City Rent Regulation: Leave It Alone

With elected officials insisting that they’re serious about bringing change to city and state government, may we suggest that reform

With elected officials insisting that they’re serious about bringing change to city and state government, may we suggest that reform isn’t simply a matter of changing a few election laws or putting the brakes on wasteful spending. Some laws need fixing, and some laws need to be left alone.

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Take the significant matter of housing, for example. Lawmakers in Albany are considering a measure to increase the threshold above which regulated rental apartments go on the open market. Currently, under the provisions of a law passed in 1993, when rent on a vacant regulated apartment hits $2,000, the apartment is liberated from regulations and is placed on the free market. The so-called “vacancy decontrol” was a compromise measure passed nearly two decades ago when the state was under intense pressure to do away with rent regulations all together. About 100,000 apartments in the city have been deregulated since 1993.

Tenant groups have been pushing the state to increase the threshold, which would have the effect of slowing conversions to the free market. Now, however, the Real Estate Board–which represents landlords–has indicated its approval of an increase in the deregulation ceiling. The board may have good reasons for this surprising reversal of policy, but it’s a bad idea. New York has too many regulations–some one million apartments in the city still are subject to rent laws written during World War II. Increasing the rent ceiling would hurt the real estate industry and further the city’s image as a world-class capital of red tape and overregulation.

The best course of action here is inaction. Let the ceiling remain where it is.

On the other hand, if politicians are intent on doing something relating to housing, they could close a silly loophole in the city’s real estate assessment process. Thanks to loopholes and just plain incompetence, some of New York’s most valuable apartment buildings are assessed at ridiculously low values, and so residents living in co-ops are paying ridiculously low property taxes. A recent story in the Post noted that the city has assessed 778 Park Avenue–the entire building–at $25.7 million. A single apartment there sold for $26 million last year, the paper reported.

That’s just crazy. At a time when the city is trying desperately to generate new revenue, it should make sure that the assessment process makes real-world sense. People who own co-ops in some of midtown’s most prestigious buildings should pay their fair share–and not substantially less than their neighbors who live blocks from Park or Fifth avenues.

These two measures–leaving the rent ceiling alone, and making the assessment process fair–shouldn’t require much effort. But both could help the state and city enormously.

City Rent Regulation: Leave It Alone