Proposals to lift price controls on the many rent-controlled New York
City apartments are controversial. Free-market advocates wish New York
lawmakers would take a look at how easily and effectively Bostonians made
the transition from controls to a free, competitive market.
- Deregulation began in Boston, Cambridge and Brookline in 1995 and was
completed in two years.
- Experts say deregulation has affected the poor less than anticipated,
construction and renovation of rental housing are accelerating and higher
property values are translating into more property tax revenues.
- Although the Massachusetts legislature sought to cushion the transition
by offering short-term extensions to poorer households, remarkably few
applied and even fewer qualified -- only about 3,090, or 7 percent of families
in the 42,500 rent-controlled units.
- Most of the benefits of rent controls -- averaging at least $300 a
month -- were flowing to relatively well-off tenants.
Studies of tenants in Cambridge revealed that households under rent controls
had somewhat lower incomes and somewhat smaller apartments than unregulated
tenants, but actually had slightly more space per person, since those under
controls were less likely to be families with children.
- As a result of deregulation, about 2,500 new housing units, mostly
rental, are under construction or in the pipeline in Boston and Cambridge
-- the largest number of conventionally financed rental housing units since
the beginning of rent control 25 years ago.
- That is four times the number being planned or under construction in
New York City.
- With increases in the market value of apartments in Cambridge, residential
property tax revenues are expected to rise 9 percent annually -- and 3
percent a year in Boston..
- In New York, an increase equivalent to that in Boston would bring the
City an additional $100 million a year in revenues -- and many predict
it will actually be considerably higher.
Source: Henry O. Pollakowski (Massachusetts Institute of Technology),
"Life After Rent Control: A Case Study," New York Times,
June 14, 1997.
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