More than 60k rent-stabilized apartments are now vacant

To make housing affordable, one must make it unpalatable to investors. Lack of housing is not a problem - an excess of demand from speculative investors fueled by too low interest rates is the problem.<p><i>Affordable housing is uninvestable housing.</i> Until advocates admit this, the walking in circles will continue.<p>i) Price controls do not work at reducing prices, there are two millennia worth of proof for this.[1]<p>ii) Higher interest rates lower housing prices by lowering the availability of loans. This is a good thing unless you are already bought into the ponzi of ever declining rates.<p>iii) <i>Affordable housing is uninvestable housing.</i> A house is a deprecative asset, the same way cars are. A house does not produce anything. You live in it and it wears down.<p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Edict_on_Maximum_Prices" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Edict_on_Maximum_Prices</a>

So many people here do not know the details of NYC rent regulation, and are posting generalizations and falsehoods.<p>Basically, you cannot raise rents aside from annual increases that are below inflation, and you are limited to a relatively small amount of renovations, and cannot increase the rents much if you do.<p>So you either commit to a potentially multi lifetime below market tenancy that will bankrupt you eventually, or you keep it vacant and hope to demolish it or combine units or pray that the law will change.<p>Or sell it to a guy who will run air bnbs until the city puts him out of business at which point it will go in the tax lien sale. In any event, nobody is investing in bringing these units back online in this legislative environment.

It’s unreal how many people in the comments here haven’t spent any time researching basic issues in Western housing markets.<p>People keep talking about evil investors and taxing secondary and investment properties. But the biggest group of housing investors are primary residence owners: we turned housing into a nest egg retirement plan, and now we can’t undo that.<p>Housing cannot be both affordable and a good investment. Housing should not be any different from any other good or service. This all stems from massive government intervention in housing markets decades ago on the basis of horrible conclusions of family wealth, and further intervention isn’t going to fix things.<p>You want cheaper housing? Slash regulations and NIMBYism, and get government out of the equation.

Gentlemen, experts of economy, it&#x27;s time to realize we are walking in circles from one government intervention to the other. Capping rents, reducing inflation, minimum wage and UBI, cutting or raising taxes, regulations regulations regulations. Each comment here points out the failure of the last intervention, only to promise the next silver bullet recipe.

Holy crap. If I owned one of these, I&#x27;d also let it fall into disrepair until the city condemned it, then build literally anything else:<p>&gt; <i>Any time a tenant vacated, landlords received a “vacancy bonus” that let them increase the rent of the unit by up to 20%, and once an apartment’s rent reached a certain dollar amount — most recently, $2,774 a month — the unit left the rent-regulation system entirely, allowing the landlord to rent it at any price.</i><p>$2774 &#x2F; month is definitely less than I&#x27;d want to charge to deal with a tenant that cannot be evicted, but whose apartment must be maintained using labor priced for NYC. I&#x27;d guess most of the apartments that are being held off-market are way below that threshold, and also need substantial repairs.

If you have an apartment that hasn&#x27;t turned over for 20+ years, you can either rerent it at a low text and get sued by your tenant for lead or habitability violations, or you can borrow money and invest it at less than 2% in a renovation. Both ways you lose a fortune.<p>Or you leave it vacant and still lose money, but you don&#x27;t have to work as hard doing it

I’ve been curious about the dynamics around the often-cited statement “rent control doesn’t work”.<p>It seems that with rent control, you’d have higher demand and lower supply resulting in excess demand (both theoretically and it seems in practice). Does anyone know of any studies that:<p>- Analyse the effects of rent control in the presence of “vacancy-busting” measures like heavy vacancy tax&#x2F;fines? (i.e forcing supply to stay high?)<p>- Analyse the price elasticity of the demand and supply respectively? (i.e is the excess demand mostly demand driven or supply driven?)

