The “Shabbifying” of NYC Rental Housing

Howard Husock, a senior fellow at the American Enterprise Institute, uses data from the Census Bureau to illustrate how rent control is “shabbifying” New York City’s rental housing. The bureau’s data shows:

• A third of rent-regulated units have “rodents” — almost twice the rate of unregulated apartments.
• The regulated units also have twice as many leaks (23%, vs. 11%) and three times as many heating breakdowns (17%, vs. 5%).
• Three times as many “stabilized units” have mold; twice as many have toilet and elevator breakdowns.

The bureau’s report states that housing quality declined across all housing types, but it is too “early to know if this was a short-term result of pandemic conditions that delayed repairs and maintenance or a more systemic shift in living conditions.”

One doesn’t need to have an MBA to know that the “shabbifying” of New York’s rental housing isn’t a result of the pandemic. Nor is it an isolated example. In every city with rent control, housing quality declines. Economically, rent control makes maintenance more difficult because property owners are not always able to recover their investment. They often have neither the motivation nor the means to keep properties well-maintained.

While limiting landlords’ income, rent control advocates expect properties to be maintained. They evade basic economic truths. They have little understanding of the expenses involved in owning rental property. In addition to maintenance, property owners must also pay for insurance, taxes, and perhaps a mortgage. Rent control advocates don’t care about these facts. They expect landlords to self-sacrificially serve renters.

Most housing advocates view landlords as greedy predators who put profits before people. They don’t understand that, in pursuing profits, landlords are able to better serve tenants in a non-sacrificial manner. When profits are arbitrarily limited, as occurs with rent control, the quality and quantity of rental housing will decline.