In New York’s large suite of self-destructive public policies, it’s hard to choose which one is the very worst. But an excellent candidate is the regime for regulation of residential rents, mostly going by the name of Rent Stabilization.
Because of rent regulation, New York’s rental housing stock is older, more outdated, and less well-maintained than the housing of any other American city. If you got yourself into one of the regulated apartments a few decades ago, you likely enjoy a significant bargain on your monthly rent versus comparable space, to go along with your 30- or 40-year old kitchen and bathroom fixtures and appliances, and insufficient electricity to run a toaster and a hair-dryer at the same time. Try to upgrade to something a little more up-to-date and you will find that your rent will triple, so you are locked in to this one apartment for life. Meanwhile, kids just out of school who have gotten an entry-level job in New York and try to break into the rental market find that they face the highest rental prices in the country. In other words, it’s the progressive vision of perfect justice and fairness for all.
Another effect of the regulation regime has been to seriously degrade the value of the buildings and apartments subject to the rules. So you might ask, if the price control regime takes away all or most of the value of a property, doesn’t this at some point become a “taking” under the 14th Amendment of the U.S. Constitution, giving the property owners the right to seek “just compensation” from the state for the loss of value? (The Fifth Amendment of the federal Constitution states: “nor shall private property be taken for public use, without just compensation”; and this has been held to apply to the states under the Fourteenth Amendment.)
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