Title: 30 Issues in 30 Days: Rent Regulation

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Brian: It's The Brian Lehrer Show on WNYC. Good morning, everyone. We begin today in our 30 Issues in 30 Days election series, 30 straight shows where one of the segments explores an issue in the New York City mayoral race or the New Jersey governor's race. We were on the Jersey side the last two days, back to New York today for issue number 5. Should the city freeze the rent for rent-stabilized apartments? Should there be a means test for living in rent-stabilized housing?

Does the large number of rent-stabilized units in the city, there are about 1 million of them, is the stat I usually see, does that affect the rent for anyone else who doesn't live in rent-stabilized housing? This will be an exchange of views and reporting between two journalist guests, and we'll play clips of all four mayoral candidates, beginning right now with Assemblyman Zohran Mamdani, who is running explicitly on freezing the rent as he spotlights in this 32nd campaign commercial.

Assemblyman Zohran Mamdani: I'm Assemblyman Zohran Mamdani, and I'm running for mayor to freeze the rent for every rent-stabilized tenant.

Tenant 1: Wait, you're going to freeze my rent?

Assemblyman Zohran Mamdani: Yes.

Tenant 2: Did I hear rent freeze?

Tenant 3: Yes, this guy's going to freeze the rent.

Tenant 4: No hike?

Assemblyman Zohran Mamdani: None.

Tenant 5: This guy's going to freeze the rent.

Assemblyman Zohran Mamdani: It's true. As your next mayor, I will freeze your rent.

Promoter: Paid for by Zohran for NYC.

Brian: Zohran Mamdani in a campaign ad. We'll hear from Andrew Cuomo, Eric Adams, and Curtis Sliwa in other clips as we go. What does freezing the rent mean? Is it a good idea? What's good or bad about the rent stabilization system generally, and who should get to live in rent-stabilized housing? Andrew Cuomo says Mamdani shouldn't qualify because of his income, and Cuomo wants to restore a means test for rent-stabilized tenants. The rent would have to be at least 30% of your income. He did sign a law as governor repealing a previous means test.

This is all part of issue number 5 in our election series, 30 Issues in 30 Days. With me now, Patrick Spauster, who covers housing and homelessness for City Limits magazine. Their slogan is "Empowering, affordable, and thriving neighborhoods at City Limits." Greg David, contributor covering fiscal and economic issues for the news organization, THE CITY, and director of the business and economics reporting program and Ravitch Fiscal Reporting Program at the Newmark Graduate School of Journalism at CUNY. Greg, welcome back. Patrick, welcome to WNYC.

Greg: Always glad to be here, Brian.

Patrick: Thank you for having me. Good morning.

Brian: Listeners, we'll open up the phones at the start on the basic question: Do you support freezing the rent the way Mamdani proposes? Later, we'll get into the Cuomo means test proposal and how much rent regulation is best for the city generally. The first call-in invite is on the straight-up question: Should rent-stabilized rent be frozen as Assemblymember Mamdani is proposing? 212-433-WNYC, 212-433-9692. Tenants, landlords, anyone else, you can also ask a question. 212-433-9692, call or text.

Greg and Patrick, before we compare anyone's views on this question, let's put some basics on the table. Greg, the stats I have are that about 1 million apartments in the city are rent-stabilized, the government sets the allowable rent increases, therefore, and about 1.3 million rental apartments are not. Rent-stabilized ones would be more than 40% of the private supply. I think that's of private sector apartments. It doesn't include public housing. Correct me if I'm wrong. Greg, how is it determined which apartments are rent-stabilized and which are not?

Greg: Just history, most of them were in existence in 1969 and 1973 when these laws were passed. That's group one. Group two are that rent-stabilized apartments are continuing to be built, mostly under tax breaks. If you accept one of the tax breaks, like the 421-a, now the 485-x, you're rent-stabilized, but the majority of your apartments are market rate, and a percentage of those apartments are affordable at below market rents.

The other way to look at it, Brian, though, is you just talked about the rental market. The way I look at it is the New York City housing market is divided in threes. One-third rent-stabilized apartments, one-third market-rate apartments, and one-third homeowner-owned units or homes. I think that's a better way to look at the whole housing market.

Brian: We'll get to that larger picture as we go later in the segment. Where does public housing fit into that, by the way?

Greg: I believe public housing is in the regulated part, but you know what? I don't actually know the answer to that question.

Brian: Okay. Patrick, anything to add to the basics? Is the number of rent-stabilized units kind of fixed now, or could more be added depending on what developers develop?

Patrick: I think there's a possibility for more to be added. I think there's an increasing consensus among policymakers to build more housing in New York. Because of some of the policies that have been put in place, particularly some mandatory inclusionary housing policies, which require areas of the city that have been rezoned for more housing to include some income-restricted units, they're likely to use these tax incentive programs that Greg mentioned.

