We should always be willing to look for the silver lining in any situation, no matter how dark and ominous the clouds may appear. In New York City, some people are sensing a possible silver lining to the pandemic, but it’s not one that will likely seem obvious at first glance. The plague has taken its toll on Gotham’s population and a recent survey shows that the population of the Big Apple is down by half a million from the same time last year. One side effect of this exodus is that the number of available apartments and other rental units is nearing all-time highs while the cost of renting has dropped significantly.
Here’s the obscure part of the story you might not know. New York City has rental laws in place, establishing a system of rent control that keeps prices artificially low. But the law was only enacted to provide relief during a period of a “housing emergency.” That emergency was the excuse for passing the rent control laws in the first place and the “emergency” has been ongoing for decades. But if vacancies in rental units exceed five percent when the regularly scheduled official survey of real estate is taken, the laws are supposed to expire. Vacancies are currently above 5%. (NY Post)
Unofficially, the city’s population is down by 500,000, and it won’t soar back up soon. Units are going for an average of 9 percent below the listed amount, and vacancies are still at historic highs.
In theory, this should end the city’s decades-long “housing emergency,” which stands as the legal justification for rent controls. If the vacancy rate is above 5 percent at the time of the next official survey, the rent laws are supposed to expire.
That would indeed be a cause for celebration. Landlords, who are now despairing, are given long-term hope. And it wouldn’t hurt tenants — not when rents are dropping.