by Richard Brookhiser
Somebody's Paying For Your Low Rent
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.