Some of the residents of New York’s more than one million rent-stabilized apartments pay less than the legally allowed rent. How many? Nobody knows.

The Rent Guidelines Board’s most recent “income and expense study” found a gap of about 15 percent between legal regulated rents and rents that landlords have actually collected. The study notes further:

[T]he gap between collected and legal rent varies widely. In 2008, Manhattan property owners collected an average rent of $1,404, 9.4% lower than [the] average legal rent of $1,550 for Manhattan.In the other boroughs, the differences were more significant, with collected average rents that were 16.9% lower than legal rents in Queens; 17.8% lower in Brooklyn; and 22.1% lower in the Bronx. At least part of this differential in the boroughs is due to … preferential rents, usually offered when the legal stabilized rent exceeds the market rate for the area

The disparity points up a dirty little secret about New York’s housing market: many regulated tenants are not getting a good deal, particularly in the outer boroughs.

In Manhattan, some rents are lower than the legal rents because developers took advantage of a deal under which the city offered tax breaks for a decade in return for the landlords voluntarily putting their new apartments in to the stabilization system, even in cases where the stabilized rent exceeds the $2,000 ceiling for vacant apartments.

For some of these apartments, the market rate has been lower than the regulated rate for the entire decade — calling into question what, exactly, the city got by offering these targeted tax breaks.

We’d know more about this if the state and city mandated public disclosure of all lease deals, just as buyers and sellers of residential real estate must disclose prices.

More on the topic of disclosure tomorrow. To end rent-wars week, The Torch will offer some suggestions on what the state legislature and city hall should do to help tenants, rather than extend blunt price controls.

You may also like

NY’s pre-Covid tax base drain confirmed in new comptroller’s report

New York was a net loser of income tax filers to other states even in the five years leading up to the pandemic disruption of 2020 Read More

Charter Law Fix is Low-Hanging Fruit for Legislature

A floor amendment to lift the charter cap that limits the number of charters granted to operate such schools in New York City was rejected by the State Senate last week. Read More

Voters Reject a Pair of Tax Cap-Breaching School Budgets

New York school districts whose budgets were defeated yesterday can hold a re-vote in June on the same proposal or a modified one Read More

NY’s pandemic-punctuated school spending topped US average by 89%

In a school year whose last quarter was severely disrupted by the Covid-19 pandemic, New York once again led all states in spending on elementary and secondary education Read More

Renewable Energy, Open Space, and Agriculture – New York Can’t Have it All

New York faces the prospect of growing land use conflicts in coming years, due to the Climate Leadership and Community Protection Act Read More

Can New York City Do Without the Greenpoint Energy Project?

National Grid is trying to expand its natural gas compression facility in Brooklyn, but New York’s Department of Environmental Conservation delayed making a decision to approve it Read More

Stock markets gyrations could make Albany dizzy

Recent stock market trends could punch a hole in New York's overstuffed state budget. Read More

Set Free New York’s Zombie Charters 

Due to a quirk in state law, roughly 10,000 mostly low income and minority kids in New York City are being denied the charter school seats their parents covet for them. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!