So just wanted to get few thoughts down<p>- western house prices are driven (up) mostly by available mortgages and a vaguely poor future discounting ability by most people. In other words adding 10k to the offer just to get the win does not add much to your mortgage but gets you a house.<p>- increases in rates badly hurts people<p>- a free market in real estate is never really going to happen (because politics) but if it existed it would move the politics over to other parts of the economy- if people could not afford to live in the city, wages would need to be adjusted.<p>In short there is no place for a &quot;free&quot; market because the point of human civilisation is to protect (ourselves &#x2F; our tribe &#x2F; those we sympathise with) people from the cold winds of unfettered nature. Whatever part of the whack-a-mole politics is being focused on, the end goal is &quot;decent lifestyle with minimised suffering &#x2F; extremes&quot;.<p>Ie - insurance against the worst.<p>providing insurance against the worst for all society is either a question of paying the huge cost of tragedy for everyone as their tragedy hits, or it is a question of government laying their hands across all ye whack-a-moles and trying to prevent anyone from having the worst outcomes.<p>I think I am arriving at a theory of government that has the goals of totalitarianism but different methods - probably Thaler&#x27;s Liberterian Paternalism.<p>Anyway - understanding the mechanisms of the housing market is important from mortgage availability, land availablity, road and infrastructure building and workers available all seem the big parts.

I remember the last time this came up and vacancy rate was mostly a combination of units that were being given away free to family&#x2F;friends, normal cyclical turnover, and renovation projects. We had crazy low interest rates - it would make sense to see a lot of ownership shuffle.<p>But it&#x27;s kind of ironic to me that one of the known negative externalities of rent-stabilization is a loss of inventory. I&#x27;m not so sure how shocked I should be to see ... a loss of inventory.

About 2% of total NYC apartments for reference

Burnaby will charge you if you leave your rental unoccupied<p><a href="https:&#x2F;&#x2F;www2.gov.bc.ca&#x2F;gov&#x2F;content&#x2F;taxes&#x2F;speculation-vacancy-tax&#x2F;faq-speculation-and-vacancy-tax" rel="nofollow">https:&#x2F;&#x2F;www2.gov.bc.ca&#x2F;gov&#x2F;content&#x2F;taxes&#x2F;speculation-vacancy...</a>

We don&#x27;t need rent regulation. We need progressive property tax. This would make professional investors drop real estate on the market like hot potatoes, tank the real estate price and made it affordable to buy for people who intend to live in properties they buy.

Wasn’t it like 50 years ago when NYC landlords were torching their own rent stabilized property for the insurance? Because the rent levels were making the buildings money sinks?<p>We’ve come full circle.

Advocates want landlords to manage their property as unprofitably as possible. These kinds of anti-profit policies are enormously harmful to housing affordability&#x2F;availability. See rent control for example:<p><a href="https:&#x2F;&#x2F;www.econlib.org&#x2F;library&#x2F;Enc&#x2F;RentControl.html" rel="nofollow">https:&#x2F;&#x2F;www.econlib.org&#x2F;library&#x2F;Enc&#x2F;RentControl.html</a>

If rent-controls are the solution, why not expand them? Why not have price controls for housing in general? Let&#x27;s say only allow to sell housing for inflation-2% per year more than you bought it for? That would keep it affordable for everyone and stop the unearned gains from price rices?

The Great Forgetting, yet again.<p>Few things have been proven as resoundingly as &quot;price controls don&#x27;t work&quot;, or more accurately &quot;are very net negative&quot;.<p>This gets forgotten every time someone really wants them to work.<p>This applies to rent control as much as any other price.<p>When you want the price of something to be lower, subsidising demand increases prices rather than lowering them.<p>Suppliers and owners will not simply accept lower prices, even if you really wish they did.<p>The Great Forgetting - price controls don&#x27;t work.

Strange, we were assured in a HN thread a few days ago that landlords would <i>never</i> keep units vacant because the economics just don&#x27;t make sense!<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=33224502" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=33224502</a> - discussing how Yieldstar, a consultancy, advises some landlords&#x2F;property managers to hold or accept a higher vacancy rate while raising rents to increase overall profit.

A better headline would be &quot;More than 60K rent-stabilized apartments are kept off the market by landlords&quot;.

So they neglected their properties for decades and now about to fix them for free?

If these pricks are deliberately leaving flats unoccupied to drive up cost of housing, then local government should step in and confiscate them and allocate to people who really need housing at a decent rent amount.