Housing, housing everywhere -- and all of it's expensive.

Rent Control's Winners and Losers

Jonathan Miller writes about the housing economy and other aspects of real estate. He began a real estate blog, the Matrix, in 2005, and has written a column for Curbed.com. He is co-founder of Miller Samuel, a residential real estate appraisal company, and the commercial valuation firm Miller Cicero.
Read More.
a | A

Any renter in New York City probably has felt the pain of coming up with the monthly payment. There are plenty of reasons for the city's steep rents: limited land and housing stock; a wealthy populace that bids up all prices; and, of course, rent control, which leads landlords to make up on unregulated units what they can't get on those with restrictions.

Adding new land is almost impossible, building more housing can take years and the affluent are probably in New York to stay. So what would happen if rent control and its cousin, rent stabilization, disappeared overnight?

Of course, open market rents would fall and regulated rents would increase across the city. What's surprising is how much rents would rise in Manhattan, an indication of the size of the subsidy those tenants receive.

The rent on the average regulated unit would jump $686 a month, a 53 percent increase, while the average rent on the open market would fall $644, or 24 percent. (The smaller percentage decline for non-rent-regulated property is a reflection of how much higher rents are for open-market units.)

This is all theoretical, to be sure, and if rent regulation vanished, market forces would likely dampen the rental increase on formerly regulated apartments and reduce the discount to open-market tenants.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Jonathan J Miller at jmiller@millersamuel.com

To contact the editors on this story:
James Greiff at jgreiff@bloomberg.net
James Greiff at jgreiff@bloomberg.net