Brian: All these new ones, like the 20% affordable, has to be included in market-rate housing, depending on the zoning and all of that, do they fall under the rent stabilization system per se, the one in which the rent guidelines board sets the rent increases every year?

Greg: Yes, they do, Brian. What you have to understand is that most of the units come on at the market rate. Therefore, even though their rents may be restrained a bit in fast-rising markets, they're still very expensive apartments.

Brian: Interesting. All right. This year, the Rent Guidelines Board, which weighs what they see as fair to tenants and landlords each year, allowed increases of 3% on one-year leases or 4.5% for two years. Patrick, your article on the topic reminds us that Mamdani got arrested last year protesting the rent guidelines board at a meeting to set the increases. That's before he was running for mayor. Why was that? What was that protest?

Patrick: Tenants have been calling for a rent freeze at the Rent Guidelines Board for a number of years now. Last year, a number of local politicians, in addition to Zohran Mamdani, were protested and escorted out of the Rent Guidelines Board meeting. They've been calling for this rent freeze for a while, and I think Zohran Mamdani's mayoral campaign really put a pin in it and made it a signature issue.

Brian: Now, he's proposing to freeze the rent, as we heard in the ad. Patrick, does that mean for all four years of his term if he's elected?

Patrick: He has promised all four years, yes.

Brian: Does he say how he can be confident that economic conditions won't change enough during that time to revisit the formula?

Patrick: Not to my knowledge. He has promised to appoint a Rent Guidelines Board. The members of that board are appointed by the mayor, and he's indicated that he plans to appoint a Rent Guidelines Board that would go through with a rent freeze.

Brian: Greg, the city's landlords argue that's unfair to them, maybe to some more than others. I see you have an article called Rent Freeze Proposal Chills Cash-Starved Owners of Bronx Buildings. What's that case?

Greg: Here's the real thing you have to understand, and I don't think the likely mayor even understands this, although he is representative of the divide. There are apartment buildings, especially in Manhattan, that include rent-regulated units that are doing exceptionally well. They're doing well because a minority of the units in that building are rent-regulated, or many of them may have been deregulated during the period when that was possible. Because market-rate rents are rising so much, those buildings are in great shape.If you have a 100% or a 90% older rent-regulated building, for years, your expenses have been increasing faster than your rents.

Many of those buildings are losing money at the moment, and in addition to that, their values have plummeted. They're being sold for discounts of anywhere as much as 60% or 70% from what they are purchased. The long-term problem here is that those units, those apartment buildings, will deteriorate if the landlords cannot cover their costs. Now, we can get into the complications of the 2019 law that has made this so much worse, if you want, but what we fundamentally have is that we have a significant amount of the rent-regulated housing stock in danger of deteriorating to the point where it won't be occupiable.

Brian: You raised the prospect in that article of something like a mass abandonment of apartment buildings in the Bronx, à la what happened in the 1970s?

Greg: I do, and it's very important. There's a little nuance in my story that gets missed because of the headline. This is not just in the Bronx. It's almost as severe in northern Manhattan. It's equally a problem in many parts of Brooklyn where these older buildings exist. Now, that fear comes from the people I talk to who are around them. One of the things that's really important to start to understand is that many of these buildings are being sold, but we don't know to whom exactly.

The Real Deal, which I read religiously, has done a great job of reporting all these sales, but they can never get the new landlords to talk to them. Mark Willis at the Furman Center has done enormous great work on this subject, worries that the new landlords are just in it not for the long term, but to milk as much money out of those properties as they can in the short term. That is why we could wind up returning to a situation that took us decades to climb out of.

Brian: Patrick, has Zohran Mamdani been asked about this, to your knowledge, and how would he reply and defend the rent freeze in the context of that concern?

Patrick: I think the case for the rent freeze, particularly the economic case for the rent freeze, revolves around a couple key numbers that the Rent Guidelines Board in their annual process looks at. Tenants I talked to in my reporting point to the 12% increase in net operating income on the whole for buildings, and also point to the fact that in 83% of the community districts in New York City last year, the net operating income went up.

This idea that not all rent-stabilized buildings are doing bad, but that this can provide a tremendous amount of relief to New Yorkers, where rent is the biggest expense and affordability has become a central issue, and this can truly provide relief to household budgets, and to let people spend more money on child care, health care, education, stuff like that. This idea that the rent is eating first sometimes, and that this policy can provide tremendous relief to a lot of New Yorkers.

Brian: That longer-term risk, if it really is a risk, for abandonment of buildings by current landlords or selling them to speculators or whatever, you haven't heard Mamdani address that explicitly?

Patrick: I can speak a little bit to some of what tenants I've talked to and organized tenants have spoken to about this issue, which is the idea that we can provide broader relief to the pocketbooks of New Yorkers, and at the same time find other ways and other programs to help these distressed buildings. Programs like tax incentives and exemptions that have been put in place by the city might deserve closer examination to see if these programs can work to help landlords get some of these buildings in better shape and get some of those units back in the market.

