Affluent Areas of Manhattan Receive Vast Majority of Rent Subsidizations
March 14, 2003
New York City's rent stabilization, or rent control, provides little benefit to residents of the outer boroughs and lower and middle-income neighborhoods in Manhattan, according to a new report by the Manhattan Institute. The only areas whose residents receive a substantial subsidy live in the relatively affluent areas of Lower and Mid-Manhattan.
- The median monthly subsidy provided by rent stabilization for all of New York City is $42.
- In the higher-income areas of Lower and Mid-Manhattan, the median monthly subsidy from rent stabilization is $397.
- By contrast, the median subsidy in the Bronx is $58, in Upper Manhattan (including Chinatown and the Lower East Side) it is $9, and in Brooklyn it is $5, while in Queens and Staten Island the median subsidy is effectively zero.
The report also finds that deregulating rental prices would not lead to significantly higher rents for most apartment dwellers.
- Rent increases for residents of neighborhoods outside of the affluent part of Manhattan would be minimal to non-existent because their rents are not significantly below market prices now.
- In an unregulated housing market, the supply would expand in the affluent areas of Lower and Mid-Manhattan, creating downward pressure on rental rates.
If rental prices were completely deregulated, the median monthly rent of subsidized housing would increase by only $8 due to the expansion of the unregulated market. If rental rates were deregulated only when vacancies occur, the median monthly rent increase during the first two years would be $35.
Source: Henry O. Pollakowski, "Who Really Benefits From New York City's Rent Regulation System?" Civic Report No. 34, March 2003, Manhattan Institute.
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