Tag: Rent Control

Tackle the Everlasting Rent-Control Mess


The Buckeye Institute and I have submitted to the US Supreme Court an amicus curiae brief urging the court to review the constitutionality of 2019 amendments to New York’s Rent Stabilization Law. That law further tightened the wall-to-wall restrictions, by among other things removing the provisions for vacancy decontrol when rents reached a certain level, last set at $2,774.76, and eliminating landlords’ previous option of raising rents by up to 20 percent between unrelated tenants. The challenge to that law in 74 Pinehurst LLC v. New York (2023) was brushed aside by a unanimous Court of Appeals for the Second Circuit on the basis of its view of established law.

That decision should be regarded as the next chapter of a self-inflicted tragedy that has cost the city and its citizenry billions of dollars in real economic growth. It is a progressive fantasy that price controls of this sort simply transfer wealth from greedy landlords to helpless tenants. The truth is otherwise.

The laws that mandate wealth transfers create a perverse set of incentives on both sides of the market. Potential developers are reluctant to invest in building or maintaining rental properties if their returns can be snatched away by legislative fiat. Current tenants, all local voters, will lobby for a system of price controls, from which they receive huge benefits, sufficient to fund their second homes in New England. Yet local tenants don’t care that everyone else—including new arrivals to the city—gets hurt when supply shrinks and quality of services declines because of insufficient revenues, thereby cutting needed tax revenues because of sagging property values. The administrative costs of running, or complying with, the city’s euphemistic Tenant Protection Laws add tens of millions.

Joe Selvaggi talks with Greater Boston Real Estate Board’s President and CEO Greg Vasil about the likely effect to all residents of Boston from Mayor Wu’s rent control proposal now before the city counsel.


Hubwonk host Joe Selvaggi talks with Doug Quatrocchi, executive director of Masslandlords.net about the historical effects of rent control in Boston and Cambridge in the past and discuss the gap between the stated goals and the likely outcome of Boston Mayor Wu’s 25 member Rent Stabilization Advisory Committee.


Hubwonk Host Joe Selvaggi talks with economist and MIT Professor Chris Palmer about his research and analysis of the effects of rent control in Cambridge during its 25-year implementation and in the aftermath of its repeal.


Rent Control Laws Are Unconstitutional


New York City recently implemented its far-reaching Housing Stability and Tenant Protection Act of 2019. That law enacted extensive amendments, all plaintiff protective, to New York’s 1969 Rent Stabilization Law (RSL). The Act imposes the RSL throughout the state. It also reverses the state’s earlier position on Luxury Decontrol for High Income Tenants. Formerly, when a tenant earned over $200,000 per year and paid a rent of at least $2,700 per month, the unit was decontrolled to allow the landlord the benefit of market rate rents. But under the new law, well-heeled tenants can continue to pay at most 15 percent of their gross rent on city housing.

The new act also sharply limits rent increases when landlords make improvements on a tenant’s premises. The older system allowed increases of up to 6 percent per annum, but the newer rules cap that figure at 2 percent, which makes it highly unlikely that a landlord can recover the costs of those improvements (assuming these are still made) over their useful life.

Finally, the new law also works a major change for the many units covered by the RSL but which are rented at below the regulatory cap. These below-cap rentals show how rents are in many areas constrained solely by powerful market forces: landlords cannot move up to the maximum rent levels when demand is not there. Nonetheless, the 2019 law treats the tenant’s current rent as a statutory base for calculating any future rental increases for that tenant. These landlords are now severely restricted in the extent by which they can raise rents going forward.

Manhattan Institute’s Michael Hendrix interviews Mayer Brown partner Andrew Pincus, the lead attorney in a lawsuit taking on New York State’s sweeping rent-regulation laws.

In 2019, New York strengthened its already-strict rent regulations, while state legislatures in Oregon and California approved caps on rent increases. Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders have even proposed national rent-control policies. Pincus explains what’s wrong with rent control, from violating due process and property rights to shutting out newcomers attempting to find housing in cities.

Quote of the Day: Price Controls


“Four things have almost invariably followed the imposition of controls to keep prices below the level they would reach under supply and demand in a free market: (1) increased use of the product or service whose price is controlled, (2) Reduced supply of the same product or service, (3) quality deterioration, (4) black markets.” – Thomas Sowell

Did anyone notice California’s governor imposing statewide rent control on September 10? It was done to make housing more affordable and more available. It was sold as a means of fixing the homeless crisis. Of course, the cities that already had rent control are the cities with the greatest housing shortages and highest rents, but why let reality intrude on a great theory.

Edward L. Glaeser discusses how the proliferation of unfair laws and regulations is walling off opportunity in America’s greatest cities at the Manhattan Institute’s 2019 James Q. Wilson Lecture.

We like to think of American cities as incubators of opportunity, and this has often been true—but today’s successful city-dwellers are making it harder for others to follow their example. In this year’s Wilson Lecture, Glaeser addresses the conflict between entrenched interests and newcomers in its economic, political, geographic, and generational dimensions.

Nicole Gelinas and Howard Husock join Seth Barron to discuss New York’s landmark rent-regulation law and its potential impact on housing in the city and state.

Lawmakers in New York recently passed the toughest rent-regulation law in a generation, imposing new restrictions on landlords’ ability to increase rents, improve buildings, or evict tenants. The bill made permanent the state’s existing rent regulations, meaning that future legislatures will find it harder to revisit the issue.

Bert Stratton joins City Journal associate editor Seth Barron to talk about Stratton’s experience as a member of one of the most despised but important professions: landlord.

Stratton is a musician and blogger, but he makes his living managing apartment units and retail space in a suburban neighborhood outside of his hometown of Cleveland, Ohio. He prefers to call himself a “landlord-musician.”

Richard Epstein describes how government interventions have driven the Golden State’s housing prices to extraordinary heights.

Silicon Valley, New York City are Holding Us Back


NYCHA_Logo_480x480Big cities, we’re told, are engines of productivity. And that’s mostly true. Regions with capital and a high concentration of technological innovation — places like California’s Silicon Valley — employ people, drive economic growth, do all sorts of good stuff, right?

Well, not so much. And the reasons they’re lagging are interesting. Thanks to Greg Ferenstein, I found this study, from the University of Chicago, that says that it all comes down to… regulation. Land use regulation, at that. From the study:

We study how growth of cities determines the growth of nations. Using a spatial equilibrium model and data on 220 US metropolitan areas from 1964 to 2009, we first estimate the contribution of each U.S. city to national GDP growth. We show that the contribution of a city to aggregate growth can differ significantly from what one might naively infer from the growth of the city’s GDP. Despite some of the strongest rate of local growth, New York, San Francisco and San Jose were only responsible for a small fraction of U.S. growth in this period.

The Libertarian Podcast: Understanding Property Rights


In the latest installment of The Libertarian podcast, Professor Epstein takes us through a thorough consideration of the issue of property rights: how the Founders thought about them, when the courts started distorting them, and what can be done to restore them to reasonable strength. Take a listen: