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Re: Please End Rent Regulation

Posted by David Kuhlke on April 14, 1997 at 07:03:51:

In Reply to: Re: Please End Rent Regulation posted by Jose Norub on April 13, 1997 at 12:17:51:

: Do you SERIOUSLY believe that you, personally, will benefit from the ending of all laws regulating rents? If a rental "Wild West" environment prevails, your landlord will surely raise your rent even higher when the next lease
: is offered .. and why shouldn't he with no lawsd in place to curb him? Unless you are in a luxury, full service buildsing, it sounds like you're overpaying even today's "market prices " by a few hundred dollars a month. And it's
: almost certain your landlord is aware of this and will try and stick you with another raise the next time around, since he got you to overpay two years ago. Get real and understand that the rent laws apply only to buildings over
: 25 years old and that by jacking those folk's rent up and forcing them to relocate, ALL rents will be subject to upward pressure. Your posting sounds more like sour grapes ... you didn't wind up with a reasonably priced apartment
: (for whatever reason) and now you don't want anyone else to have one either.

I tend to disagree. Giving landlords the same ammunition the airlines
had before the late 70s is asking for constant increases in rent, as
allowed by regulation.

Were there all of a sudden decontrol or destabilization (read: deregulation)
of rents in Manhattan, surely half the tenants in the city would be affected
in the short term by sharp uplift in rents charged. But a fair market
economy would then be able to perform its magic: the landlords with the
highest rents would have a bunch of empty apartments on their hands,
motivating them to lower their rents.

What we consider "fair market value" in Manhattan is ridiculous by any
standards. What I pay for a one bedroom doorman apartment in the East 40s
would easily pay the mortgage on a five bedroom house with acreage
in other areas. Though I've only lived in the city for three years and
came from the south where a comparable apartment to what I have now might
go for $350 or $400 per month, I understand the cost of living here is
driven mainly by landlords who have taken advantage of a system put in
place to protect their tenants.

If they are allowed to raise their tenants' rents by 6% per annum, they
will do so, whether or not their building or their location warrants such
a rise. If they are forced to charge rents that are supported only by
the amenities, the location, or the size or "view" an apartment offers,
we will truly have a "fair" real estate rental market here, and the rents
will be driven by what the market will bear.

The question then is, Will landlords forced into this new fair market
become bankrupt on such a scale that the city or state might have to
step in to support them? I say 'maybe/maybe not'. The airlines were
thrown into the same predicament, but the ones that survived did so
through bankruptcy, spinoffs, closures, layoffs, and other means
all financially troubled businesses must affect to stay alive.

I believe the thought process behind eliminating rent stabilization
and control (regulation) is sound based on the history that damaging
regulation carries with it. Some people will be forced to leave the
city for a couple of years until things calm down. Some landlords
will be forced to sell, and many apartments will go unrented.

But deregulation does not spell the end of affordable rents in my
opinion. It opens the door for true competition and market-based,
customer-driven pricing to thrive. And I, for one, would gladly
see that happen, no matter the short-term consequences.

David Kuhlke

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