alone, and any new ones, to rent control — including those rented by the wealthy. And all on top of a raft of harsh measures lawmakers took in 2019 that made it tougher for landlords to make ends meet.
Sure, the bill might sound good for tenants, but there’s no rescinding the laws of economics: It’s too much demand for housing and too little supply that drives up rent, not a lack of regulation.
Plus, as studies show, rent-control policies only further fuel demand and decrease supply. Parents hang on to large apartments, and keep them off the market, long after the kids are gone — because rent regulation makes their monthly rent too (artificially) low to give up. The prospect of getting a rent-controlled apartment also winds up attracting more people to the market, fueling demand.
Meanwhile, though, landlords can’t recoup costs. They wind up skipping on optional repairs and upgrades and converting rental buildings to co-ops or condos. And you can forget about investors putting up new buildings. Why should they, if they’re only going to lose money?
Contractors and other businesses that depend on work from owners also suffer and the jobs they provide dry up.
“History has shown that strict rent controls lead to less housing, higher rents and more homelessness,” notes landlord rep Jay Martin.
“Whatever housing is left after ‘Good Cause Eviction,’ a k a universal rent control, will be poor quality,” and the result will be “an economic calamity” that’s “worse than the pandemic,” warns Rent Stabilization Association head Joseph Strasburg.
Too bad New York lawmakers don’t care about consequences.