According to an article from The New York Times, this legislation would directly affect approximately one million rent-regulated apartments in New York City. These rent-controlled apartments represent more than 40 percent of the city’s overall rental stock. Under this rent control package, municipalities across the state of New York will also have the power to design their own rent control policies, however, the Housing Stability and Tenant Protection Act of 2019 also limits landlords’ ability to raise rents and gives tenants other protections.
Governor Andrew Cuomo declared the new rule to be “the most sweeping, aggressive protections in state history.”
Some of the provisions include caps on rent increases, strong protections against evictions, and removing landlords’ ability to deregulate certain housing units. But what is particularly noteworthy about this law is the restrictions on a landowner’s ability to raise a tenant’s rent.
Under New York’s current rent stabilization laws, landlords can raise the rent by an additional 6 percent to make property renovations that benefit tenants in some shape or form. But a New York Times report reveals that these kinds of rent increases are out of the picture under the new rent control law. Specifically, landlords can now only raise by 2 percent. In the long run, this rule will disincentivize property owners to renovate their housing units, therefore reducing the overall quality of housing.
By the same token, when vacancies emerge, landlords could have raised the rent for said unit by as much as 20 percent under the previous law. Thanks to changes, many landlords will reduce the overall housing stock as they get out of the housing business altogether. Some will not even bother to make upgrades because it’s no longer economical to invest in these units. Those with a strong business acumen will likely pivot towards converting their current units into luxury housing or office space so that they can actually make ends meet.
At the end of the day, individuals looking for affordable, quality housing end up losing out under rent control. New York passing this ordinance is par for the course when we look at New York’s overall policy track record. The state has implemented the whole gamut of anti-growth legislation from high taxation to reckless spending. Bringing rent control into the mix, will only cement New York’s status as one of the least economically free states in the country. And the numbers back it up, with New York ranking 46th place in land-use regulations according to Cato’s Freedom in the 50 States index.
Instead, New York should look at the example of cities like Houston, who have broken the mold by embracing less central planning in its housing sector. Free-markets, not bureaucratic mandates nor well intentioned laws will fix New York’s current housing problems.