Brian: Let's get a few phone callers on. Marcia in Brooklyn, you're on WNYC. Hi, Marcia.

Marcia: Hi. First of all, I am the beneficiary of my grandparents' developers. They had about 200 rent-controlled and rent-stabilized units on Ocean Parkway in Brooklyn. I lived in one in the mid-'70s. When we had the first oil crisis, their oil prices went up, and they didn't want to put it on to their tenants because they felt privileged to have been able to build such a comfortable income. They weren't very greedy. They were okay with rent stabilization.

I, on the other hand, managing one of their 60 units at the time, felt that we needed to lobby for some relief, but I was convinced by tenants in the building that that was not the tack to take as a good progressive New Yorker. From that point on, I've been a real tenant advocate. I now live in a rent-stabilized building that has been condoed, and I often feel, particularly during WNYC's housing reporting, it's very shallow in the historical battles over rent control. It's since Mayor Wagner and Rockefeller were duking it out in the '60s that we've had these issues, but at one point in those battles, until 1971, we lost 500,000 rent-stabilized and controlled units.

Brian: Marcia, bring us to the present. Do you support the Mamdani proposal?

Marcia: Yes, I'm totally in favor of the Mamdani proposal because I find the argument that your guest made about abandoning buildings being so specious, having helped tenants right here in Ritzy Park Slope not be evicted because their landlords were abandoning the building to sell to equity firms and hedge funds buying up real estate to make a huge profit in the condo and co-op market in New York City. There is a reason buildings are not being cared for, and it is not because there is not the funds to do it. It is because there is a financial incentive to let it go into disrepair.

Brian: Marcia, thank you very much. Greg, do you want to engage briefly? I don't want to go round and round on the same points, but you hear what Marcia is saying.

Greg: First of all, private equity firms are not buying these buildings. That is a complete myth. They're buying unregulated buildings. The people who are buying these buildings, we worry about their motives. Frankly, I think we need to put something on the table here, and that is essentially rent regulation is the only government program that, one, as you will point out, has no income or need associated with it, which is why we have a significant number of people in rent-regulated units making more than $100,000.

Secondly, it is requiring a private landowner to subsidize their tenants. Let's just look at Medicare or Medicaid. We don't do that. We don't make the doctors subsidize the program from their paying patients. By the way, if doctors decide that reimbursement rates for Medicare and Medicaid are too low, they just leave the program. Let's be clear. We are requiring a group of private individuals to subsidize their tenants in a way we do not do with any other program, without any requirements about who should qualify for this subsidy. That is the heart of rent regulation.

Brian: Jeff in North Carolina, you're on WNYC. I know you have a connection to New York and this issue, as you told our screener. Hi.

Jeff: Hi. I retired down here after a career working for a non-profit managing senior low and moderate-income housing developed through the HPD Inclusionary Housing Program. Now, that program initially sets rents at break-even levels, and the only increases available for operating for those buildings is the increases provided by the Rent Guidelines Board.

When those increases don't keep up with the rising costs of insurance, utilities, salaries for maintenance staff, and all the maintenance supplies, those buildings are very much in danger of operating in the red and were subsidized in some cases by the operating budget of the non-profit, taking away from other programs. Any freeze on rent is going to really have a very large, disproportionate impact on any buildings operated by the non-profits that are fully rent-regulated and have no other options for funding.

Brian: Jeff, let me ask you a follow-up question. Greg said at the beginning of one of his remarks, obviously skeptical of the rent freeze, that there are many buildings in Manhattan that might be doing very well, especially the tonier parts of town, and then he contrasted with many apartments in the Bronx and Brooklyn, and probably the kinds of things that you're talking about here, owned by non-profits. Is there a way, in your opinion, to separate those out in terms of policy?

I've asked small landlords who've called into the show a number of times, "Do you really want to be represented? Do you really need to be represented by the big corporate landlords and have your interests tied to them?" Maybe there should be different tracks and different rules depending on whether it's a non-profit landlord like you're talking about or a small kind of family landlord, as opposed to these corporate owners of so many apartments. Do you have an opinion about whether there could be separate tracks?

Jeff: I've given it a whole lot of thought, but I think it'd be incredibly difficult to do. If there was a way to look at the operating budgets-- You do submit those operating budgets to the city on an annual basis anyway, and show your profits and losses and buildings that are actually losing money, and they have to be very carefully accounted for or in danger of losing money, maybe there would be a way to add some subsidy.

Again, these are buildings specifically put up for low and moderate-income seniors, in my case, where the rent increases could still be substantial and be a very big hardship on those individuals. I think you have to take a look at it again from a subsidy point of view, where, especially, the buildings built under the old Inclusionary Housing Program, there is no subsidy attached to them. There is no mechanism to help out with those. The only mechanism was the initial development of the building.

Brian: Got it. Jeff, thank you very much.

