Completing the Destruction of New Orleans

Ronald Bailey | November 29, 2005

In the early 1980s, when I first moved to New York City, I colonized a friend's couch in the north Bronx for a couple of months. I have vivid memories of commuting to my midtown job past hundreds of abandoned apartment buildings in the borough. The city government had covered all those busted out windows with plywood painted to look like windows with curtains and potted plants. Why were all these buildings within a 30 minute subway ride of Lincoln Center, Macy's and Broadway empty? An economist once succinctly explained: "The Bronx was not devastated by an atomic bomb, but by rent control." Landlords simply abandoned their buildings when they could no longer make even enough money to repair them.

Now, the feckless mayor of New Orleans, Ray Nagin, and some Louisiana legislators apparently want to finish the destruction of his city wrought by the Corps of Engineers and Katrina by imposing rent control (audio) on the apartments that remain. If rent controls are imposed, New Orleans landlord Edward Young points out that he and many other landlords would have to consider simply taking their insurance money and going somewhere else.

There is, however, a silver lining: Rent control is one way to make sure that the wetlands New Orleans used to occupy are restored.

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|11.29.05 @ 1:02PM|#

It has mostly been a Disneyland for a long time already.

I've compared my experiences with the Big Easy with that of my parents and Uncles and Aunts and its easy to see that NOLA is a radically different place from what it was in 1930s, 1940s and 1950s.

|11.29.05 @ 1:05PM|#

I'm cool with rent control, if the rent control only applies to the neighborhoods where nobody in his right mind would live or build anyway.

And while we're at it, how about a law that bars Quakers from owning guns?

|11.29.05 @ 1:06PM|#

But, thoreau, where's the thrill in disarming the unarmed?

|11.29.05 @ 1:13PM|#

Thoreau--

When you live within a hundred miles of New York you always hear these rent-control legends: "I know this guy who knows this guy who knows a guy who has a three-bedroom apartment overlooking Central Park, and it's rent-controlled for only $400 a month!"

I don't know about that, but I did know a girl back in college; her family had a rent-controlled apartment in a Greenwich Village brownstone, for which they paid something like five hundred a month. And I never understood how their landlord even made enough to pay his property taxes on the building, let alone pay for upkeep. And just forget about a profit.

|11.29.05 @ 1:14PM|#

BTW, just so i can bitch about those who advocate a curtailment of liberty in wartime, rent control is another "temporary" war time measure that has never stopped. Much of the rent control policies in this country started as temporary measures in WWII in other words.

|11.29.05 @ 1:19PM|#

Jennifer-

I know some very affluent people whose rent controlled Santa Monica apartment is supposedly less than $800/month. Which is pretty damn good, no matter what sort of place it is. Assuming it's true.

Anyway, let's make a deal with the statists: They get to have their rent control, but only in places where nobody in his right mind will build anyway. And a strict ban on gun ownership by Quakers, Buddhist monks, and Catholic nuns.

|11.29.05 @ 1:21PM|#

Someone once pointed out that, if you want to ensure that a city will have housing for poor and middle class people, you should place rent controls on luxury housing and office blocks.

|11.29.05 @ 1:22PM|#

Thoreau, it's funny what you said about affluent Santa Monicans--my friend's family was pretty well-off, too. In fact, EVERY person I've ever known who's had a rent-controlled apartment in the city was a prosperous person with a rent-controlled luxury apartment; I have yet to meet a poor person in a rent-controlled place. So from what I personally have seen of rent control, it's a law to ensure that people who make five times as much as I do in salary, pay one-fifth as much as I do in rent.

And a rent-controlled lease is treated as property; you can actually will it to someone when you die.

M1EK|11.29.05 @ 1:23PM|#

Rent control is the stupidest way in the world to keep housing affordable, except for zoning laws. And zoning (multifamily restrictions; since single-family is NEVER going to be as affordable as multi-family in areas with non-cheap land) keeps the supply of affordable housing low in a hundred times as many places as does rent control, but oddly enough, the guys at reason and in this forum don't talk about it much. It COULDN'T be because so many putative libertarians live in the suburbs, could it?

|11.29.05 @ 1:25PM|#

Hey, I own a gun (several, in fact). But, of course, technically I am no longer a Quaker, although their is actually no bar to my being so since I actually still subscribe to many facets of the Quaker discipline. And the atheism is not an obstacle. Many Quakers today are, in fact, atheists.

Actually I have a friend who (with his wife) is a Libertarian and also a Friend. They caused something of a stir at the local Meeting House a few years ago with the "CHINA HAS GUN CONTROL" bumper sticker on their car.

