The Legend of Rent Control

We all know someone who knows someone who has one of the legendary rent-controlled or rent-stabilized apartments. According to the State Division of Housing and Community Renewal, there are 40,000 rent-controlled and 848,000 rent-stabilized apartments in New York City. Famous examples include the apartments featured in Woody Allen movies and the place “Monica” from Friends lived in off of what she made as a chef.

The legendary rent-controlled apartment numbers are shrinking.

A survey of real estate agencies revealed that there are 80 and 90 year olds paying $58 – $102 per month in Little Italy, a woman on the Upper East Side paying $156.20 for two conjoined studios and a man on the Lower East Side paying $60 per month for a walk-up.

But as Robert Caplin of the New York Times points out, they aren’t always the deal they are made out to be. Many of those outside the prime neighborhoods get close to the same rent they would get on the open market. And even those who have them don’t always have much under control but the rent.

Stabilized apartments go up 3% per year, and rent-controlled apartments can only raise rent if the landlord takes the time to go through the long state application process- even then they can only go up if there are no building code violations. For many landlords, neither the application process or making the repairs is financially worth it.

One 65 year old man pays $288 a month for a 218 East 84th Street studio. The other apartments in his building, which recently sold to a developer for $3.3 million, go for $1,850 to $1,975 a month. Because landlords have been unwilling to make the repairs, Mr. Burke has spent $13,500 to repair it himself and $11,000 on legal fees taking his landlords to court over the conditions.

The number of controlled and stabilized apartments will continue to shrink, whether through the passage of time or the invasion of gentrification and development. But even if you are one of those paying $1,975 for a studio, it may be worth it to have a place that isn’t moldy or falling apart.

Photo Credit: caruba

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