City tenants get to keep welfare as they know it

New York Post, June 17, 1997

IN THE end, the drama that just concluded in Albany had a predictable finish.

Proponents of rent regulation -- a privately financed form of welfare whose recipients need to meet virtually no income requirements -- shouted louder, threatened harder and lied outright about their plight without cracking a smile.

Politicians may possess any number of questionable qualities. But with 2 million screaming voters at the door, they are rarely fools.

So pols seeking re-election decided to leave most of the stifling morass of rent laws for future generations to cope with. Meanwhile, immigrants, young people and even middle-class New Yorkers who don't hold leases will continue to be unable to afford living in what control freaks have labeled "decent" neighborhoods.

The heck with the people. Long live rent control!

Despite all the histrionics and hoopla, the battle over rent regulation was never really a question of morality vs. greed. Nor did it pit rich against poor, forces of evil against righteousness.

It was all about the politics of hanging onto a good thing.

Rent regulation is a particularly insidious form of welfare. A government program that awards a minority of renters the right to live in cheap apartments, regardless of whether they need them or not.

This largesse is paid for exclusively by landlords, regardless of whether they are rich and greedy -- as pro-regulation fans like to tar them all -- or simply owners of small businesses trying to make an honest buck.

The results have been well-documented: City dwellers remain in cheap apartments long after they've outgrown them, artificially inflating the price of the few available nonregulated places. Meanwhile, overregulation has so discouraged potential landlords from building or renovating available spaces that New York is producing fewer new apartments in a year than it did during the Depression.

Have we learned so little from history?

Thirty years ago, Americans, alarmed by increasing rates of poverty, responded by greatly expanding welfare programs. At the time, it seemed the kind thing to do.

It took three decades of escalating welfare rolls -- watching inner cities crumble, children growing up without ever seeing an adult bring home a paycheck -- before the powers that be realized, however grudgingly, that the cure might be worse than the disease.

But rent controls are even more indefensible than welfare. Rather than helping the needy, they reward those who know how to work the system -- often at the expense of many others whose need may be greater.

Which explains why tenants groups worked so hard on their public-relations pitch.

Just a few months ago, tenants groups liked to point to elderly and disabled renters as potential victims of decontrol. But soon, it became clear that even control-foe Senate Majority Leader Joe Bruno had no intention of evicting Grandma. That put the control groups into a quandary.

Ultimately, the groups determined that calling rent control a "middle-class" subsidy went over well with New Yorkers, and the whole tenor of the debate changed radically. Suddenly, the same people who once argued that rent control benefited the poor were fighting tooth and nail to preserve artificially cheap apartments for people who make $200,000 a year!

Forgotten in the hullabaloo were people like Nellie Smiley. Four years ago, the 64-year-old widow bought a six-unit apartment building next door to her home in Elmhurst, Queens. But with her rents ranging between $300 and $500 a month -- and legal fees from battling tenants who don't even want to pay that -- Smiley loses money every month.

"With today's prices, I'm not able to properly take care of the property," she says.

Yet Smiley is pleased by one bone thrown her way: Now, tenants embroiled in battles with their landlords must deposit the disputed portion of rent in escrow accounts. If the landlord wins, she won't have to wait to get the back-rent.

"Something is better than nothing," Smiley says.

Unfortunately, by preserving the bulk of the rent-regulation system, the nicest parts of the city will remain off-limits to most New Yorkers. And landlords like Smiley will think twice before deciding to buy and fix up apartment buildings.

Some victory.