Timothy|11.29.05 @ 1:25PM|#

And a rent-controlled lease is treated as property; you can actually will it to someone when you die.

Jeebus, I've stepped through the looking glass at last.

|11.29.05 @ 1:26PM|#

Calm down, M1EK. First, somebody is proposing rent control in an area that's been the subject of a lot of news coverage. Of course we'll be bitching about rent control. Would you be happier if we qualified our bitching with "Of course, zoning would be much worse"?

Second, people here bitch about zoning all the time.

D'oh, I do know the difference between there and their and when to use them.

M1EK|11.29.05 @ 1:27PM|#

Oh, and I forgot to mention, DESPITE that, local neighborhood wackoes in my town FIGHT big condo towers going up downtown on the theory that it will make housing LESS affordable.

most recent example:
http://austin.metblogs.com/archives/2005/11/give_me_a_yeahn.phtml

That type of discussion (where I spend a lot of time) is where I get the rep among the TRUE local leftists as the evil libertarian, in case y'all were wondering why I ever hang out here.

|11.29.05 @ 1:28PM|#

I own a double shotgun, renting out one side and living in the other with my family (very common in New Orleans). Rent control would be a great motivation to go ahead and knock down that wall so I can have a study and a guest bedroom. Result = 0 rental units. If the city would deregulate renovations I could make my house into 4 units and move to Houston.

Sorry, Isaac. I was just trying to pick something absurd, saying "ban gun ownership by the hard-core pacifists."

Whom should I have named instead of Quakers?

M1EK|11.29.05 @ 1:28PM|#

thoreau,

No, people don't, not in the sense that it keeps taller buildings from being built. When people here bitch about zoning, it's always in the "I should be able to pave my yard" category; NEVER about the "without zoning, we wouldn't have as much single-family crap neighborhoods around".

fyodor|11.29.05 @ 1:34PM|#

Calm down, M1EK.

Yeah, and lose your stripes, tiger.

|11.29.05 @ 1:35PM|#

I bitch about that all the time, M1EK, when I bother to post on those threads. It's not because of big condos that my 1,000 sq. ft. apartment in Northern Virginia is more than $1,500/mo. It's because of zoning restrictions on multifamily housing densities.

Oh, and I forgot to mention, DESPITE that, local neighborhood wackoes in my town FIGHT big condo towers going up downtown on the theory that it will make housing LESS affordable.

Welcome to Vienna, VA.

Timothy, can I assume you didn't previously know about legacy rent-control? Yeah, for someone hearing about it for the first time it is pretty insane. I seem to recall reading something about an attempt to do away with legacies, so that when a rent-controlled tenant dies the apartment goes on the open market, but I don't know how successful the attempt was.

|11.29.05 @ 1:36PM|#

When people here bitch about zoning, it's always in the "I should be able to pave my yard" category; NEVER about the "without zoning, we wouldn't have as much single-family crap neighborhoods around".

You must be reading different threads than me.

|11.29.05 @ 1:42PM|#

Legacy rent-control . . .

I could be wrong, but my understanding is that, at least in New York, rent control can only be passed on to a direct descendant of the leaseholder (i.e., child, grandchild).

I have also had the experience that the only people I know with rent-controlled apartments are already quite well-off. A friend of mine took over her parents' lease on a huge 2-bedroom apartment with full-wall corner views up 2nd Avenue and down 34th Street for $2,100 a month.

I actually do have a friend in New York who described in detail the legal process (he is a lawyer) by which he moved into an ailing relative's apartment, took two years to legally establish residency and since he is a relative, get on the rent control lease, and now he can maintain the rent control level when the relative dies. The apartment is a beautiful two-bedroom apartment in a very desirable location, for probably 25-30% of the market rent. He said the landlord fought this process at every turn, but my friend read all of the NYC laws on rent control and jumped through all the legal hoops. He also said the landlord never responds to repair requests except after the third or fourth call (for good reason, I think). Now he is basically locked in to this place for the rest of his life, and any family. It is absolutely insane, and almost impossible to imagine a poor non-lawyer being able to do this. I am not angry at him (he followed the law), but at an insane system that can produce this outcome.

|11.29.05 @ 1:43PM|#

I could be wrong, but my understanding is that, at least in New York, rent control can only be passed on to a direct descendant of the leaseholder (i.e., child, grandchild).

I think you're right. It's still a load of crap, though.

|11.29.05 @ 1:46PM|#

Blaming the abandonment of the Bronx on rent control is like blaming an 82 Chevy Citation's poor acceleration on using regular unleaded.

