“Freeze the rent,” half a million New York City registered Democrats said in June, when they ranked mayoral contender Zohran Mamdani high on their primary ballots, making him the nominee and quite possibly the next mayor.
A debate on whether government should control how much renters pay once seemed settled: No, economists agreed — it leads to too many market distortions. But this primary cracked it open again, bringing political and social rationale to bear against the economic argument, thanks to voters who find the city unaffordable and the current administration’s emphasis on business friendliness unpalatable.
After flirting with some price controls early in the 20th century, New York formalized rent control after World War II to address a shortage of affordable apartments, and rent stabilization in 1969. Over the following decades, the program shrunk, following amendments that let landlords deregulate units, until its 2019 expansion, when a state law did away with most methods for leaving stabilization, preserving the 1 million units left in stabilization.
The Real Deal asked leaders on each side of the issue to put their best case forward, in a new magazine feature called The Debate. Kenny Burgos, a former state Assembly member and CEO of the New York Apartment Association, a group of property owners and managers, argues no to controls on rent. Cea Weaver, who represents tenants at the New York State Tenant Bloc and Housing Justice for All, and was on the ground for rent-freeze policies during the primary, says yes.
NO!
Kenny Burgos
CEO, the New York Apartment Association
New York City’s affordable housing crisis is largely driven by a lack of supply. The 2023 Housing and Vacancy Survey found a vacancy rate of just 1.4 percent — functionally zero. But older rent-stabilized buildings provide the majority of affordable housing in New York City.
Most economists agree that rent control schemes reduce incentives to build housing. Decades of research shows that strict price controls suppress new construction unless offset by strong pro-housing policies.
In New York, rent stabilization has become a major barrier to addressing housing supply because it is unusually rigid and regressive. Since 1974, the city has declared a “housing emergency” every three years based on a vacancy rate below 5%. This is necessary, under the law, to keep rent stabilization in place, and local politicians treat each renewal as a success. But low vacancy keeps the emergency going, and the policy discourages new housing, keeping vacancy low.
This system is a global outlier. Nowhere else are rent controls structured to rely on chronic scarcity. A healthy vacancy rate — between 8 percent and 10 percent — empowers tenants by giving them more choices and bargaining power. This should be the goal of the city.
“This system is a global outlier. Nowhere else are rent controls structured to rely on chronic scarcity.”
Austin, Texas, is a case in point. Rapid population growth sparked a construction boom that increased housing options and pushed rents down, even for high-quality apartments.
In Austin, a modern three-bedroom, two-bath apartment in a desirable neighborhood rents for around $2,650. In Manhattan, a comparable unit would rent for $8,000 to $10,000.
New York’s rent control rules are also uniquely hostile to long-term investment. It is the only system in the U.S. that doesn’t guarantee rent increases in line with inflation. Even the recently passed “good cause eviction,” which is a form of rent control on more expensive market-rate units, guarantees a minimum increase of 5 percent plus inflation.
Over the past decade, the Rent Guidelines Board has approved rent adjustments roughly 1 percent below inflation annually, while property taxes have steadily risen. This has meant shrinking revenue for building owners, which threatens the financial health of older housing stock.
Currently, privately owned rent-stabilized buildings operate with roughly half the funding of similar NYCHA buildings, and do so with better quality.
Other places have more balanced rent control schemes. In California, rent boards are required to adjust for inflation, and property tax increases can be passed through to tenants. In Minnesota, landlords can raise rents by 3 percent, with appeals up to 8 percent if operating costs rise.
Because New York’s rent policy is structurally tied to scarcity, the city will never see abundant housing under the current approach. If New York City is serious about creating affordable housing, it must increase supply.
YES!
Cea Weaver
Director of New York State Tenant Bloc and Housing Justice For All
Homes should be for rest, family and community. But for the real estate industry, “housing” is an investment vehicle. Profit comes first and a place for New Yorkers to live well is a distant concern.
A system that relies on the profit motive, as ours does, leads to horrendous housing outcomes. The profit incentive produces an endless appetite to hike rents, reduce spending on repairs and maintenance, and pursue eviction. Our neighborhoods become less unaffordable, and housing instability threatens our collective ability to access education, healthcare and employment.
Rent stabilization is a proven policy that can interrupt this vicious cycle and keep our communities stable and whole, while balancing the need for buildings to cash-flow in order to function as housing.
Under New York City’s current rent stabilization system, renters have the right to renew their leases to predictable and regular rent adjustments and to pass their unit onto their family members. This basic set of rights engenders higher-quality housing, as tenants can request repairs free from the fear of retaliatory eviction, and they do so, research shows.
Rent stabilization encourages affordability without direct government subsidy. Over 2.4 million tenants live in rent-stabilized apartments, including 37 percent of low-income households, triple the number in public housing and subsidized housing.
“Rent stabilization is a proven policy that can interrupt this vicious cycle and keep our communities stable and whole, while balancing the need for buildings to cash-flow in order to function as housing.”
As the federal government threatens to cut housing subsidies like Section 8, protecting and expanding rent stabilization is more important than ever.
Rent-control policies ensure generational stability without homeownership. Stable rents allow tenants to build lives without constant fear of eviction or sudden rent spikes, promoting vibrant communities and a healthy housing market.
There is a wide acceptance that predictable costs are a good thing and a healthy component of a functioning market. It’s why, for example, property owners benefit from fixed-rate mortgages. Renters should have access to the same stability, especially as homeownership — always a myth, but a potent one — becomes unattainable for millions.
Importantly, rent stabilization leads to civic participation. Housing stability means tenants vote at higher rates, and annual rent board hearings give us a clear stake in local politics. It creates the political conditions necessary to expand housing supply and truly solve our housing crisis.
When renters, a solid political majority in New York City, know that they are safe from sudden rent hikes or no-fault eviction, they are more likely to join a coalition in support of more housing production. Study after study, from California to New Jersey, shows that measures to increase housing supply and regulate rents can work hand in hand to address the housing crisis.
Landlords and developers fearmonger because rent control cuts down on their profit. But we know the benefits are clear. For over 100 years, rent stabilization has been the backbone of New York City, ensuring that the cooks, nurses, and bus drivers who keep our city running are able to stay.
