Somebody's Paying For Your Low Rent

by Richard Brookhiser
Opinion, NY Observer, May 5, 1997


Rent regulation in New York began as an emergency measure in
World War II. The war ended in 1945, but you wouldn't know it
from the polemics that have attended the current fight.

"Remember," said a flier that went up in the elevators of my
building, "they came for the blue-eyed people, but because I
was not blue-eyed I did nothing. Then they came for the brown-
haired people. but because I was not brown-haired I did
nothing. Then they came for the short people, but because I
was not short I did nothing. Then they came for me, and there
was nobody left."

The model for this paragraph is Pastor Martin Niemoeller's
famous description of the Nazis, who came for the Communists,
the socialists and the Jews before they came for him, a
Protestant minister. Even in New York, it would probably seem
excessive to say flat-out that landlords are Nazis. It is not
excessive to do the next best (or worst) thing, which is to
say subliminally that they are Nazis. When State Senate
majority leader Joseph Bruno, the landlords' water-carrier,
complained of death threats and suspicious fires near his
office, I thought he was indulging in self-dramatizing hype,
but now I wonder.

The leaflet ended with a dire thought about our fate after
the landlord/Nazis come for us: "Would you rather live in the
boroughs??" If landlords are Nazis, then the boroughs must be
concentration camps.

As a Manhattanite, I agree. But I recognize that  bridge-and-
tunnel people may not.

Tenants aren't the only New Yorkers who go nuts on the
subject of rent. I once reported on a meeting of a landlords'
group in the Bronx. They were pleasant enough people, but
when the time came for them to recount their woesódeadbeat
tenants, regulatory burdens -- they spoke in accents of
persecution I had never heard. I felt as if I was among
Branch Davidians, waiting for the F.B.I. to come crashing
through the compound wall.

Who will be affected by the end of rent regulation, and how?
The rich. The free marketers' favorite bedtime story of the
evil of rent regulation used to be the celebrity who paid
$1,000 a month for a 10-room apartment on Central Park West.
(Mia Farrow and Alistair Cooke always topped the lists.)
People instinctively dislike that kind of thing, and luxury
decontrol was a universally attractive idea (so long as the
borderline of "luxury" was drawn comfortably above one's
self). The red guard supporters of rent control always
defended their rich fellows, however -- for the same reason
that partisans of Social Security resist means-testing. If
the benefit is not defined as a self-evident right, then the
trapdoor of cost-benefit analysis opens beneath it, and who
knows where the free fall will stop?

Partial luxury decontrol in 1993 rounded up most of the rent-
controlled fat cats (except for those lying about their
income, of which there are probably not a few). So this time
around, this issue is moot.

The poor. The poster boy for the pro-control lobbyists is Mr.
Salt of the Earth, a retired floor sweeper at the doodad
factory who lives with his wife of 72 years in a Hell's
Kitchen walk-up. Pete Hamill knows him personally. But
everyone, even Kommandant Bruno, has agreed that
deregulation, if it comes, will be means-tested from the
other direction, and that the poor shall not suffer. This
means that there will be no relief for landlords who need it
most: those with buildings in poor neighborhoods. The sad
sacks who find themselves inheriting a property in an area
that tipped years ago; the deluded Albanian immigrant who
thought that plunking his money into a building in the Bronx
was the ticket to success in the land of the free -- in other
words, the very landlords at the meeting I attended -- will
remain at the margins. The city will deal with the
consequences. Under the present system, it deals with the
consequences when marginal landlords pull out or burn
themselves out, and the city takes over their buildings. The
city might better end regulation all around, and give the
lower class rent money.

The middle class. The poor don't vote, the rich do, but there
aren't enough of them. The constituency of rent regulations
is the middle class.

But this constituency is only a portion of the middle class -
- that portion that happens to have a rent-controlled
apartment or that got a rent-stabilized one long ago. The
rest of the middle class scrambles for what it can get. (The
argument that rent control lowers rents for all apartments,
even those that are stabilized, is absurd. It would do so
only if potential renters could freely get into controlled
apartments, which they can't -- unless they have the right
bloodlines.) The split in the middle class probably breaks,
to some extent, along age lines. People who have been here
longer are more likely to enjoy better deals. Gen X suffers;
members of the American Association of Retired Persons
benefit.

Would the end of rent regulation bring a building boom? That
is what the free market model predicts, but there are several
caveats. The market is not entirely free: Unions raise labor
costs, and permits and paperwork can delay construction for
five or six years. Meanwhile, there have been no
technological breakthroughs in construction to compensate:
You can't make a high-rise out of plastic, or software. So
the city's housing stock (apart from subsidized construction,
which is increasingly rare) will grow modestly and only at
the high end.

The result of deregulation will be called mobility by those
who enjoy it, turbulence by those who don't. Many an Upper
West Sider may find himself moving within Manhattan, to the
hated boroughs, or even New Jersey.

Sometimes it is appropriate to wink at middle-class benefits
in this city, considering what else the middle class has to
put up with. City property taxes are famously low, but when
crime and education statistics match those of upstate, and
when the city income tax disappears, then there will be time
enough to raise them. The benefits of rent regulation,
however, are enjoyed for no reason other than luck, and they
come out of the pocket, not of the tax collector, but of
property owners.

This is the basic point. When mega-landlord Sol Goldman
passed to the other side, I sifted his will for the clause
leaving the apartment I rented from him to me. I looked
carefully, but I didn't find it. I may take a hit, or I may
not, depending on the kind of arrangements his heirs and
assigns manage to make in Albany. That's one way to look at
it. The other is that I have enjoyed a good deal for many
years.