On June 15th, New York State’s rent regulation law, more commonly known as rent stabilization, is set to expire unless a deal can be worked out to extend it. As a general rule, landlords oppose rent stabilization, but want development tax breaks knows as 421a tax abatements. Renters, for the most part, want to keep rent stabilization, but oppose the 421a tax abatements as give-aways to the rich and powerful landlords.
Economist standing on the sidelines generally agree that rent stabilization inhibits the growth of New York City, since it prevents the market for turning over apartments. After all, people who have been in their apartments a long time don’t want to give up their below market rate apartments – even if they spend the winter in Florida, thanks to their cheap rents.
Would it be asking too much to continue the present process of de-stabilizing to free market rents as the rents hit a certain price? But come on, $2,000 as the threshold for de-stabilization may have made sense back in 1993, but that figure ought to at least keep pace with inflation. How about $3,000 as a threshold for de-stabilization?
What it comes down to is that few apartments outside of Manhattan get de-stabilized, and fewer and fewer apartments in Manhattan remain stabilized. Do Manhattan developers really need the 421a tax abatements to make money on their projects? If they are getting a public subsidy, shouldn’t the developers be forced to give something back to the city as well?
Tough questions. But in Albany, it’s all about deal making anyhow. The tenants can outvote landlords, but landlords can give large, powerful contributions to the politicians. So who do they favor. More to come on this story…