Briefing Book:
Rent Regulated Tenants & Landlords: Who Are They?

A Briefing Book


Chapter Two


When examining the merits of the rent regulation system, it is
necessary to discuss available information about the people
affected by the policies: tenants and landlords. Because there is
a substantial shortage of information regarding landlords in New
York City -- and because this document comes from a tenant
perspective -- the tenant portion of this analysis is more


All kinds of New Yorkers live in rent regulated housing:
residents of all the boroughs and people of all races, ethnic
backgrounds, ages, and income levels.

Where Rent Regulated Tenants Live.

Consider the location of rent regulated apartments in New York. A
common misconception about rent regulation is that it only serves
Manhattan. Table 3 illustrates the distribution of occupied
rental apartments throughout the five boroughs.

                             Table 3
                    Rent Regulated Apartments
         as a percentage of Rental Apartments by Borough
                       New York City, 1991

                 Bronx   Brooklyn   Manhattan    Queens      S.I.

Rent            12,379     34,292      52,275    24,672       794
Controlled       3.70%      5.70%       9.20%     6.20%     1.50%

Rent           175,538    259,238     355,769   172,499     8,031
Stabilized      53.00%     43.10%      62.60%    43.20%    16.00%

All            143,722    308,611     160,216   202,096    41,444
Other*          43.30%     51.30%      28.20%    50.60%    82.50%

Total Rental   331,639    602,141     568,260   399,268    50,269
Apartments     100.00%    100.00%     100.00%   100.00%   100.00%

Source: NYC HVS 1991, Series IA, Table 14

* The unit of analysis "All Other" includes public, Mitchell
Lama, in rem, HUD federally subsidized, Loft Board regulated
and unregulated housing.

Fifty-six percent of all rental housing in New York City is rent
regulated. As indicated by Table 3, Brooklyn, the Bronx, and
Queens roughly mirror this citywide trend with about half of
their units falling under regulation. Manhattan has almost 20
percent more rent regulated housing than the citywide average,
and Staten Island has more than 30 percent less. While there is a
greater concentration of regulated apartments in Manhattan, it is
important to note the significant portion of rent regulated
apartments in the other boroughs.

Race and Ethnicity of Rent Regulated Tenants.

A commonly held myth about rent regulation is that it only serves
the white residents of New York City. In actuality, rent
regulation serves tenants whose race and ethnicity roughly
mirrors that of New Yorkers as a whole [Table 4].

                             Table 4
          Race and Ethnicity of Rent Regulated Tenants
    Compared with Race And Ethnicity of NYC Renter Population

                           Percentage          Percentage
                         Rent Regulated          Renter
Race/Ethnicity             Population          Population

White, Non Hispanic           49.20%              43.20%
Non Hispanic                  18.40%              24.90%
Puerto Rican                  11.00%              12.90%
Other Spanish/Hispanic        14.40%              12.20%
Asian or Pacific Islander      5.40%               5.30%
American Indian, Aleut,
or Eskimo                      0.20%               0.20%
Other                          1.40%               1.40%

Source: 1991 NYC HVS Tabulation Package, Table 4
Note: Categories used are those of the Census Bureau.

Half of all rent regulated tenants are people of color and/or
Spanish-speaking New Yorkers, and the rest are white. This
demographic breakdown indicates that rent regulation is serving
the whole city, not just one ethnic group.

Whites make up a high percentage (75.4) of tenants in rent
controlled apartments. This fact is largely due to the phasing
out of rent control by vacancy decontrol. For a unit to be rent
controlled, it must have been occupied by the same or a
succeeding tenant since 1971. According to Census figures for New
York City in 1970, 64.6 percent of the tenant population was
white.(1) The race/ethnicity of rent controlled tenants today
reflects this larger representation of whites in the population
as a whole when decontrol was enacted.

Age of Rent Regulated Tenants.

Another factor to consider when painting a picture of rent
regulated tenants is age. The median age of renters in New York
City varies greatly by control status.
While the median age of all renter householders in New York City
is 42 years and the median age of stabilized renters is a
comparable 41 years, the median age of rent controlled
householders is much higher, at 70 years. Some 61 percent of all
householders in rent controlled apartments are 65 or older, while
only 14.7 percent of all stabilized householders are in that age
bracket. Thus, rent control serves an aging population that
greatly benefits from the protection it provides. Rent stabilized
tenants are younger on average and more closely approximate the
median age of the renter population in general.

