(From “Rent Control Is Bad Economics But Good Politics” on 10 April 2017.)
I used to live nearly five years in a rent-control
apartment in the swanky Upper East Side of New York City from 2011 to 2015. I
paid US$2,500 a month for a one-bed-room rundown 5th floor walk-up on E64 Street
between First Avenue and York Avenue. In 2012 the comparable non-rent control
flats in the area were asking for at least 3,000 a month and my unit seemed to
be an extremely good bargain.
Only later I realised that the sub-letter (my
unofficial landlord named Michael) was paying less than 750 a month as
legally-controlled-rent for that flat to the real owner a large corporation
which owned the whole block of nearly 500 rent control apartments. He was
making more than 1,750 a month for that rent control flat and he had managed
(illegally of course) altogether five rent control flats in the very popular
Upper East Side area.
The full story of my flat eventually came out from Michael one night as he told me in half-drunk. The flat was and still in the name of his old mother who is fully retired and now living in sunny Florida like many other retired New Yorkers do. Instead of returning the flat to the owners she, blatantly against the city laws, is still hanging on to her rent control flat, then letting her own son manage the flat, and sharing the profits from sub-letting her flat at just below market-rent but well above controlled-rent.