The Latest In New York's Rent Regulation Follies

In the never-ceasing quest of the New York progressive to achieve perfect economic fairness between and among all people, one of the prime policy tools is the so-called "affordable housing"  program.  The required article of faith is that the government can make housing plentiful and "affordable" to all by decreeing that it be so.   Eighty or so years into the game and with the most expensive housing prices in the country to show for it, the faith remains unshaken.  In fact, Mayor de Blasio if anything is leading a revival.

But of course, as usual with these things, nobody thought about the unintended consequences.  Lately, this has been getting humorous.

Because of the way the "affordable housing" programs have been set up, it turns out that over time there are more and more instances of people living in the same building, and in very comparable apartments, yet paying wildly different rents, sometimes one a multiple of another.   A rent regulation system that initially applied to entire buildings has become subject since the 90s to gradual deregulations that proceed one apartment at a time; and new "affordable housing" requirements put about 20% "affordable" apartments into many new buildings that otherwise are priced at the top of the market.

Add to this mix that today in Manhattan we have rather a super-heated apartment rental market, in substantial part the result of the shortage caused by rent regulation, affordability requirements, and restrictions on development.  Ordinary one-bedroom apartments in most neighborhoods rent for at least $3500 per month, two-bedrooms for $5000 per month, and apartments with anything special can go for substantial premiums above that.  The landlords and developers have noticed that they can get the premiums by installing so-called "amenities," often using space that previously went empty, like the basement and the roof.  Popular amenities include gyms, children's party areas, and roof gardens.

And now -- I know you'll be shocked -- it has started to be noticed that many landlords and condo associations who install the amenities make them available to the market rate tenants, but not to the rent-regulated and "affordable" tenants in the same building.   Grumblings about this have been around for several months, but got a big play this past Sunday on the front page of the Real Estate Section of the New York Times, in an article titled "What's Next, a Bouncer?", subtitle: "Rent-Regulated Tenants Excluded From Amenities." 

The article is mainly a series of quotes from rent regulated tenants complaining of being treated like "second class citizens."  It won't surprise you to learn that the tenants and buildings in question are not scattered around the city, but rather all but one are on the Upper West Side of Manhattan.  This is ground zero of political correctness and gentry progressivism, and also squarely within the New York 10 Congressional District, justly famous for combining the most efforts in the country to combat income inequality with the highest income inequality of all districts.   The buildings at issue include the Windermere at West End Avenue and 92nd, Stonehenge Village at Central Park West and 96th, 230 Riverside Drive, 40 Riverside Boulevard, and so forth.  In a neighborhood where you will be very hard pressed to find any apartment with a bedroom renting for under $3000 per month, the rents of two of these people are given as $1250 and $1107; a third is described as "rent-controlled," a special program with different rules where the rent (not given) is likely to be under $1000 per month.  

You might look at these people and say, they have really lucked out in life.  Each is getting several thousand dollars a month in free housing value, courtesy of some combination of the taxpayers, their landlord and their neighbors.  They are entitled to stay and keep that deal until they die.  Shouldn't they be counting their blessings?  Well, you don't understand the exquisite sense of entitlement of the Upper West Sider.  Here is the rent-controlled Ms. Sarah Denby:

"It’s ridiculous to have a gym here that I can’t use,” said Sarah Denby, who lives in a rent-controlled one-bedroom with her husband, Walter Brotman, a building resident for 60 years. “At one point I got so mad: I can store the bike in the bike room but I can’t have a key. I have to return it right away or the doormen freak out. They absolutely flip out. They just besiege me."

Oh, did we forget to mention that her building (230 Riverside Drive, which is a condominium) has 24-hour doormen, an amenity that costs her neighbors at least about $250,000 per year, none of which could possibly be covered by her rent?  Market one-bedroom rentals are currently available in the building at $3100 and $3300. 

You'll be glad to know that the local politicians have sprung into action to correct these terrible injustices.  Bills have been proposed in both the City Council and State Legislature to penalize landlords who provide less than equal access to amenities to the rent-regulated and "affordable" tenants.  Sponsors include Council members Mark Levine and Corey Johnson, and Assemblywoman Linda Rosenthal.  But here's my question to you esteemed lawmakers:  If access to these gyms and gardens and storage areas is to be opened up to the "second class citizens" of New York, why only to the likes of Ms. Denby, who already is getting a $2000+ per month gift of discount housing courtesy of the taxpayers and her neighbors?  Why not also to all the less fortunate hardworking citizens who have no access to the rent-controlled apartments and live in relatively cheap but remote market rate units in deep Brooklyn and the Bronx?  In any kind of "fair" world, aren't those people equally or even more entitled than Ms. Denby to access to the gym at 230 Riverside Drive?

And while we're on the subject of the rent regulation follies, here is a report from yesterday's New York Law Journal on a decision handed down Monday from the Manhattan Housing Court by Judge Sabrina Kraus in a case called RSP 86 Property v. Sylvester.    It seems that the landlord decided to try to evict Mr. Sylvester from his rent-regulated apartment on 86th Street using one of the difficult-to-implement grounds, namely a claim that the apartment was not Mr. Sylvester's "primary residence."  The court denied the application, finding that the 89-year-old Mr. Sylvester had lived in his 900-square-foot, $1090 per month apartment (market rent would be $3500 - $4000) for some 45 years, had been registered to vote there all that time, received mail there, and "has deep roots in Manhattan."  Are you sympathetic?  Other facts mentioned are that he "spends most of his time" "wintering" at a condo in Florida and "summering" in East Hampton.  Also, that his "cars" are registered in Manhattan.  Now, I know that Jerry Seinfeld has multiple cars in Manhattan, but not a lot of other people, including many quite wealthy people, can afford that kind of luxury.

We keep thinking that we can achieve perfect fairness by government decree, but somehow the harder we try the farther we seem to be from the goal.