Friday, June 27, 2014

The ‘Supply’ Part of Why Rents Are So High in New York City

By Nicole Gelinas

In his first big report, new city Comptroller Scott Stringer presents a shocking conclusion: The rent is too damned high.

But why? The basic problem is supply and demand.

And Stringer misses the supply part: New York can’t provide enough housing partly because of its bad housing policies — which he wants to continue.

Since 2000, rents city-wide are up 30 percent, after inflation. Lower-income folks suffer most. In 2000, families earning $20,000 to $40,000 spent a third of income on rent; by 2012, it was 41 percent.
“It is reasonable to expect that if the number of middle- or high-income households in a neighborhood increases, so will average rents and home prices,” Stringer says. Yep; that’s what’s happened in hot areas, from Clinton (rents up 28 percent) to East Harlem (45 percent) and Astoria (34 percent).

It’s the supply side that he gets wrong. First, he says that the regulations that govern rent hikes on 46 percent of city apartments aren’t strong enough, that one of the city’s “most difficult housing challenges in the next decade will be . . . replenishing the pipeline of rent-stabilized housing.”

But regulating rents is one of the worst ways to keep rents down. For one thing, as Stringer’s own data show...

Read the rest here.

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