The presence of children in rent regulated households is also
worth noting. Of the 971,076 stabilized apartments in New York,
30.3 percent house children under 18, compared to only 8 percent
of the 124,411 rent controlled households. Children are more
likely to be found in other, unregulated types of housing than in
regulated housing. Of the city's 598,652 unregulated dwellings,
240,649 (40.7 percent) house children under 18.

                             Table 5
               Household Incomes by Rental Status
                       New York City, 1990

Income                   Controlled     Stabilized      Other*

Less than $9,999           39.40%         26.60%        24.60%
$10,000-19,999             23.30%         19.80%        17.90%
$20,000-29,999             13.40%         16.70%        17.20%
$30,000-39,999              6.40%         12.80%        12.90%
$40,000-49,999              7.80%          7.90%        10.60%
$50,000-59,999              4.40%          5.00%         6.00%
$60,000-69,999              2.00%          3.20%         3.60%
$70,000-79,999              1.20%          2.30%         2.70%
$80,000-89,999              1.60%          1.50%         1.60%
$90,000-99,999              1.00%          0.90%         1.00%
$100,000 and more           0.40%          3.30%         2.00%

Source: NYC HVS Series IA, Table 9

* The unit of analysis "Other" refers to in-rem, HUD federally
subsidized, Article 4, Loft Board regulated and unregulated

Incomes of Rent Regulated Tenants.

Households of all income levels occupy rent regulated housing
[Table 5]. As indicated by the data, 62.7 percent of rent
controlled households and 46.4 percent of rent stabilized
households earn less than $20,000 per year. Note that the
relationship is progressive: i.e., the lowest-income categories
show the greatest percentages of tenants served by regulation.
Despite studies purporting to demonstrate otherwise, low-income
tenants are the major beneficiaries of rent regulation.

Another way to measure income levels of regulated tenants is to
compare median incomes of tenants in different types of housing
[Table 6]. The data show that rent controlled tenants have
significantly lower incomes than other tenants-with the exception
of tenants in public housing. Rent stabilized tenants have a
median income slightly higher than that of the total rental
universe but lower than that of tenants in other housing.

                             Table 6
      Median Incomes of Renter Household by Control Status
                      New York City, 1990*

Public                              Mitchell             Total
Housing    Controlled  Stabilized     Lama    Other**    Rental

$8,088      $12,075     $21,000     $23,000   $24,000   $20,000

Source: 1991 NYC HVS

* Data were collected at the time of HVS enumeration in 1991;
income data reflect earnings for previous year, 1990.

** The unit of analysis "Other" refers to in-rem, HUD federally
subsidized, Article 4, Loft Board regulated, and unregulated

According to a recent report by the Community Service Society,
poverty is on the rise in New York. "The poor population of New
York City increased from 1.4 million in 1979 to 1.8 million in
1990."(2) In addition: "From 1979 to 1990 the poverty rate...
grew from 20.0 percent to 25.2 percent."(3) Given this increase,
it makes sense to examine the extent to which rent regulations
are serving the poorest households [Table 7]. The indicators of
poverty used are receipt of public assistance and the federal
poverty level.

Two findings are illustrated by the data. First, an increased
number of tenants -- including households in all control statuses
of housing -- have fallen into poverty since 1987. Second,
significant numbers of households receiving public assistance and
households below the poverty level are protected by rent
regulations. Almost 25 percent of rent stabilized households have
incomes below the federal poverty level. The number of rent
controlled households similarly affected is slightly lower (23

                             Table 7
          Renter Households Receiving Public Assistance
              and with Incomes Below Poverty Level
                       New York City, 1991

                  Households Receiving    Households with Incomes
Control Status     Public Assistance        Below Poverty Level

                      1987       1991           1987       1991

Rent Controlled       5.0%       9.3%          24.1%      23.4%
                     7,055     10,395         27,311     20,684

Rent Stabilized      12.9%      18.2%          21.5%      24.3%
                   104,438    157,818        142,419    177,339

Mitchell Lama         6.8%      13.6%          21.0%      17.7%
                     3,094      9,701          7,951      9,973

Public Housing       27.7%      47.0%          45.7%      55.7%
                    42,346     77,772         58,972     77,335

Other*               12.8%      12.3%          23.1%      17.3%
                    34,333     56,573         48,525     65,184

Total Rental         13.2%      18.6%          24.0%      25.2%
                   218,739    312,254        321,759    350,515

Source: 1991 NYC HVS

Note: This table was produced using computerized data.