Greg: Brian, that call is very important because I didn't get to that in my story. I actually think I need to get to it. Many people have told me that, in addition to the kinds of landlords I portrayed in the Bronx story, there's an enormous crisis coming in the all affordable buildings that were built under the kinds of programs the caller envisioned, which are falling into deep financial distress as well.

Brian: Patrick, do you know if Mamdani or the tenants advocates address that particular lane or the concept that I brought up of maybe there should be different rules for big, profitable corporate landlords than for nonprofits or small landlords?

Patrick: I think that's right. I think it's incredibly challenging to pick one number for a really diverse housing stock that we've been talking about. I will point to the idea that I think tenants would also harp on, which is that 10% of the housing stock, according to the rent guidelines data, is classified as kind of that distressed. That was two years ago. Last year it was 9%. I think tenants would prefer we can provide relief to a lot of households by keeping rent increases low.

Then this population of buildings that needs direct attention and subsidies, taking a close look at the city programs that might be able to help do that, and help get those buildings back in shape. There was a recent Unlocking Doors program that the city did, that was trying to get rent-stabilized units back online that provided $20,000 to renovate an apartment. A lot of landlords did not take the city up on that offer, and they recently raised it to $50,000 to try and get more people involved.

Brian: All right. We'll continue in a minute with a clip of Andrew Cuomo criticizing Mamdani for having a rent-stabilized apartment at his income level and proposing a new means test for everybody. 30 Issues in 30 Days, Day 5, Issue 5 on freezing the rent and means testing the tenants and related issues. 212-433-WNYC, call or text and stay with us.

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Brian: Brian Lehrer on WNYC, Issue 5 in our 30 Issues in 30 Days election series on the Mamdani rent freeze proposal, the Cuomo means test proposal, which we're going to get into next, and the impact of rent stabilization even beyond that, 212-433-WNYC, with Greg David and Patrick Spauster from the news organizations THE CITY and City Limits. Our next call-in is going to be on whether rent-stabilized units should be means-tested or, really, whether the tenants and prospective tenants should be means-tested.

If you were calling just explicitly on rent freeze, yes or no, we're going to clear the board and open it up to this means testing proposal, the main proposal in this category from candidate Andrew Cuomo. One of the many ways that Cuomo is running against Mamdani on the rent freeze has been to highlight that Mamdani himself lives in a rent-stabilized apartment in Queens that costs $2,300 a month, even though Mamdani makes $142,000 a year as a state assemblyman, and his wife has an income too. Here's Cuomo proposing what he calls Zohran's Law.

Andrew Cuomo: I'm going to propose not to rent that apartment by law, except to a person who actually needs affordable housing, and I'm going to call it Zohran's Law because it's an abuse of the system.

Brian: Greg, there's some history here. There used to be a means test for keeping a rent-stabilized apartment that somebody was in, but Cuomo signed a law abolishing the means test. Do I have that right?

Greg: You do, you do. The 2019 law that, in many ways, created this crisis that changed the ability of landlords to deregulate pretty expensive apartments occupied by people who made a fair amount of income. The income part wasn't used that much, but he did sign a law which got rid of it.

Brian: Patrick, is the Cuomo proposal pegged to a certain income or a certain percentage of your income that would have to go for the rent-stabilized rent? Do you have the details on that?

Patrick: Yes. In housing, we talk about 30% of your income being the threshold of what you should be paying in rent. Housing folks don't want renters to have to pay more than 30% of their income in rent. What Andrew Cuomo's proposal is requiring is that actually that the rent needs to make up at least 30% of your income in order to qualify for that rent-stabilized unit.

Brian: How does Mamdani defend his own rent? I don't know if you've done the math. I don't know if you know his wife's income or what percentage at $2,300 a month and their combined income they're currently paying on their rent-stabilized rent. Does he argue against the idea of a means test for stabilized tenants?

Patrick: I think Andrew Cuomo obviously is targeting Zohran Mamdani with this proposal, but I think the reality of who lives in rent-stabilized apartments is that they tend to be lower-income folks. I think 37% of New York's low-income people live in rent-stabilized units. These folks also tend to be Black and Latino. I think Cuomo's attempt to paint Zohran as a typical rent-stabilized tenant is probably not accurate.

Brian: On the general idea, regardless of those stats or taking those stats into account about in general, what if somebody makes $1 million a year, but happens to have had a rent-stabilized apartment for a long time? Should that person be kicked out, means-tested, or a new applicant for a rent-stabilized apartment? Does Mamdani support any kind of means test, or has he weighed in against the Cuomo idea generally, Patrick, if you know?

Patrick: His policy is really more of a populist policy. Rent is such a big portion of so many household budgets that giving some folks relief, especially the 40% of renters that live in these houses, can be tremendous. I suspect Zohran would definitely not support this. I think one thing that's worth considering is that creating more process for getting into housing is going to make it difficult to find apartments in a place where it's already difficult to find apartments.

