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NEWS & LETTERS, December 2009
NYC housing crisis
New York--During World War II, the Federal government put a freeze on wages, prices and rents. After the war there was a severe housing shortage as millions of GIs came home, and several states such as New York responded with rent controls. Since then real estate interests have bought off local governments to eliminate or weaken these controls. Because of the very low vacancy rate and the number of rent regulated apartments, New York City has retained much of its rent regulated housing stock. By 2003, only about 3% of New York City's rental stock was vacant. Affordable housing for the working class exists mostly in rent regulated or subsidized private housing or in public housing. According to the NYC Housing and Vacancy Survey, by 2002 NYC had over 3,208,000 housing units and 1,265,000 were unregulated.
By 1970 most of the rent regulated private housing was under a rent control law when Governor Rockefeller had the Legislature pass total vacancy decontrol. Landlords began to harass rent controlled tenants out of their apartments and then charge rents beyond the reach of much of the working class. This caused such public opposition that deregulation was repealed and those apartments already deregulated were put under a new system called "Rent Stabilization." Most apartments in NYC were under the old Rent Control Law but as those apartments were vacated, they were moved to Rent Stabilization.
In the ensuing 39 years, "Rent Controlled" apartments shrunk from over 1,000,000 units to about 40,000 while "Rent Stabilized" units rose to around 1,000,000. The remaining 40,000 rent controlled units have tenants who are mostly elderly. Both groups of regulated tenants have their rent increased differently; the rent stabilized by a NYC "Rent Guidelines Board" (RGB) and the rent controlled by the NY State Division of Housing and Community Renewal (DHCR). The RGB is controlled by the Mayor of NYC and the DHCR by the Governor who are, in turn, greatly influenced by the real estate industry. Both groups of tenants have been subjected to rent increases far exceeding inflation or increased income. Rent Stabilized rents have gone up 374% and Rent Controlled by 631% in the past 38 years. In recent years, the real estate industry-controlled city and state governments have reintroduced vacancy decontrol. Hundreds of thousands of regulated apartments have been lost. The unavailability of affordable working class housing has reached crisis proportions.
Despite increases in landlord costs, their rate of profit has remained incredibly high. By 2001, landlords were realizing a 44% profit on regulated buildings excluding debt service, while one-fourth of all renters were paying more than 50% of their incomes in rent. Although seniors and the disabled are eligible for a rent freeze, their incomes have to be very low and their rents have to exceed one-third of their incomes. Rent controlled tenants have the lowest average income of all renters yet have been subjected to the highest increases.
The DHCR has just promulgated a rent increase of 12.9% over the next two years despite the economic crisis! Because rent controlled tenants are relatively few, they do not have the influence of other tenant groups. The prospect of many lower middle class seniors, who are not eligible for a rent freeze, having to uproot their lives and move out of their apartments, is very real. State and local government, under the control of the corporatist Democratic and Republican parties, will put the burden of the economic crisis on the backs of the working class. As everything else in capitalism, profit takes precedence over people's needs, whether in health care, social services or housing.
--Tom Siracuse, Chair of the Committee To Protect Rent Controlled Tenants
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