[mhb]

Here's what's wrong with it (in the case of rent controlled apartments in NYC).

The city has embraced rent control as a way of foisting the cost of "affordable" housing on landlords. As a result, apartments constrained to below-market rents receive below-market maintenance. Now illegal subletters seek to capture the benefit of this market distortion.

But maybe you're right - the way to fix this problem of deteriorating housing is for the government to become more involved in micromanaging the illegal subletting.

[JackFr]

You're both right and wrong. Right about the destructive and counterproductive effects of rent control and rent stabilization.

Wrong about why we are still saddled with these laws. The dirty little secret is that owners of condos and coops in the city know that by constraining the supply of housing in the city, their properties appreciate in value.

[busterarm]

As far as rent control's end of it, I call bullshit. There are fewer than 40,000 rent controlled apartments left in NYC. Rent stabilization is a lot higher (~800k) but it's not as good at keeping the prices down.

There are much worse problems constraining housing supply like how NY is zoned (though Bloomberg did a lot to change this). Zoning that controls the Floor-Area Ratio in many neighborhoods keeps old 4-story tenement buildings from being knocked down in favor of denser housing.

Worse still are minimum parking requirements where landlords are forced to build or provide parking to tenants when it's just not possible. Sunnyside, Queens is the perfect example of this problem.

[JackFr]

Maybe I overstated the case. You'll get no argument from me.

My only point was that while rich people everywhere use zoning to constrain housing and make their own properties more valuable through public policy, in NYC the rent stabilization and control laws have similar effects while masquerading as enlightened social policy.

[busterarm]

Well, rent control came about a long time ago when the city was really broke and had serious problems. The city has really been trying their best their best to get rid of it for at least 20 years now. The city would rather have poor folks confined to housing projects and "set asides" in new construction through lottery systems. Same effect but they don't have the same history and stigma of rent control.

Obviously there's still a need for these programs but people have extreme reactions either way based on their politics.

What I will say is that rent control, aside from the affordable rents, gave me huge opportunities as far as what schools I could go to and socially. If I had to live in other areas for low-income folks growing up, there's a good chance I wouldn't have come as far as I have.

[chimeracoder]

> in the case of rent controlled apartments in NYC.

This is not the issue.

There are very, very few rent-controlled apartments left in NYC. Almost nobody who works in the tech industry here has one, because it requires having lived in the same apartment since the 1970s. If you have one, though, you could easily be paying 5% of market rent.

Rent stabilization is a very different set of laws altogether, and these apartments are also vanishing slowly.

As for true rent control, landlords would love it if their rent-controlled tenants were to sublet their apartment on AirBNB. That would allow the landlord to kick the tenant out and charge market rent - 20 times more - for the apartment.

[mhb]

I assume that the people illegally subletting their apartments don't just work in the tech industry.

You are right to make the technical distinction between NYC's "rent control" and "rent stabilization", but both have the same negative consequences for housing maintenance and creation.

According to [1], in 2011 about 47% of NYC housing units were rent-regulated.

[1] http://furmancenter.org/files/publications/HVS_Rent_Stabiliz...

[chimeracoder]

> I assume that the people illegally subletting their apartments don't just work in the tech industry.

People subletting their apartments aren't subletting rent-controlled apartments, by and large. This doesn't apply in other cities, but in NYC, any listings you see on AirBnb are almost certainly for unregulated apartments.

> According to [1], in 2011 about 47% of NYC housing units were rent-regulated.

73% of those (34% of total apartments) are pre-1947, which are regulated, but most of those are under a separate provision, which means they aren't subject to the same restrictions as what we're talking about here.

[mimiflynn]

I live in Prospect Height in Brooklyn, at the very edge of gentrification where rent is booming on one site of the street and cheap on the other. The people that live above me (they have been on the lease for 30+ years, so they have cheap rent) have been illegally subletting their apartment for months now to a group of 20 or so loud and unruly people. We know this because the landlord tried to evict them and hired a private investigator to look into the situation. The thing is, no matter how much we complain about them being loud, they still pay their bills on time, so my landlord has been at a loss as to how to remove them. He would love to kick them out and renovate the apartment and charge many times as much as is currently being paid, but he can't.

My point is, rent-controlled apartments are being subletted. The situation in my building is not a fringe case. Craigslist and word of mouth illegal subletting is common. AirBnB is not the only name in the illegal subletting game in NYC, but they are the only name in luxury illegal sublets.

[chimeracoder]

> The thing is, no matter how much we complain about them being loud, they still pay their bills on time, so my landlord has been at a loss as to how to remove them. He would love to kick them out and renovate the apartment and charge many times as much as is currently being paid, but he can't.

If they are rent-controlled, even if they are paying their rent, he can evict them with no problem.

The relevant government agencies have a moderate amount of information line, but I'd recommend calling them instead. I've done this before; they're very friendly and helpful if you call them on the phone. I'd recommend giving them a call and asking for advice on the eviction process:

http://www.nyshcr.org/rent/ http://www.housingnyc.com/html/about/about.html

[dantheman]

The problem is rent control - get rid of that and the market distortion goes away.

[busterarm]

You are correct that there are very few rent-controlled apartments left in NYC. The way succession rights work make it hard for family members to continue to keep the apartment.

I grew up in a rent-controlled apartment in midtown manhattan that my mom has lived in since the 70s (you have to have lived in the apartment since before the end of 1971, actually).

However, it's not true that you could easily be paying 5% of market rent. My mom is paying about 50% of market rent and here's why:

Every 2 years the landlord is allowed to increase the rent by up to 7.5%, not exceeding the maximum base rent. Housing votes to increase the maximum base rents and ends up voting in favor of it maybe 3 times a decade or so.

However, if the landlord makes capital improvements to the building, they're allowed to increase the rent and in buildings in good areas with rent controlled tenants, they often do. Capital improvements let them raise the rent a lot more than that 7.5%.

My mom paid $318/mo for her apartment in 1984. If housing had voted to increase the maximum base rent every single time and the landlord increased the rent 7.5% every two years she would be paying $875. But this hasn't happened. Even so, she pays nearly double this amount because of capital improvements made to the building over the years.

They've even fucked her over and increased her rent based on capital improvements to the apartment she made herself out of pocket (updated wiring, renovated bathroom, etc).

[driverdan]

How are they fucking her over? She's fucking over the owners by forcing them to charge below market.

[busterarm]

The law is the law. If a landlord doesn't like the law, they don't have to be a landlord.

As someone who used to work at a tax certiorari firm, I can tell you there's just as much fucking over between the landlords and city/state tax money. Landlords are making money for not doing a whole lot except owning land. New York landlords make a killing. I've seen their returns. There are landlords who leave large portions of or entire buildings vacant _on purpose_.

If you really want to go down that rabbit hole, we can talk about how land ownership and the tax structure is a massive wealth extraction from the lower classes.

Don't give me that bullshit argument.

[busterarm]

Actually, to more directly respond to your comment:

So when you have problems with your wiring that your landlord refuses to fix (that are required to be fixed by housing regs) you have two options: a) complain and wait months/years for action or b) fix it yourself out of pocket.

You choose option b and then the landlord raises your rent. You don't think that's getting fucked over? You think tenants should put up with shitty (below required) conditions just because the rent is cheap (as regulated by law)?

Wow.

[epc]

Rent control and rent stabilization are controlled by New York State. City politicians can stamp their feet all they want, but the laws are state, not city laws.

Both sets of laws will (in theory) lose effect if the city drops below 90% occupancy for a year.