Not to mention the bureaucratic burden that it might put on a state agency in order to make sure that all those transactions are doing well, and that indeed that the right people are renting these apartments. There's over 1 million of them, and the State Department of Housing and Community Renewal would have a significant task to make sure that that all happens.

Brian: Why would it make it harder to find an apartment rather than, as I guess Cuomo would argue, make it easier for people of limited incomes to find a rent-stabilized apartment? Because they wouldn't have the competition from people who make more?

Patrick: I think folks that live in rent-stabilized apartments, now that are working class or working families, but might not feel like they are able to make ends meet all that much. I think it's important to keep in mind that the median rent-stabilized tenant right now actually is already rent-burdened, meaning they already pay more than 30% of their income in rent, even though they are in a rent-stabilized building.

Brian: Greg, are landlords eager for a means test for their tenants? I could imagine landlords wanting their tenants to be as well-off as possible so they pay their rent reliably.

Greg: No one thinks it's feasible, Brian. No one thinks it's worth fighting for. If you have time for an anecdote, this is how I learned about rent regulation in New York. It's 1986, Crain's New York Business is one year old. We get a little spot every day on the Channel 7 News, and the publisher invites us all over to his apartment. I don't remember if it was Peter Cooper or Stuyvesant. We all watch it. I walk in and he tells us how he has renovated his apartment.

Brian: That's Peter Cooper Village or Stuyvesant Town, the big complex on the Lower East Side. Go ahead.

Greg: He tells us he's renovated the kitchen, and he's created three bedrooms out of his two-bedroom. I said to myself, "Why did someone do this in a rental apartment? You just go find a better one." The apartment was rent-regulated. He wouldn't even tell us how low the rent was. You know what the savings went to? It went to a house in the Hamptons, which made him rich.

All those stats about the median are fine. I recognize that's generally true, but there are abuses in the system, and the tenant advocates and this position ignores the fact there are abuses in the system in which people who make a fair amount of money keep rent-regulated apartments, transfer them to their children so that they can continue to do that. It's just a feature of rent regulation, and we should recognize there are abuses.

Brian: On Mamdani's rent, per se, since Cuomo is making an issue of that, Greg, I did some back-of-the-envelope math. Assuming a certain tax rate comes out of that $142,000, and I don't know what his wife makes, so just on Mamdani's income per se, which is what Cuomo highlighted, $142,000 being a member of the assembly, take out what I think are the likely income taxes, state, city, and federal. Then $2,300 a month would be, I think, about a quarter of his take-home pay, which not so abusive, but I don't know. Have you done that math?

Greg: First of all, Brian, we don't do this on take-home pay. We do this on gross pay, so it's a lot less than that. Look, I think we should give him credit for a couple of things. One, he said he's going to move. He said he understands that he got the apartment when he didn't make much money, and he should move. Secondly, he has offered one solution, and that is we have an absurd property tax system in New York, which puts enormously high property taxes on rental buildings, rent-regulated or not.

This has been an issue that mayors have, because of the political difficulties, ignored for decades. He said he will finally move to change the property tax system so that rental buildings are not overtaxed the way they are now. He has said that he would do that, and that clearly would help these rent-regulated buildings.

Brian: Let's take a couple of calls on means testing. Here's one in favor from James, who's in Los Angeles. James, you're on WNYC. Hello from New York.

James: Good morning. I'll make it quick. I rented in New York for about 14 years and did everything when I first got there to looking at the obituaries, trying to find a place, lived on Roosevelt Island, Park Slope. Long story short, I was already under the assumption, my ignorance, that there was some sort of mean testing for regulation. While I would probably vote for Mamdani if I lived in New York still, I do think he should move out, because I just think it's bad optics.

The sad thing is that there's so many people who do abuse it in that manner. I'm not saying he's doing that, but the House in the Hamptons as one of your guests mentioned. It's not as difficult to find something in LA, although it is if you want to stay and reside in a place that is central LA. I'm hoping that something happens, that I have a lot of friends who still live in New York, Manhattan, Brooklyn-

Brian: You're for the means testing?

James: -and this is something that really needs to get-- Yes, for sure

Brian: By the way, did you say that you, at that time, looked at the obituaries to try to find a rent-stabilized apartment?

James: Not to find rent-stabilized, but I had a friend who actually found one that way. I'm sure you've heard stories about that. They would look at the obits back when they were still in the newspapers, for the most part, and use that as a way of hoping against hope that that unit would come open, and they would be able to get a bead on it ahead of time. It sounds a bit [crosstalk]

Greg: Brian, you're old enough to remember this. People used to line up to get The New York Times when it hit the newsstand Saturday evening, so they could read the obituaries and get to those apartments before anyone else.

Brian: What a New York story. Mike in Brooklyn on the other side of this question, I think. Mike, you're on WNYC. Hello.

Mike: Hey, Brian. Long-time listener and first-time call-in. Wow, I'm actually impressed. Means testing, it has a racist past from Jim Crow, so I think it's also just a specious argument to say that we need means testing when it doesn't work. It's been proven by many, many think tanks that means testing does not work.

