NYC Rent $55 per Month

In a city where studio apartments can go for more than $1,500 per month, rent controls distort the market so badly that little new rental construction takes place in the city. Potential landlords fear they will get caught in the rent control madness at some point.

NyPo provides an instructive case:

It’s the best rent deal in New York City: a SoHo one-bedroom that goes for the price of a porterhouse steak.
Thomas Lombardi, whose family moved to Manhattan from Italy in the 1940s, pays $55.01 a month for a one-bedroom at 5 Spring St. — the same unit where he grew up and which he now shares with his much younger wife.
His monthly rent — which amounts to the price of a cup of coffee a day — has not increased a penny in at least two decades, according to state records...

When the landlord, Robert Cohen, bought the five-story, 15-unit brick rowhouse on the corner of Elizabeth Street last year for $3.9 million, Lombardi, who is in his 70s, wasn’t the only rent-controlled tenant that came with the package.
Retired military meteorologist Tom Combs, 87, pays $71.23 a month for the 500-square-foot one-bedroom he has lived in since 1967.
The two pads in one of Manhattan’s most desirable neighborhoods would fetch $2,500 a month each on the open market, real-estate appraisers said...

But it’s unlikely that either apartment will go for market rate anytime soon.
“I hope to die here, but not soon,” said Combs, who is in good health and has no problem navigating the five-floor walk-up.
He says he has been blessed with good genes: His father lived to the ripe old age of 92...

About 1.8 percent of the city’s rental-housing stock is rent-controlled, according to the city’s 2011 housing-vacancy survey. The average price of the city’s 38,374 rent-controlled units is $800 a month.
To qualify for rent control, a tenant or family member must have been inhabiting the unit continuously since before July 1, 1971.

If they file paperwork with the state, landlords can raise the price of rent-controlled units by 7.5 percent a year until it reaches the “maximum base rent,” determined every two years by the state based on real-estate taxes and other building operating expenses.

Another 45.4 percent of the housing stock is rent-stabilized — where the rent can be raised by only 3.75 percent a year. The average rent of those apartments is $1,050 a month.

The average rent for a nonregulated apartment is $1,369 a month.

Bottom line, nearly half of the city's apartments are under some for of rent regulation. Who would want to construct a rental apartment building in a city with such dramatic abuse of landlords? It is not by accident that the lowest rents are in cities like Dallas and Chicago, where the rent regulations are least onerous and the highest rents are in cities like NYC and San Francisco, where rent regulations are most onerous.