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

Next Time Get It In Writing: The NY Redistricting Bait-and-Switch

New Yorkers got a thorough lesson on the difference between a constitutional amendment and a law. Read More

How a Medicaid Program To Improve Nursing Home Care Ended Up Paying for Union Benefits

New York State's budget-making process sometimes works like a closed loop, as interest groups on the receiving end of state spending reinvest a portion of their proceeds to lobby Albany for still more money. Read More

Turning NY’s Yellow Buses Green Could Cost $8B+

New York in 2022 imposed the largest unfunded mandate on schools in a generation, requiring them to replace their buses with electric models. New price data indicate the cost is still rising. Read More

The Election Day After Tomorrow

New York’s “cap and invest” program (NYCI), a central part of the state’s efforts to reduce greenhouse gas emissions, appears designed to hold back much of the program’s sticker-shock until January 2027—after the 2026 election. Read More

How Eliminating the Medicaid ‘Gap’ Would Perpetuate Inequity in Hospital Funding

A change in Medicaid reimbursement currently being pushed by New York's hospital industry appears likely to benefit high-end hospitals proportionally more than safety-net institutions, a review of hospitals' financial repor Read More

Union Membership Dropping in NY Too

The decline in union membership observed nationally appears to be occurring in New York as well. Read More

Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough

Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget. Read More

NY private employment was flat at end of 2023

New York's post-pandemic employment recovery stalled in the final quarter of 2023, with the state ending the year still 76,400 private jobs below its February 2020 level. Read More