Rent for the wealthy

March 23, 1994|By Mona Charen

IN 1979, when I was working in Manhattan, I had to spend $800 a month to rent a two-bedroom apartment on the Upper West Side. The neighborhood was no bargain. It wasn't the South Bronx, but the streets were grimy, the storefronts dilapidated, and the denizens a mixed bag of drunks, working families and the usual city predators.

Eight hundred dollars was more than I could manage at that age. In fact, so was $400. So two other women and I rented the apartment together. We turned the living room into a third bedroom and did our entertaining in the foyer.

Another friend of mine found a one-bedroom in a better neighborhood that she shared with two other women. They alternated weeks on the couch in the living room.

Little did we know, at that innocent age, that investment bankers, film stars and politicians were paying pittances for elegant, spacious apartments in desirable neighborhoods. How? Why, it was thanks to the government.

New York's rent-control laws permit windfalls to the wealthy and ensure a permanent shortage of housing for the poor and the middle class.

In an article by Laurie Cohen, the Wall Street Journal itemizes some of the abuses of New York's rent-control laws.

Alistair Cooke deserves praise and plaudits and probably a Pulitzer if he hasn't already won one -- but does he deserve an eight-room apartment on Fifth Avenue overlooking Central Park for $1,500 a month? The market value of that apartment must be at least five times that figure.

Mia Farrow stretches out in a 10-room flat on fashionable Central Park West. The indulgence of a wealthy actress? No. She inherited the apartment from her mother, Maureen O'Sullivan, and pays just $2,900 a month.

New Yorkers swap apartment stories like inside traders trolling for tips. Everything depends upon being in the right place at the right time. It's who you know, or better, who you are related to, that matters.

According to the Wall Street Journal, Manhattan has 581,241 rental apartments. Of these, 47,000 are rent-controlled, meaning they were built before 1947 and have been continuously occupied by the same tenants (or their descendants) since 1971. These are the "steals" -- the three-bedroom apartments with garden terraces that go for $395 a month, and so on.

Another 355,300 apartments are "rent-stabilized," meaning they were built after 1947. The rents in these apartments can be raised on fixed schedule, in contrast to rent-controlled apartments, where increases in rent are strictly limited.

One effect of this limit on how much landlords can charge for their properties is that service is poor. Another is that developers are loath to sink money into mid-priced housing. (Developers are permitted to build apartments with unregulated rents, but if they do, they forfeit tax abatements.) Why spend all the money and jump through all the bureaucratic hoops necessary to build an apartment if your rents will be held artificially below the market? The only new apartments built in Manhattan in the past 10 years have been luxury apartments.

So what is the consequence of rent control -- a program designed by people like the Clintons, who believe that government should "manage" markets to "help" people? The wealthy get an even greater smorgasbord of apartment choices than they would otherwise get, the middle class gets squeezed out, and the poor get nothing. A citizen's watchdog group in New York calculates that rent subsidies in 1987 wound up benefiting those with incomes above $75,000 to the tune of $345 a month, while those earning between $10,000 and $19,000 averaged only $176 a month. The poor, the citizens' group concluded, benefited least.

One of those who is enjoying his retirement in a rent-stabilized apartment is former New York Mayor David Dinkins. He found his apartment the New York way -- by knowing Mr. Rudin, the landlord. "The Rudins like to cooperate in making rent-stabilized apartments available to former public officials," a former deputy mayor explained to the Journal.

James McDougal couldn't have put it better.

Mona Charen is a syndicated columnist.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.