Letters to the Editor, New York Times, May 20, 1997
Not All Landlords Were Hurt by Rent Control
To the Editor:
The error in your logic ("A Way to Compromise on Rents," editorial, May 13) is the assertion that New York City landlords have been "deprived . . . of a fair return" on their investment by the 50-year-old program of rent regulation.
The largest element of an apartment owner's costs is the price paid, including debt service and the assumed return on investment.
Only those who owned apartment buildings when rent regulation was first imposed can claim to have been injured by it.
Those who bought with knowledge of it should have paid a price informed by the reality of rent regulation.
Yet building owners have continued to pay prices justified only by speculation upon the end of a regulatory program of which they have had 50 years' notice.
It is not the duty of government to bail them out of their folly by ending a program that has seemed wise to generations of legislators and on which so many depend. To do so would grant a windfall to speculators and punish those who have relied upon continuity and stability.
If expectations of deregulation were lowered and apartment buildings sold for lower prices, owners could enjoy a fair return on their investment within the context of the long-established legal and economic reality of rent regulation.
E. BLUM New York, May 13, 1997
To the Editor:
Both your articles and your editorials on rent regulation frequently purport to present a full discussion of the arguments made by each side but fail to mention the impact of the public subsidy inherent in rent regulation.
The real estate taxes paid by landlords are based on the rents they actually collect, so every rent-regulated tenant whose rent is below the market will cost the city lost tax revenues, thereby giving each rent-regulated tenant a public subsidy without any of the limitations built into traditional subsidy programs. According to the study excerpted on May 14 ( "Rent Decontrol Study: From No Impact to 30 Percent Increases"), decontrol affects primarily parts of Manhattan.
The result is that some of the subsidy goes to high-income people who are not qualified under any direct subsidy program. Or it requires some tenants to pay a percentage of their income for housing that is significantly below the standard used in traditional subsidy programs, while any whose needs are dramatically greater are unassisted.
In the face of these realities, your praise for Gov. George E. Pataki's proposal is ironic ("A Way to Compromise on Rents," editorial, May 13). What logical or equitable argument can be made for protecting all tenants over 62 (an age at which, happily, one's life expectancy is measured in decades), regardless of income? Or for making the income limit for luxury decontrol $175,000? Or for continuing the existing rights of succession?
Governor Pataki's proposal is clearly a reaction to the perceived political realities, but it is a feeble move toward the goal your editorial espouses, where "tenants who can afford it pay rents determined by market, not by luck or complex rules. . . ." The law limits welfare benefits to five years.
Why not a five-year transition for rent regulations?
ANNE ADAMS RABBINO New York, May 14, 1997
No Spur to Housing
To the Editor:
Amid all the opinions and rhetoric rent regulation has engendered, one thing, at least, is clear: Deregulation will not spur construction of housing (news article, May 13) because newly constructed housing is already totally free of rent regulations if built without subsidies.
If they're not building new housing now, deregulation will do nothing to change that.
MILTON R. NEWMAN New York, May 14, 1997