Rent Control Subsidizes Rich Manhattanites

Worth A Look, Housing Affordability, Frontier Centre

New York City’s rent stabilization, or rent control, provides little benefit to residents of the outer boroughs and lower and middle-income neighborhoods in Manhattan, according to a new report by the Manhattan Institute. The only areas whose residents receive a substantial subsidy live in the relatively affluent areas of Lower and Mid-Manhattan.

  • The median monthly subsidy provided by rent stabilization for all of New York City is $42.
  • In the higher-income areas of Lower and Mid-Manhattan, the median monthly subsidy from rent stabilization is $397.
  • By contrast, the median subsidy in the Bronx is $58, in Upper Manhattan (including Chinatown and the Lower East Side) it is $9, and in Brooklyn it is $5, while in Queens and Staten Island the median subsidy is effectively zero.
  • The report also finds that deregulating rental prices would not lead to significantly higher rents for most apartment dwellers.

  • Rent increases for residents of neighborhoods outside of the affluent part of Manhattan would be minimal to non-existent because their rents are not significantly below market prices now.
  • In an unregulated housing market, the supply would expand in the affluent areas of Lower and Mid-Manhattan, creating downward pressure on rental rates.
  • If rental prices were completely deregulated, the median monthly rent of subsidized housing would increase by only $8 due to the expansion of the unregulated market. If rental rates were deregulated only when vacancies occur, the median monthly rent increase during the first two years would be $35.

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