As New Yorkers prepare to head to the polls this November, affordability has emerged as a top concern among voters.
A recent survey indicates that six in ten residents are struggling to meet basic financial needs.
Moreover, a staggering 78 percent reported worsening housing costs in recent years, with 42 percent identifying housing as their primary concern.
The mayoral candidates are actively responding to these pressing issues.
Democratic Party nominee Zohran Mamdani has made a bold pledge to freeze rents on all rent-controlled units, which make up half of the city’s apartments.
He also promised to build 200,000 new rent-stabilized apartments over the next decade to address the housing crisis.
In contrast, Mayor Eric Adams, running as an independent, has opposed all rent freezes.
He advocates for his City of Yes program, which aims to create affordable homes in areas that were previously off-limits for development.
Republican nominee Curtis Sliwa suggested that he would only support a rent freeze if data substantiates the necessity, emphasizing that any rent increase should be minimal.
While addressing voters’ affordability concerns is crucial for the candidates, it is equally important for them to consider the underlying data.
Evidence suggests that although price controls like rent freezes may appear beneficial in the short term, they can lead to detrimental long-term consequences.
Research on rent control’s impact in cities such as Cambridge and San Francisco consistently indicates that although current tenants may benefit temporarily, the overall affordability of housing decreases over time.
These studies point to a series of unintended consequences that arise from implementing rent control measures.
Many tenants choose to remain in their units to keep their below-market rents, even when life changes or income increases might otherwise motivate them to move.
This behavior leads to reduced turnover, thereby decreasing the number of available apartments in the market.
With the supply of rental units constrained while demand remains steady, prices for unregulated apartments inevitably rise.
Additionally, landlords of rent-controlled units may lack the financial incentive to maintain or upgrade their properties, resulting in deteriorating building conditions.
For many landlords, the only viable option for profitability becomes converting rental buildings into high-end condominiums, further diminishing the rental housing supply.
The cumulative impact of these factors contributes to a more profound affordability crisis, characterized by fewer available units and higher rents.
New York City’s rent control laws were originally enacted during World War II in the 1940s as part of the Emergency Price Control Act.
By the late 1960s and 1970s, the adverse effects of these laws became evident as many landlords gave up on maintaining their buildings, leading to widespread urban decay and increasing apartment vacancies.
Similar trends have emerged in places like Cambridge and San Francisco, where rent control has resulted in misallocation of housing, shortages, and worsened living conditions for low-income renters.
Research also highlights the benefits of lifting rent control for property values, overall rental turnover, and both the quality and availability of housing.
Following the repeal of rent control in Massachusetts in 1994, the assessed value of affected properties increased significantly, by a margin of 18 to 25 percent.
Interestingly, properties previously untouched by rent control also experienced a value boost, averaging a 12 percent increase.
While rising property values may initially seem detrimental to affordability, they actually signify a healthier, more responsive housing market.
When rent controls are lifted, landlords are more likely to reinvest in properties and boost the overall housing supply.
This growth enables landlords to compete for tenants, alleviating the pressure on renters and ultimately leading to better affordability in the long run.
The recent experience in Argentina further underscores these principles.
In late 2023, President Javier Milei repealed rent-control measures as part of a comprehensive market-liberalization initiative.
This decision resulted in a nearly 200 percent surge in rental listings in Buenos Aires as landlords re-entered the market, increasing available units.
Although initial nominal rent prices rose, real rents (adjusted for inflation) subsequently fell by approximately 40 percent, thereby easing affordability challenges for renters.
The Argentina case mirrors findings in Massachusetts and California, demonstrating that eliminating price ceilings yields benefits not only for formerly regulated landlords but for the entire housing market.
This shift fosters investment, increases supply, and ultimately expands affordable housing access.
New York City’s mayoral candidates must recognize that while rent freezes may garner short-term political favor, their long-term repercussions can be detrimental.
Legislators often overlook the realities reflected in market data: rent control hampers investment, diminishes supply, and undermines overall housing stability.
For true affordability, the focus must shift from rent caps to providing robust incentives for building, investing, and broadening housing access for all New Yorkers.
image source from：city-journal
