Rent Control's
Memory Lane

Editorial
Daily News, June 15, 1997
The headlines said "Reds drive Nazis back to Dnieper Dam" and "Freeze rents in New York as of March 1." The former referred to the Soviet recapture of territory from Hitler's legions; the latter heralded the start of rent control in New York. The time was September 1943.

Nearly 54 years later, there are no Reds and no Nazis, and the Dnieper flows through an independent and democratic Ukraine. Rent control, shamefully, still rules New York's roosts.

Regardless of what happens in Albany, portions of rent control and its political offspring, rent stabilization, will live on in some form. But as Gov. Pataki, who hopes to reform this absurd system, battles with Assembly Speaker Sheldon Silver, who hopes to cement it in place forever, history holds the best arguments about why rent regulations should go the way of those armies that were ravaging Europe half a century ago.

Rent control was born amid the wartime shortages that plagued daily life on the home front. The aim, understandably, was to reserve the nation's raw materials and energy for the war effort. Restrictions and rations on everything from gasoline to wool to iron and steel were the order of the day.

One unfortunate side effect was price gouging. To prevent it during this national emergency, the federal Office of Price Administration dictated how much many things should cost, right down to canned fruits and vegetables. Some goods were astoundingly cheap, like fleece-lined men's coats, advertised for $13.77; corduroy hats went for $1.19, and gaberdine raincoats were on sale for $4.93.

Housing was different. The shortages quickly resulted in skyrocketing rents, a double hardship because many families had their breadwinners in the military. Starting in 1942, the OPA enacted rent freezes in hundreds of cities, but not New York.

Rent controls came to the New York area the next year, when increases sought by landlords caused an outcry. The order was issued Sept. 28, 1943, that rents for all "houses, tenements, apartments, hotels and rooming houses" would be frozen at the March 1 levels, effective Nov. 1.

On the day the controls started, Mayor Fiorello LaGuardia said on his radio broadcast, with no small amount of sarcasm: "The OPA assures me that rent control will be administered intelligently, fairly and justly, with no politics. With that assurance, New York City will cooperate. But there must be no politics."

No politics. If only the Little Flower could see Albany today.

To help the feds, the mayor had 300 building inspectors, 500 Department of Welfare investigators and 2,500 volunteers join the effort to set up the controls. Five decades later, Mayor Giuliani, who sees LaGuardia as his hero, is likewise mobilizing the officialdom to sustain rent regulations. Without sarcasm.

Right away, the landlords were in court, seeking rent increases. Some of the terms have survived unchanged, even if the dollar amounts have changed dramatically. There actually was talk of luxury decontrol for units with rents above $100 a month. The concept was sound then, and remains so. As is its cousin, vacancy decontrol, which would allow a reasonable transition to a free market while protecting tenants in place.

In 1946, with the war over, OPA was looking to get out of the rent control business. It allowed several large residential hotels to seek increases of as much as 125%. The tenants screamed, and the local pols jumped into action.

That was a preview of what might happen when all the national regulations were to expire on June 30, 1947. As that date approached, the city passed its own rent laws. It's noteworthy that the current generation of pols wants to do the same thing this time to cut Albany out of the game.

Harry Truman extended the federal caps for eight months until Feb. 29, 1948. All limits on the hotels were allowed to lapse, though the city responded by freezing hotel rents. All other renters were given the choice between an 18-month lease with a 15% increase or taking their chances with state laws.

The response of local pols seems strikingly familiar. The mayor organized a "preparedness conference." The Manhattan Democratic organization, still called Tammany Hall, offered free legal advice for tenants.

The next February, as OPA's end approached, Albany okayed the city's law basically keeping the wartime regulations. The GOP Senate vote was unanimous, the GOP Assembly passed it 145 to 1. Thomas Dewey, the GOP governor, signed it. See, Republicans have only themselves to blame!

The law set controls on all existing buildings. As time passed, tenant complaints led to more laws covering more buildings. The result is what you see today: a welter of regulations covering 1.1 million apartments in the city.

As Albany reconvenes for tonight's deadline, it has a chance to make history and to begin to undo the damage to the city's housing market that 50 years of harsh restrictions have created. If the lawmakers are wise and courageous, 50 years from now, New Yorkers surely will look back with gratitude.