Tuesday, August 26, 2014
Should be required reading among Hawaii legislators: “Rent control in New York City”
New York City suffers from an inexorable housing crisis. Since World War II, through economic boom and bust alike, there has been an all-too-small supply of apartments. Even during some of the real estate industry's biggest years, serious housing problems persisted. Perhaps the most obvious and painful reminder of the crisis is the fact that thousands of people live on the streets or in shelters.
Several strategies have been adopted in the effort to stem New York City's chronic housing shortage. In a city where two-thirds of the households rent their dwellings, rent regulation is an important part of that effort.
But the crisis persists despite rent regulation, giving rise to the question: Is rent regulation part of the problem or part of the solution? An examination of the housing market today leads to the following conclusion: Though the system has problems, tenants are much better off under rent regulation than they would be otherwise, and the public interest of New York City is served.
by Larry Geller
This article is intended to introduce the concept of rent control to the discussion of homelessness in Hawaii. You can skip directly to the bottom for links to important source material. This material has not appeared elsewhere in any state or city discussions that I am aware of.
Both New York City and Honolulu currently face a crisis in homelessness—both have record populations living on the streets. And so far, Honolulu, anyway, has done nothing to make things better. The City Council’s latest approach is to offer several bills that would, if passed, criminalize homelessness, while as yet providing no Housing First capacity.
But one has to look at the other end of the pipeline as well. What can be done to keep people in the homes that they have?
There are a number of aspects to this. One, which will have to be taken up in a later article, is the state’s own responsibility for dumping people onto the streets by cutting off their mental health services. Here, we will discuss rent regulation. Again, just skip to the bottom for the reference links.
New York, unlike Hawaii, has long implemented measures to keep people in their homes or apartments. A regime of rent regulation has been in place since the 1920s. It would seem to be unthinkable in Hawaii to regulate rents, but if that is not done, then as costs increase and living-wage jobs continue to fall behind the rate of rent increases, more people will find themselves unable to keep a roof over their heads.
Nor will the state’s development plans provide a solution. The HCDA is determined to install massive amounts of “snowbird” housing in Kakaako, for example, that will not benefit those who are facing perpetual rent increases.
In fact, the housing boom, as it is being implemented, will arguably make things much worse. It’s not just a question of who needs that $100 million penthouse with its infinity pool, or who needs the high-priced New York grocer that will serve another luxury building, but how, for example, will elderly residents elsewhere on Oahu compete for caregiving services against the Kakaako wealthy, who will drive up prices for a very limited resource?
In New York, a reporter once wrote that she was writing her article in a rent-controlled apartment looking out at a $31 million penthouse, a record selling price at the time. Some luxury housing and affordable rentals can co-exist.
They can co-exist if they are made to co-exist, otherwise: not.
I find that not one person I have spoken to in Honolulu, unless they have lived in New York at some time or have relatives there, knows anything at all about New York’s system of rent control (several other states and municipalities have their own systems). To fill that gap, I would love to assign as required reading, a paper available on the Internet that explains how rent control works in New York City.
Who should read this? All of our state legislators, the housing czars and their various task forces, committees and working groups, and advocates wanting to learn more about rent regulation.
The full report is Rent Regulation in New York City: A Briefing Book. It’s certainly dated, but it’s the most accessible explanation of a system of rent control and stabilization that I have found so far.
Or just read this appendix: The Rent Regulation System in New York City. Here is the contents of that appendix:
A Brief History
New York State Rent Control
City Rent Control
The Rent Stabilization Law of 1969
Maximum Base Rent System
Senior Citizen Rent Increase Exemption
Emergency Tenant Protection Act of 1974
Omnibus Housing Act of 1983
The Current System
Notes to Appendix B