Rent Control - New York

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What is rent control

It is a system in which the government has developed policies to restrict the landlords of the amount they can charge their clients to pay for accommodation. This system was developed to offer affordable housing to the citizens (Richard Arnott 15).

What are the objectives of rent control

The act was made to benefit the tenants majorly is populated cities. That is by providing affordable housing in populated areas. Initially, apartment owners would charge exaggerated amounts without maintaining their buildings to the required standards. In the New York the rent control act was designed to stop rent hikes in apartments with six or more floors.

Who benefits from rent control

Rent control act mainly benefits the tenants of the apartments. This is because it grants security over their stay in a specific apartment and also controls the rents that they are charged. The act offers security to the tenant to prevent the landlord from chasing the tenant anytime from the apartment or increasing the rent extremely. Though the rent control act favors the existing tenants in an apartment and not the new ones (Lance et al 34). A good example is in San Francisco where rent amounts are unregulated for new tenants through the existing tenants have the right to renew their rent control at a regulated rent increase.

How does rent control negatively affect the market for housing in New York Provide three arguments that represent the negative impact of rent control on the housing market

Research has shown that landlords who have owned apartments between 10 and 20 years can no longer make a good income from their rent-controlled apartments. Therefore the rent they collect cannot cover for the cost of activities such as maintenance and repair. They, therefore, tend to leave several units vacant than operating with tents who are protected under the rent control act (Lance et al 45).

It is estimated that more than 10 units remain vacant quarterly in New York and the vacancy rates keep on increasing yearly, which is according to the New York Times. This is because of the rent control act laws that mainly protect the tenants making it difficult for the landlords to survive (Joseph et al 58). Though with the number of available apartments reducing and becoming difficult for the tenants to find apartments. The prices of market rentals are forced to increase because of the increasing demand for the scarce commodity.

With this act in place, landlords cannot afford the cost of maintenance of their property. Therefore making the apartment to become degraded due to lack of maintenance and therefore with this the value of the nearby apartments tends to suffer too (Richard Arnott 23).

How do the rent-controlled apartments affect the pricing of apartments that are not rent-controlled

Most investors tend to be opportunistic in circumstances such as this. This is because when one realizes that his old apartment is rent-controlled he/she would tend to build a new one that is not rent-controlled (Lance et al 78). Which will charge high rents. Similarly since most old apartments that are rent-controlled may be vacant therefore increasing the demand of houses by the tenant who may have no option than to move to apartments that are no rent-controlled, where the rent level ted to be very high due to the increased demand(Joseph et al 102).

Work cited

Gyourko, Joseph, and Peter Linneman. Equity and efficiency aspects of rent control An empirical study of New York City.Journal of urban Economics26.1 (1989) 54-74.

Freeman, Lance, and Frank Braconi. Gentrification and displacement New York City in the 1990s.Journal of the American Planning Association70.1 (2004) 39-52.

Arnott, Richard. Time for revisionism on rent control.Journal of Economic Perspectives9.1 (1995) 99-120.

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