The New York Sun reported today that Governor Paterson pays $1,250 to live in a rent-stabilized apartment in Central Harlem. This reality, given that the governor has a second home as well as a third (the Governor’s Mansion in Albany), has reawakened the monster question surrounding New York City rents: What if we just got rid of stabilization? Wouldn’t the fresh supply of market-rate apartments drive rents down? And wouldn’t the rich forever be forbidden from freeloading off the stabilization laws?
Luckily, we have Cambridge, Mass., to answer these questions.
I wrote in November about what happened to the rental apartment stock in Cambridge in the 1990s after Massachusetts ended rent regulation and made most apartments market-rate. (Cambridge, along with Boston, was one of a handful of Massachusetts municipalities that still had rent regulation at the time.)
In a nutshell, rents shot up across Cambridge and stayed up; and the town, home to Harvard and M.I.T., became even more a bastion of the well-heeled. Landlords did what they’re entitled to do in America: They raised rents on their apartments as high as the market would bare.
“Five years after Massachusetts voters ended rent regulation … in Boston, Brookline and Cambridge,” began a New York Times article from July 2000, “rents have taken sizable jumps, the cities are spiffier and less pockmarked by deteriorating neighborhoods and many poorer people have been forced to move to communities farther from the urban core. … [A] leading landlord in Cambridge found that rents for his company’s formerly controlled apartments have doubled.”
Rent stabilization in New York City, which the state started in the late 1960s in response to higher rents (among other things) driving out the middle class, is one of the most successful affordable-housing initiatives in the post-World War II United States.
A few affluent people do skirt the system, including, apparently, the state’s chief executive, who could easily afford even Manhattan market rates. But, should the city’s one million stabilized apartments (a stock that dwindles little by little each year) ever be deregulated, those same market rates, already at record highs in many neighborhoods, would likely shoot upward. And stay there.