Maybe Ron should take a look at those same blocks, where the rent control laws are still in effect, and see how they're doing.

|11.29.05 @ 1:48PM|#

Which is not to say rent control laws are smart.

|11.29.05 @ 1:51PM|#

$2,100 a month

Rent controls are *supposed* to be eliminated when the rent goes over $2,000 - but a quick perusal of some of these regulations has convinced me that I probably don't grasp the details very well.

Oh, and the controls are supposed to go away when your income hits $175,000 per year.

Ed,

I am not angry at him (he followed the law), but at an insane system that can produce this outcome.

You should be angry at both.

joe,

Why don't you tell us how they are doing?

|11.29.05 @ 1:52PM|#

M1EK, talk to Joe.
People generally don't realize how important local government is and how corrupt and/or wacky their local officials are. Keep up the good work.

In North San Diego County, the locals have hooked up with the feds to start a train line to nowhere, connecting two bedroom communities. Once service starts, this line is going to carry a couple dozen surfers a day from Inland North County to Oceanside, and a couple dozen students from Oceanside to Cal State San Marcos. At a cost much higher than the price of just renting helicopters for those folks. And it's going to disrupt traffic so much, running trains through crossings that haven't seen any trains since the population was 1/4 what it is now, that it's sure to be closed down within a year of opening. So it will be a nice $100 million write-off for us and the feds to share. But I lack the youthful enthusiasm to fight SWIFT.

|11.29.05 @ 2:13PM|#

Joe: I actually spent the summer of 1997 roaming around the Bronx as a producer for an hour long special for ABC News talking to residents. It turns out that a lot of the buildings are coming back (except for the blocks and blocks of "public housing" which are still ratholes) because they have been abandoned and the city sold them. Often they are being refurbished by new foreign immigrants to the city. Also, many people now turn them into cheap condos, not rentals--thus avoiding any future attempts at rent control. BTW, does anyone know if condos were created as a way around rent control?

M1EK|11.29.05 @ 2:14PM|#

johnl,

Don't be so fast. I'm mostly in favor of rail transit, even heavily subsidized. Most of those "we could buy each rider a car!" arguments are pushed by lying sacks of shit like Wendell Cox.

MP|11.29.05 @ 2:27PM|#

I thought that the only regular around these parts who favored zoning was joe, and even joe qualifies his zoning preferences with "snob zoning sucks".

Me, I've spoken out at town meeting against the local planning & zoning commission numerous times. Sooner or later that'll come back to haunt me.

|11.29.05 @ 2:29PM|#

johnl,

I am amazed at the Daley-family-proportion corruption going on out there. The pension fiasco? Good work - the board would make Tammany Hall blush. I'd love to move out there, if I didn't have to pay taxes. I could live beside the ocean, leave the coffers cold, never pay my taxes, watch the county fold.

|11.29.05 @ 2:43PM|#

rafuzo,

Aren't they having some stadium problems too?

|11.29.05 @ 2:48PM|#

Sorry all for the wrong sig on the last post.

|11.29.05 @ 2:49PM|#

Ron,

With the low mortgage rates of recent years, the condo market has taken off while the rental market has been very weak. People who would otherwise be renting can buy (cheap) condos. I can think of one building in my city that was renovated as apartments (for the tax breaks only, and will doubtless be converted to condos in two years, when the deal expires), while townhouse condos have been going up left and right, and two deckahs are being condoized. There is no rent control in Lowell, so no, I wouldn't suspect that owners are going condo primarily to "get around rent control."

And now that mortage rates are rising, the condo market is still going strong, as the single family home market softens and people who would have bought an SFH are now buying condos.

|11.29.05 @ 2:51PM|#

Rent control is the stupidest way in the world to keep housing affordable, except for zoning laws.

M1EK, the idea of affordable housing is to make housing affordable for me, not you. Or to push all the "affordable" (i.e. low-life) housing to an area as far from me as possible. Geez, get with the program. Oh wait, you seem to understand that since you get all warm and fuzzy about your fetish of affordable transportation. The only people more selfish than conservatives are liberals.

|11.29.05 @ 2:56PM|#

rafuzo - Maybe Reason could do a special on San Diego. It's really unbelievable. Stadium problems, pension problems. Pack to many Republicans into a municipal government and look what it gets you. I don't want to be the good guy. I don't want to be the fall back funding source anymore.

|11.29.05 @ 2:59PM|#

Yeah, M1EK, if you weren't so selfish, you'd hate rail transport! Or something...

Russ D, you don't know dick about affordable housing, do you?

