(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.
Not just her but also her sisters and brothers and
cousins (a couple of them had already been deceased for a very long time) are
doing the same black market things well-managed for them by Michael. The
profits from their rent control flats have been paying their Florida mortgages
and their living expenses in much cheaper Florida.
It was not an unknown story as the whole bloody New
York knew the rent control scam. And the real owners of those rent control
flats knew it too. But the Democrat city politicians and their system knowingly
encouraged the scam by making almost totally impossible for the landlords to
evict the scammers through the NYC Housing Court stacked with so-called
progressive judges appointed by Democrat city politicians.
In some extreme cases the landlords managed to get their flats back through the Housing Court. But as soon as they got back they warehoused the flats instead of letting the flats again at very low controlled-rents. In our 100-year-old block of about 30 units nearly ten are empty and slowly decaying as the landlord’s intention was to slowly get rid of the remaining tenants and eventually demolish the block and redevelop the land.
That warehousing of large number of rundown
apartments by their owners gave the locality an image of decay and destitution.
The zip code 10065 of Upper East Side is famous for its multi-million-dollar
brownstones (townhouses) between the Central Park and Third Avenue. But the
large area between Third Avenue and East River is basically a slum because of
those blocks of rent control flats and everyone knows it.