Also, I make $100k, and I'm in a rent-stabilized apartment. The thing is, $100k doesn't go that far, considering when median rent in Manhattan for a studio is $4,500, and the median rent in Brooklyn is $3,500. How is that making sense for middle class? All you want to do is pick middle-class people out of New York, and they're the people who make the city. It's just insane that we're talking about this, and you're using this common argument of waste, fraud, and abuse just to take the benefit away from people. That's all you're doing.

Brian: Mike, thank you very much. Here's a text kind of to that point. Listener writes, "Please press. What is the point of the statement 'there are abuses to the rent regulation system'? There doesn't seem to be meaningful regulation of large landlords. Is warehousing apartments a bigger public harm, or some apartments staying with the people who have lived in them for a long time?" Greg, what would you say to that caller and that texter?

Greg: Our apartments are being warehoused because the landlords can't afford to fix them up under the current rules. Why would a landlord warehouse an apartment and forego the rent if it made economic sense? This is the landlords are all terrible, landlords are evil people, and we should regard them as such. The fact is, landlords are businesspeople who are in the business to make a profit. If they can't make a profit, then bad things will happen.

What's important in this discussion, which I've tried to make the point over and over again, is there are two groups of landlords. There are landlords who own mostly market-rate buildings. They tend to be bigger landlords. Those landlords are doing okay. There are lots of landlords, including the two I profiled in my story in the Bronx, who are not like that, who are not doing okay, who are on the precipice of financial disaster, and the consequences for the city will be enormous.

Brian: Patrick, on the particular point that the text raises, warehousing and corporate landlords, would the tenants' advocates say, or would your reporting indicate, that corporate landlords, big landlords, warehouse apartments for different reasons than smaller landlords? As Greg is describing, some smaller landlords might not be renting out their rent-stabilized apartments because they think they'll actually lose money on them. Would the reasons be different for corporate landlords?

Patrick: I'm not sure if the reasons would be different, but tenants would point to warehouse departments as an opportunity for landlords to potentially-- We mentioned the 2019 rent laws that changed the way that a lot of the rent stabilization system worked. Tenants have pointed to warehousing units as a way to gain leverage politically to try and roll back some of those tenant protections. I think pointing to programs like the Unlocking Doors program that I mentioned, where the city made funding available to use them, and landlords haven't used it. Tenants are asking their landlords, if there's money available to rehab these units that are off the market, why aren't you using it?

I think also this idea that, I think this is certainly a subset and a minority of landlords, but folks who bought some of these rent-stabilized buildings expecting to be able to deregulate them, and then had the situation changed in 2019, and found that it was not so easy to deregulate some of their units. Those are some of the buildings that might be in distress now.

Greg: Brian, I think we should discuss that $50,000 figure. What we're talking about here are apartments that have been occupied for a long time, 20 or 30 years, by the same tenant. They have very low rents. We're not talking about a paint job here. There is virtually no apartment like that in New York that can be renovated for $50,000. Now, it's also very controversial about how many apartments are being warehoused, and the figure is an enormous dispute. In my view, we don't really know what they are.

Look, if a landlord could use a city program and renovate an apartment for $50,000 and get rents out of it again, of course, they would. This is a cynical view that landlords are going to hurt their bottom line out of the hope that, "Oh, if we warehouse enough apartments, Albany will do something about it." That's just not how business people think.

Brian: Contrasting views on that. By the way, just for a little comic relief, few people in the control room telling me there's a whole episode on Seinfeld about looking at the obituaries to find a rent-stabilized apartment. Just coming back to that thought for a second. All right. It's issue number 5 in our 30 Issues in 30 Days election series. Should the next New York City mayor freeze the rent for tenants in rent-stabilized apartments, as Zohran Mamdani is running on?

Should there be a new means test for renting a stabilized unit, as Andrew Cuomo proposes? Does having more than 40% of the private sector rental apartments in the city as rent-stabilized affect market rate rents? We're going to get into that next. We've heard clips of Mamdani and Cuomo so far. Eric Adams and Curtis Sliwa to come as we broaden the conversation with Greg David and Patrick Spauster from the news organizations THE CITY and City Limits, and you, 212-433-WNYC.

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Brian: Brian Lehrer on WNYC. It's issue number 5 in our 30 Issues in 30 Days election series. Should the next New York City mayor freeze the rent for tenants in rent-stabilized apartments, as Zohran Mamdani is running on? Should there be a new means test for renting a stabilized unit, as Andrew Cuomo proposes? Does having more than 40% of the private sector rental apartments in the city affect any other rents? Here's Mayor Adams saying Mamdani or any mayor cannot freeze the rent in the blanket way that people hear Mamdani saying, I'll freeze your rent. Here's Adams on that.

