Back in the day, before Bill joined Bourke Accounting, he lived in the city of New York. Recently, he spoke about getting his first apartment in Manhattan. While it was only a block from the subway, it wasn’t nice. Bill described it as a dark, ground floor, roach motel of a place in a questionable area. The rent, $2,050 a month, was a lot more than he wanted to pay, but he considered himself lucky for having found it. After avoiding break-ins and muggings for two years, Bill received a notice from his landlord. When he re-signed the lease, his rent would be increased to $2,500. He couldn’t believe that this could be remotely legal. With a chagrined smile, Bill mentioned that the new Starbuck’s being built across the street should have been an indication that the neighborhood was in the midst of change.
What is needed is protection for hardworking tenants. What is needed are restrictions against greedy, evil landlords. Money-motivated gentrification must be stopped! What we need is rent control…right?
Rent control, a regulation designed to help lower-income tenants and the elderly to stay in their homes, seems like a great idea. The landlord is only allowed to raise the rent to a certain amount and, once that amount is reached, there can be no more increases, ever (ApartmentGuide.com). Happy tenants can now live without fear of a surprise rent hike that would send them scrambling to find cheaper homes. In addition, defenders of it suggest that rent control leads to more stable and safer neighborhoods, as the residents have a vested interest in making them so. Without having to move every couple of years, tenants have security, close ties with neighbors and a “greater stake in their community” (PSMag.com), which leads to time and effort being devoted into making a nice place.
Rent control, it’s argued, is also good for landlords. Since tenants will renew their leases year after year, landlords don’t have to worry about numerous vacancies in their buildings. Landlords also save money, about $2,000 per apartment, if they don’t have to constantly prepare apartments for brand new tenants (GoodLifeMgmt.com). Rent control, therefore, is responsible for building nice neighborhoods with nice neighbors, all affordably living in nice housing. There simply cannot be a downside.
Except, of course, there is. One of the first problems with rent control is that the people who could most benefit from it aren’t necessarily the people who receive it. For example, one study showed that 10% of 2,300 controlled apartments in New York City housed tenants with incomes of more than half a million dollars (HomeownershipMatters.realtor). Further example, former NYC mayor Ed Koch paid a mere $450 a month for his controlled apartment (MarketUrbanism.com). The wait for one of these places can last decades and, it seems, you have to know the right, well-placed people.
Another issue is the fact that rising property taxes and flat-lined rents don’t leave a lot of money for apartment maintenance. Since landlords can’t/won’t find the money, repairs don’t happen (MarketUrbanismReport.com). What good is a $450 a month apartment if the roof is caving in? Finally, there are the landlords who decide to leave the rental headache behind by converting their properties to condominiums – leaving lower-income renters behind, as well (MarketUrbanismReport.com).
Everyone should be able to live in safe neighborhoods. However, like healthcare, we haven’t been able to sort out the details. While some geniuses suggest that the answer is to simply build more housing, this wouldn’t solve the underlying issues (and, you know, space is finite). If anyone has a workable plan, we’re ready to hear it.
Bourke Accounting experts can’t get you an apartment, but they will offer you financial suggestions that can help you to afford one. Your home is your sanctuary and Bourke Accounting pros are willing to share their expertise to assist you in sound housing choices within your budget. Until we build affordable palaces in the sky, your Bourke Accounting rep is here for you on the ground.
Written by Sue H.