* The unit of analysis "Other" refers to in rem, HUD federally
subsidized, Article 4, Loft Board regulated and unregulated


Exactly who New York City's landlords are remains unclear due to
a lack of available data. Given this information gap, no
breakdown of demographics -- and certainly no profile of landlord
incomes -- can be made. The information that is available, though
piecemeal, raises two important considerations.

Concentration of Ownership.

First, both the 1987 HVS and a study financed by the real estate
lobby found a significant concentration of ownership of New York
City rental properties. According to a study conducted in 1985
for the Rent Stabilization Association, 71 percent of New York
City's rental apartments were owned by only 12 percent of
landlords. These landlords owned an average of 238 apartments
each. The remaining 88 percent of landlords owned the remaining
29 percent of the rental stock, each operating significantly
smaller holdings.(4) Although this study is seven years old, it
is unlikely that the real estate industry has become less
concentrated given recent economic trends.

There are two ways to view these data. On the one hand, it is
fair to say that most owners of rental property are small
landlords. It is also fair to say, however, that the vast
majority of tenants in New York City live in apartments owned by
large landlords. While there are hundreds of "Mom and Pop"
owners, a small number of owners own a large number of the city's
apartments and yield large profits.

For example, the largest owner of rent regulated apartments in
New York is Samuel Lefrak. According to an April 29, 1990
interview in the Daily News Magazine, Mr. Lefrak owns "some
94,000 units at an average [rent] of $850 a month." Thus, in 1990
his gross monthly rental income was in the neighborhood of $80
million. Moreover, if his property portfolio is multiplied by the
median renter household size for 1991 (two people), it becomes
clear that Mr. Lefrak is landlord to about 188,000 people -- or
3.9 percent of the renter population in New York City.

Clearly, Mr. Lefrak operates his real estate business differently
than a smaller owner might, which leads to the next

Financial Objectives.

The financial objectives of landlords vary greatly. Some seek
long-term tenants and desire stable, long-term, relatively low
profits. Others may seek high levels of cash income over the
short term and encourage rapid turnover in their apartments to
gain rent increases through vacancy allowances. Regarding
ownership objectives, Kenneth Baar makes the following

     "Some research has indicated that there is a 'dual
     economy' in the rental housing business. One part
     of this economy is operated by local owner
     occupants or neighborhood residents. These owners
     borrow as little as possible, perform their own
     maintenance, derive substantial satisfaction from
     the interpersonal gratification associated with
     providing reasonably priced housing, and tend to be
     satisfied with relatively low rates of return. Such
     ownership patterns are most widespread in areas
     where buildings are small and property values are
     stable. The other part of the dual economy consists
     of 'professional' investors or 'profit maximizers.'
     These investors tend to make rent setting and
     maintenance decisions on the basis of short term
     housing strategies. They are most active in markets
     where property values are undergoing rapid

These varying financial objectives greatly affect the quality of
the housing that different landlords provide to tenants.

Notes to Chapter 2

1.   Sternlieb, George with James W. Hughes, 1973, Housing and
     People in New York City, New York City: Housing and
     Development Administration, Department of Rent and Housing
     Maintenance, pg. 171.

2.   Rosenberg, Terry J., Ph.D., 1992, Poverty in New York City,
     1991: A Research Bulletin, New York, Community Service
     Society, pg. x.

3.   Ibid, pg. xi.

4.   Arthur D. Little, Inc., 1985, The Owners of New York's
     Rental Housing: A Profile, Reference 53219. Report to Rent
     Stabilization Association of New York, Inc. From the
     original release of this report, not the second. revised
     version. In response to a critique of the report by the New
     York State Tenant and Neighborhood Coalition, Arthur D.
     Little revised a table in such a way as to make it
     impossible to extract information about ownership
     concentration and reissued the report.

5.   Baar, Kenneth K., "Guidelines for Drafting Rent Control
     Laws: Lessons of a Decade," Rutgers Law Review, Vol. 35. No.
     4, Summer 1983, pg. 734.