Note that the vacancy rate is attributed to "rent-stabilized" apartments. Something else is going on here that is peculiar to that particular form of rent control.
For one thing, rent-stabilization may mean that if a landlord lowers the rent to fill a vacancy, he will not be able to raise the rate again. This creates a very powerful incentive to not lower the rates. Another pernicious effect of government price controls.
This is inaccurate. If a landlord lowers the rent of a rent stabilized apartment, they are able to raise it again at the next renewal to whatever the authorized rent is.
I lived in an NYC rent stabilized apartment for a number of years, and my rent was always articulated as legal rent is X, offered rent is Y.
It seems that before now you’d be stuck with and X% increase, but when the tenant moved you could bring the rate back to “normal” - something apparently changed and you can’t do that (maybe?).
It’s interesting how rent controls work perfectly but property tax controls (prop 13) is widely known to be the cause of all ills.
It could not be simpler - they lost a lot of loopholes right before the pandemic and they are hoping the courts change things. It’s not a real free market problem.
This is actually not correct any more. 2019's housing stability and tenant protection act changed it so that the preferential rent must continue as long as the tenant keeps the apartment, subject to the same percentage increases as the legal rent.
Yeah, this is all well-established. When you buy an apartment building you know the legal rent for every apartment. That only changes by a percentage amount every year, and the amounts are available historically, and landlord reps make up a big chunk of the board that sets those percentages.
There’s no mystery here, everyone knows the score, it’s just that landlords try to take advantage.
Doesn’t everyone try to take advantage? I’ve never heard of renters offering to pay more than rent, it’d be like haggling with a street vendor to pay a higher price.
Sure, but there used to be big loopholes, so, for example, if you made capital improvements to an apartment you could increase the rent further. Landlord buys a $500 fridge and hires his buddy to install it and gets from him a receipt for 8k in installation fees. Now he can raise the rent $800/mo. the same sort of shenanigans aren’t available the opposite direction for the tenants.
For one thing, rent-stabilization may mean that if a landlord lowers the rent to fill a vacancy, he will not be able to raise the rate again. This creates a very powerful incentive to not lower the rates. Another pernicious effect of government price controls.