Mayor Adams: As we stand here in the housing crisis, someone stopped me in NYCHA the other day, Deputy Mayor, and they said, "The Mayor Zohran is going to freeze my rent." Boy, when folks wake up and realize you can't freeze rent in NYCHA. [chuckles] It's based on your income. You can't freeze rent in Mitchell-Lama. You can't freeze rent in market-rate housing. You can't freeze rent. The rent you can freeze is the apartment he has. [chuckles] This is almost comical.

Brian: Mayor Adams there. Greg David, the mayor is right as far as he goes there. Not on the comical part. That's a political attack. People will debate it, but on whoever the mayor is, has control. You can only freeze rent-stabilized rents, which is not a majority of apartments. That gets us to a broader question of the impact of having 1 million stabilized apartments, the impact on market rate rents, and on affordable housing supply. You wrote an article for Crain's in 2019 that began with these words: "Mixing up cause and effect. Assembly Speaker Carl Heastie claimed this month that rent regulation was instituted because of a shortage of housing units." Why did you say that mixes up cause and effect?

Greg: The cause and effect here is that we have a shortage of housing units because of rent regulation, because it deters the construction of new housing. Anyone who wants, there's this wonderful 2000 New York Times column by Paul Krugman that lays it out. It's centered in San Francisco. I'm not sure he'd write it these days, but it lays it out very clearly. As he says, every econ textbook, and he's written one, talks about the long-term consequences of rent regulation.

Now, the specific problem here is a little more complicated. If we had no rent regulation, would some market-rent apartments be lower? Yes, of course, because of the way the market would work. Rents are soaring in New York because we have not, for more than a decade and maybe longer, built enough housing. We have simply not enough housing for the number of people who need it. If we're going to solve the housing problem, we have to greatly increase the amount of housing we are building.

This, in one of your future episodes, could look at Mamdani's plans to build more housing with union labor, because most affordable housing is not built with union labor, and whether they are economically feasible. If we're going to bring the rents down, we have to build a lot more housing. Adam's administration has made reasonable progress in this. The famous City of Yes rezoning will help. The charter amendments that are on the ballot, which will reduce the council's power, could also make a big difference in doing this. What we have to do is build more housing.

Brian: Patrick, I'm sure many people's heads are exploding hearing the argument that rent regulation causes the housing shortage rather than addresses the housing shortage. Anything from your reporting on what Mamdani would say to argue back at that, or tenants advocates of any kind?

Patrick: I think one way to think about rent stabilization is as almost a consumer protection policy. We have a housing crisis in New York that is spiraling fast, and research shows that rent stabilization policies can help stabilize neighborhoods, meaning that it can prevent people from being displaced and evicted. Sometimes people forget, because we've been in this housing crisis for so long, but rent stabilization is actually only in effect when the vacancy rate in the city, which is just how many vacant units there are, is really low.

Right now, we have a record low vacancy rate at 1.4%, the lowest since 1968, which is easy to forget, but is part of the reason why we have such this dire shortage. I think Greg pointing to housing supply as an important factor is definitely right. The idea is you can think of rent stabilization as a way to stabilize neighborhoods, make sure that working families can stay in New York City, while it takes a little bit more time to build housing supply and get it online to help mitigate those pressures on rent.

Brian: Greg, do you think less rent regulation would yield not just more supply, as you argue, but, as importantly, or maybe more importantly, would it yield more affordable rents that go with people's actual incomes? Because a lot of people would probably think, "They'll just continue to build for better-off tenants and continue to leave people who need rent regulation on the side."

Greg: The rents will rise to the level that New Yorkers can afford them. If New Yorkers can't afford the rents, the population of the city would decline because people will leave. Landlords can only rent if someone can pay it. That's the sort of basic economics. Now, I would agree that rent efforts to mitigate fast-rising rents do make sense. That's what a lot of the states on the West Coast have done.

They have instituted policies, usually under the heading of good cause eviction, to keep rents from soaring. You know what those provisions are? They call for rent increases of 10% a year. They're designed to increase great spikes. We've had rent regulation in New York City in this form since the early '70s, and the results are a housing crisis of unprecedented severity.

Brian: Patrick, Adams, whose clip we played, opposes Mamdani's rent freeze position. Has he weighed in on Cuomo's means test proposal? Do you know?

Patrick: I'm not sure.

Brian: Here's Republican candidate Curtis Sliwa, tangential to what we were just talking about, saying all mayors and mayoral candidates in recent times make unrealistic promises about growing the housing supply when there's something much easier and available they could be tackling instead. Curtis Sliwa.

Curtis Sliwa: All their concepts have to do with the future. We'll build 500,000, 1 million affordable apartments. We'll probably all be dead by the time that comes about. Never trust developers and realtors to fulfill their promise. There are 100,000 mothballed apartments that exist in New York City. 6,000 in NYCHA. The mayor controls that. How could you have 6,000 empty apartments in NYCHA? 28,000 subsidized rent control.

The landlords have to be convinced that if they have a tenant who must go, it can go in tenant-landlord court. Then in the outer boroughs, nobody pays attention to that, none of the other candidates. There are many women who own homes. They live on the property, and they cannot evict people who have overstayed, and so they're not renting their available apartment.

