Land Use

Rent Control for the Rich, From NYC to Hanoi

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We didn't start the fire!

Rent control is an idea that has, thankfully, mostly fallen out of favor in America. The crumbling buildings and raging fires in the South Bronx and throughout New York City in the '70s went a long way in convincing people that perhaps landlords should be allowed to collect enough rent to cover maintenance costs, and it's one of the few issues on which economists of all stripes largely agree.

But there's at least one person who remains utterly unconvinced: New York State Assembly Speaker Sheldon Silver (D-Manhattan). For years Silver and his friends in the NYC-dominated Assembly have tried to limit landlords' ability to decontrol units occupied by wealthy renters, but the state Senate, which is controlled by suburban and upstate interests, has kept the Assembly's statist impulses in check.

That is, until now. Gov. Andrew Cuomo (D) is trying to make good on his campaign promise to cap property tax increases, and the New York Daily News reports that Silver has moved to hold the proposed legislation hostage by linking it to strengthened rent control laws—a tactic the pols are scrambling to deny.

The New York Times explains what the proposed rent control law would mean in practical terms:

About one million apartments in the city's five boroughs, roughly half of all rental units, are covered by the existing laws, which sharply limit landlords' ability to raise rents and keep many apartments, particularly in Manhattan, renting at well below market value. Currently, apartments become deregulated when the rent reaches $2,000 and total household income of the tenants is at least $175,000 annually for two years.

Mr. Silver said he would like not only to preserve those protections, but also to expand them, by raising the income and rent thresholds.

"You want to preserve people making $210,000, $225,000 a year, living where they're living," Mr. Silver said.

Perhaps Shelly could take some advice from Nguy?n C? Th?ch, former foreign minister of the Socialist Republic of Vietnam, who saw the perils of rent control in his own country as early as 1989:

Addressing a crowded news conference in the Indian capital, Mr. Thach admitted that controls…had artificially encouraged demand and discouraged supply…so all the houses in Hanoi had fallen into disrepair.

"The Americans couldn't destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy," he said.

More Reason on rent control here.

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  1. the rent’s too damn high!

  2. done in one.
    well done. last one out turn off the lights

  3. Could you imagine what would happen if the prices of car brakes and brake repairs were capped at below market values?

    Would you want to be on the roads?

    1. The prices of using roads are capped below market values.

      1. I would support having a free market in roads as well. Economist Walter Block has written on this topic a great deal.

      2. Actually you are wrong . The price of using roads is artificially high. DUCY?

        1. Oh really? I wasn’t aware that local roads actually cost less than $0 to produce. Because that’s the amount of money that drivers pay in user fees for them.

          1. Gasoline taxes serve as a user fee. The more you drive, the bigger your vehicle, the more you pay in gasoline taxes.

            1. The gas tax only funds state/federal highways, and they don’t even cover the full operating costs, to say nothing of the capital costs, cost of land, and enormous opportunity cost (the land underneath the West Side Highway alone is worth hundreds of billions, if not a $1+ trillion). Local roads are paid for almost entirely out of general revenues, which are actually levied disproportionately on people living in multifamily residences, who are less likely to own cars to begin with.

              1. RRRAAAAWWWWRRRRR!!! STEVE SMITH ON ROAD TO RAPE ROADS!

            2. The gas tax only funds state/federal highways, and they don’t even cover the full operating costs, to say nothing of the capital costs, cost of land, and enormous opportunity cost (the land underneath the West Side Highway alone is worth hundreds of billions, if not a $1+ trillion). Local roads are paid for almost entirely out of general revenues, which are actually levied disproportionately on people living in multifamily residences, who are less likely to own cars to begin with.

  4. I believe the lesson here, as always, is that central planning is unsustainable.

  5. The crumbling buildings and raging fires in the South Bronx and throughout New York City in the ’70s went a long way in convincing people that perhaps landlords should be allowed to collect enough rent to cover maintenance costs[…]

    The fires were actually acts of arson committed by landlords strapped by the rent controls. The interesting thing is that, rather than eliminating the controls, NY simply passed a statute assuring the now homeless tenants they would be placed first in line for receiving government-subsidized housing. This encouraged other tenants to commit arson themselves, even going so far as to move their TVs, appliances and furniture to the sidewalk before torching their apartments.

    Such is socialism at work.

    1. Not True,

      The fires were set to collect insurance premiums because NOBODY was paying the RENT. And, nobody wanted to live there. I know…I’ve been there and was there at the time.

      Even with NO RENT CONTROL, nobody would live there.

      So, the bronx is a bad example.

      1. Re: Lucky Pierre,

        The fires were set to collect insurance premiums because NOBODY was paying the RENT.

        That’s only because Rent Control laws also included very strict eviction rules.

  6. “You want to preserve people making $210,000, $225,000 a year, living where they’re living,” Mr. Silver said.

    Somebody needs to take Mr. Silver to task for trying to protect the ultrarich, as we all learned during the tax debate last year that anybody making more than $200,000 dollars a year is a filthy money-grubbing capitalist who made their fortune by exploiting widows and orphans.

    1. Back in 1998, Sheldon Silver argued that New York’s legislators were making less than minimum wage, and thus they needed a raise.

      At the time, they would have been earning minimum wage — if they were working 31 hours a day, 365 days a year.

      Not only did the asshole get his raise, he’s still Assembly Speaker.

  7. Sheldon Silver (D-Manhattan)

    Looking out for the Little Guy, as usual.

  8. “But there’s at least one person who remains utterly unconvinced: New York State Assembly Speaker Sheldon Silver”

    What makes anyone think that Silver is unconvinced that rent controls hurt the housing market? That he feverishly pushes to extend controls does not mean he believes in them. It only means that this position strengthens him politically. And that’s his first priority – not what’s good for the NYC housing market.
    Silver is no fool. He knows that the rent system has been a disaster.

  9. “Look at all those blighted apartment houses. If only we could transfer them to some civic-minded developer who would tear them down and build some shiny pretty luxury condominiums!”

  10. Anybody named Sheldon should be kicked in the box.

  11. Price controls only appeal to the fucking idiotic and Manhattan Democrats (BIRM), as the logical outcome is so obvious even a child can see it.

  12. I’m just hoping that the Repubs don’t cave in and go for Silver’s “trade”. Silver is very clever. He’s trying to split the real estate industry and the Republicans. I hope they stand fast.
    What do you think the chances are?

  13. Oh my god when did the Indians take over Hanoi?

    1. Uh, nevermind, I see that the PRESS RELEASE was in India, not that Hanoi is an Indian capital. =b

  14. Assar Lindbeck (a Swedish Socialist economist) once said “In many cases rent control appears to be the most efficient technique presently known to destroy a city?except for bombing.”

    1. Wow, and I posted that prior to reading the Vietnamese minister talking about Hanoi.

  15. Give Silver what he wants. Pass a law letting rent control be under the auspices of the NYC Council. NYC voters should get the government they deserve, good and hard.

  16. There’s no rent control in Saigon either, and the prices are dropping due to increased supply.

  17. THE Steve Smith?

      1. GO AWAY. RAPING!

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