M1EK|11.29.05 @ 3:08PM|#

John L,

1. You signed the post as me. Good work.

2. I don't know enough about this San Diego line, but in every other instance where the "buy the riders a " line was used, it turned out to be complete and utter bullshit pushed by the Wendell Cox brigade. I am therefore highly suspicious.

|11.29.05 @ 3:47PM|#

MIEK, just check the demographics of the cities involved. Or look at Oceanside blvd where it crosses under the 5 in Google Maps. Ignore the Best Western I mapped to and just look at the offramp from the 5 North:
http://tinyurl.com/7wpvm

That's a Vons and Pizzahut opposite the offramp south of the tracks. You know, the types of places people like to stop on their way home from work. Those stores were built after the last train crossed there. What's going to happen to them when trains start running?

There is a story like that along every intersection along Oceanside blvd. Just follow the map east.

You heard it here first, this is going to be ugly.

|11.29.05 @ 4:09PM|#

I grew up in a rent-controlled(? -stabilized? I always forget the difference) apartment. Every time I gripe about rent control, my mother says things like "It's because we were able to afford this place that we lived as well as we did." Which I suppose is true - midtown Manhattan apartment for something like $350/mo?! - but somehow that doesn't comfort me. It's like being told "We live so well because Great-Grandpa was a notorious horse thief, so you should appreciate horse thievery."

I suppose I could inherit that place, but I don't really want to. Not just for philosophical reasons, but because the place is, predictably enough, in poor condition. The stove dates to 1937, the stairs are rickety, the hallways are rarely cleaned, and the heat and hot water are unpredictable. The only thing that makes it as good as it is is the fact that the super is an incredibly nice, consciencious guy, by pure happenstance.

I'd love to see some real numbers on rent-controlled apartments. Every time the topic is broached, the usual crowds wail that poor old grannies and hardworking immigrant families will be thrown out into the street, but the perception among the people I know is a little different: the people living in rent-controlled places are rich elderly ladies in good neighborhoods, while the young are forced to pay through the nose.

M1EK|11.29.05 @ 5:21PM|#

John,

I'm not a transit-at-all-costs-every-time guy; as a matter of fact, I got kicked off my city commission for daring to oppose a stupid commuter rail plan for Austin, but it was because it goes to the wrong place, not because rail is bad. The stories about grade crossings are the #2 common theme running through the Wendell Cox brigade's lies about rail transit - so when I hear _that_, I also tune out. After all, every single traffic light is a "grade crossing" of one roadway by the other - and in THAT case, innocent people can get hurt or killed, while in the railroad case, it's almost always jerks who went around the gates who are getting slammed.

|11.29.05 @ 5:52PM|#

>He also said the landlord never responds to repair requests except after the third or fourth call

It seems to me that if you're getting a NY apartment at 30% of market rents, the least you could do is pay for the occasional plumber yourself. "Greedy" doesn't do his attitude justice.

|11.29.05 @ 5:55PM|#

And zoning (multifamily restrictions; since single-family is NEVER going to be as affordable as multi-family in areas with non-cheap land) keeps the supply of affordable housing low in a hundred times as many places as does rent control, but oddly enough, the guys at reason and in this forum don't talk about it much.

Well, give the people who actually post Hit & Run items the hot links you have to stories about impositions of zoning, and they'll post about it, I'm sure.

It COULDN'T be because so many putative libertarians live in the suburbs, could it?

Dunno. I live in a townhome about a mile from my local downtown. I just work in an area that's suburban with relatively relaxed zoning laws.

John,

If M1EK doesn't like someone its a sure sign that he or she is making some sense.

|11.29.05 @ 5:58PM|#

>BTW, does anyone know if condos were created as a way around rent control?

Probably not, since (as I understand it) you can't go condo without Rent Board approval, which they're loathe to give (same thing in San Francisco).

R C Dean|11.29.05 @ 6:13PM|#

loathe to give = won't cough up without being given some, umm, consideration.

|11.30.05 @ 5:15AM|#

>loathe to give = won't cough up without being given some, umm, consideration.

I'm sure a generous donation *cough* extortion *cough* for some pet project or another would grease the wheels.

One of the ways to get around San Francisco's rules is to sell a property as tenants-in-common rather than as a condo. No condo == no Rent Board approvals needed. Needless to say, they don't like the loss of power so they're trying to get authority to regulate TIC transfers of residential property.

Sadly SF city government doesn't seem to understand how rent control makes housing unaffordable, nor do they understand how restrictive zoning (most of the city is under a 3 story or less height limit, hardly the sort of density a city like SF needs to affordably accomodate its residents) does the same. That's why there's so little high-rise residential housing in San Francisco.

|11.30.05 @ 9:21AM|#

Bob Smith, "most of the city" doesn't need to have tall buildings. 5-10% of the total land area zoned for highrises creates the possibility for a boatload of units. And if restrictive zoning is your thing, fight the real enemy: suburban snob zoning.

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