Rent Regulation in New York State takes the form of rent control and rent stabil
ID: 1134055 • Letter: R
Question
Rent Regulation in New York State takes the form of rent control and rent stabilization programs.
[1] Each city in the state may choose whether to participate or not, and as of 2007, 51 municipalities participated in the program, including Albany, Buffalo, and New York City, where over one million apartments are rent-regulated. In 1920, New York adopted Emergency Rent Laws, which effectively charged the courts of New York State with their administration. When challenged by tenants, rent increases were reviewed by a standard of "reasonableness." The definition of reasonableness was subject to judicial interpretation. Certain apartments were decontrolled beginning in 1926, and the Rent Laws of 1920 expired completely in June 1929, though limited protections against unjust evictions were continued. New York's current rent control program, which began in 1943, is the longest-running in the United States. From 1943 to 1950, rent control was administered by the federal government but has been administered by state government since 1950, although state and city agencies shared administrative work from 1962 to 1984. Rent regulation affects rent increases and prescribes rights and obligations for tenants and landlords. Rent control exists in New York City and a small list of other municipalities in Nassau, Westchester, Albany, Rensselear, Schenectady, and Erie Counties. In New York City, rent stabilization applies to all apartments except for certain classes of housing accommodations for so long as they uphold the status that gives them the exemption.
Please view the following video: https://www.youtube.com/watch?v=R0h8kfA4i_A before proceeding to the bold questions below. Is rent control a price ceiling or price floor and do the side What are some of the pros/cons of rent control highlighted in the video? What were some of the side effects of imposing rent control (for consumers and suppliers) ? Does this match the side effects outlined in the readings? Explain. The following article was published recently in the LA Times: http://www.latimes.com/local/lanow/la-me-ln-garcetti-costa-hawkins-20180422-story.html . Summarize it briefly and provide your opinion on the issue.
Explanation / Answer
Is rent control a price ceiling or price floor and do the side What are some of the pros/cons of rent control highlighted in the video? What were some of the side effects of imposing rent control (for consumers and suppliers) ? Does this match the side effects outlined in the readings?
Answer: Rent control is clearly a Price Ceiling in which rets are capped at a particular level and charging higher rent is against law. This helps tenents as they have to pay less but for owners this is a discouraging step. Owners do not get market prices and they lose interest in developing ew properties or to maintain the existing ones. Hence supply of houses decreases and is not able to match with the increased demand.
Pros of Rent control: This caps the rents and makes tenentas assured about their income and hence they can spend more on other things like education, health.
Rent control also makes market uniformity in rent in a particular locality and decresaes fancies of owners.
This will also increase demand and help renting out vacant flats/apartments.
Cons:Supply decreases and this creates market failure.
Owners do not spend on maintainence and they also do not develop new apartments as they know that rents are fixed.
This may lead to black marketing or law violation by some of the house owners and also by the tenents.
All these points are similar in video and article. Video has made an additional point that only wealthy has benefitted from the rent control acts. Poor people for whom this initiative was taken are not served due to demand-supply mismatch.
Explaination of recent article about introducing new rent control act in Los Angeles:
This article is also in line with what earlier article and video proposed. Mayor Eric Garcetti is agreeing to popular demand of people asking fir rent control. However, experts have reminded about earlier failure of thes kind of laws. In Los Angeles houses built after 1995 can not be rent controlled but built before can be controlled and hence this has become lottery. If people find a place in oldhouses it is like a lottery but owners suffer.
Similarly due to higher rents in new houses many hosuse are empty and on the other side people cannot find accomodation. Hence this problem is worsening.
Rent control however, is not a solution. Govt. can subsidize the poor with economic help but rent control acts create more problems.