Will a Rent Freeze Fix NYC or Make it Worse?
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What is the current housing affordability crisis in NYC and why does it matter?
Earlier this month, I asked a crowd in Manhattan one of New York City's most classic questions. How much do you pay in rent? I wanna see it by a show of hands. How many people here rent? Look at that. That's amazing. That's like most people. Does anybody want to say how much they pay in rent? Anybody pay the least? Anybody wanna brag about their situation? Two bedrooms for twelve hundred You sir And you live in New York City? On the upper east side. Is that Monica from Friends with the Rent Control Department? There is a housing crisis in America, and New York City is no exception. In response, New York City is implementing a rent freeze next month. That means that for about a year, it will be illegal for many landlords in the city to raise the rent on their tenants.
But rent freezes are very controversial. Some economists think a rent freeze is a good tool to address a broken housing market. And others think it's actually harmful. The rent is too damn high. Agree or disagree?
Agree. Uh.
Agree but for who? 'Cause my friend over here had a twelve hundred dollar rent for a two bedroom.
At this live taping of the journal, I sat down with two housing experts who have two different takes on the housing crisis. You can watch a video of our conversation on Spotify. Welcome to the journal, our show about I'm Ryan Knutsen. Coming up on the show, what's wrong with the rental market and how to fix it?
New York City is a complicated housing market. So let's start off with some basics. Rent control has existed in New York in some form or another for nearly a century. At first, rent control kept many landlords from being able to raise rents at all. And then in the 1970s, rent regulations evolved into something called rent stabilization, meaning rents could go up, but only by an amount set by the city's rent guidelines board, or the RGB.
How have rent control and rent stabilization evolved in New York over the past century?
Most apartments in New York used to be rent stabilized, but that number has shrunk over the last few decades. And today, there are about 1 million rent-stabilized units in New York, which is about half of the city's rental supply. At our live event in New York a few weeks ago, I discussed the housing crisis with Emily Eisner and Kenny Burgos. Emily is the executive director and chief economist of the Fiscal Policy Institute, an independent think tank focused on economic policy in New York. And Kenny is the CEO of the New York Apartment Association, which represents landlords, including those that own and manage thousands of rent-stabilized homes. Um, how bad is it? How how would you characterize how bad their the housing situation is in New York City?
Okay, I would characterize it as quite bad, but I kind of do want to just take one step back quickly and say that the median rent in the city is about seventeen to eighteen hundred dollars a month. And I just think that that's usually strikes people as quite low when they hear it. So I just wanted to like level set on that. Thirty years ago it was about a thousand dollars per month and adjusting for inflation, so like Accounting for all other price changes and wage changes, it's gone up by over 50%. Now it's six, yeah, 1700, I guess. Um, so there's been a huge shift in the distribution of rents in the city, um, even after accounting for regular inflation. Um, and it's really squeezing people's incomes and budgets, um, such that now renters ab over 50% of renters are paying.
Over thirty percent of their incomes in their housing costs and something like thirty percent of renters are paying more than fifty m fifty percent of their incomes and housing costs. So we're
so in other words the rent is very expensive for a lot of people. A lot of people are in New York are rent burdened.
Yeah,
rent burdened. How would you describe the situation for landlords, Kenny?
I would say right now we have a scenario where, especially in recent times, we have a high level of distress happening, particularly in the rent stabilized housing stock. And we'll talk more about sort of how we got there and and what's happening. Uh but basically you have a scenario where you have tenants that are unhappy about the current housing scenario and property owners that are unhappy about the current housing scenario.
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Chapters
8 chapters
1
What is the current housing affordability crisis in NYC and why does it matter?
0:05–2:39
2
How have rent control and rent stabilization evolved in New York over the past century?
2:39–5:36
3
What do the experts say about the severity of the rent‑burden for tenants today?
5:36–7:55
4
How does the 2019 Housing Stability and Tenant Protection Act affect landlords?
7:55–11:03
5
What is the economic argument for a city‑wide rent freeze, according to Emily Eisner?
11:03–13:30
6
Why does Kenny Burgos argue that a rent freeze could harm landlords and the market?
13:30–15:23
7
How might a rent freeze impact free‑market rents and vacancy rates in NYC?
15:23–17:58
8
What long‑term solutions do the guests propose to increase housing supply in New York?
17:58–20:19