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Brian: Patrick, does Sliwa have a point about all those vacant units of various kinds that aren't being filled?

Patrick: That's a good question. My reporting hasn't touched on this as much, so I can't speak to it.

Brian: All right. Greg, you want to go there?

Greg: I just recalled, Brian, I was on your show once, and we were talking about Airbnb. We had various people in that Curtis described call in who said, "I have two units in my house, but I'm not going to rent them out because I rent them out to the wrong person. I'm never going to be able to evict them. That's why I want to use them as Airbnb." Look, I don't think there are 100,000 warehouse units. NYCHA is not very good at getting people into vacant apartments. When affordable housing projects open up, it takes a long time to fill them because of the bureaucracy. There are things that this city and any administration could do much better in that regard.

Brian: We had a caller who just dropped off, but I'm going to ask her question. Patrick, I'll give you this first if you know. Are any of the candidates talking about the Ezra Klein book, abundance theory of how to get to more affordable housing supply, how to make it easier to build in New York City or elsewhere?

Patrick: Definitely. Zohran Mamdani made an appearance on Derek Thompson's podcast that I think a lot of housing advocates have pointed to.

Brian: That's the co-author of that book.

Patrick: Yes, the co-author. He talked a lot about having a practice of a government that can do things more efficiently and better. Part of that was including housing. He wants to build 200,000 affordable units and has talked about this idea of we need a public sector that is going to be efficient so that people can trust it to get stuff done. One of the biggest concerns in poll after poll for New Yorkers for the election and otherwise is the cost of housing.

I think unlocking the public sector to be able to do that, whether that's through some of the zoning reform efforts that have gone underway that are supposed to increase housing supply like City of Yes, or having the government play a more active role in actually getting some of those units built, whether that's going after more funding to do so or whatever it may be. That's something that I think there's a lot of appetite for, certainly from the Zohran Mamdani campaign, but I think more broadly, a consensus is building around that among policymakers.

Brian: Here's a text that pushes back on the whole abundance theory. "Thinking about like the Williamsburg, Greenpoint, Waterfront," listener writes, "building exploded," meaning so much construction, "as did rents in the hoods." The listener writes, "I think it's hard for people to see the connection between abundance," building a lot, "and rents going down." Greg, what would Ezra Klein or Derek Thompson say to that, or what would you?

Greg: I want to say what the Furman Center says. This is called supply side skepticism, and it's been proven wrong. It's even wrong in Williamsburg and Greenpoint, and there was a really good example of it recently. If you put 10,000 new apartments, many of which are at market rate, in a neighborhood, the median rent, of course, rises, but that doesn't mean the rent rises for the apartments that were there before.

As a matter of fact, as the Furman Center has shown over and over again in a lot of in-depth research they've done, if you build more apartments, you restrain rent increases. I know this has become the conventional wisdom in New York, but it is simply wrong. The people who are on the abundance side do need to start making this point. What most New Yorkers believe about housing, and frankly, I think I'm worried that the candidates fall into this as well, simply isn't what the economics and what the research shows.

Brian: Patrick, you, I think, in your last answer, put even Mamdani in the sort of pro-abundance camp based on his conversation with Derek Thompson. Maybe it's more nuanced than I heard it, but anything on what Mamdani or tenants advocates might say in response to what we just heard from Greg?

Patrick: Yes. I don't know if I'd say that Zohran Mamdani and the abundance folks agreed on everything. I certainly don't think either of them would say that. I do think that even among some of the tenant advocacy groups that I've talked to, I think the concerns about gentrification and displacement are real when it comes to new housing development and cultural change in neighborhoods.

I do think that the general pressure of housing is not just a local issue. It's a citywide and even a regional issue that causes a shortage of housing supply and can accelerate some of the trends that you might see of neighborhoods changing when rents are really high everywhere. In the most desirable neighborhoods, they aren't building as much housing, so people are looking for other places to live.

Brian: Hugh in Brooklyn, you're on WNYC. Hello, Hugh.

Hugh: Hi, Brian. Thanks for having me on. I listen to you every day, so thanks for having me. I'm the president of the Tenant Association for the Affordable Housing Building in Pacific Park, Brooklyn, the one by the rail yards. I just had to push back on the guest because there's a private equity firm that owns 100% of that project's affordable housing, and they're just letting it go into the ground. I just had to push back on that.

Brian: If they're running it into the ground with rent-stabilized tenants, what are they after, as you see it as a housing leader there?

Hugh: All one has to do is look up these buildings, and there's a podcast where they interviewed the COO of that firm. It was an investor conference, and a question about how can an equity firm be profitable off of affordable housing? The quote was, "We streamline our operations." I like to ask people, "What does that mean to you, streamlining operations as far as managing a building? Does that mean you leave the doors broken and unlocked for two years straight?"

We're right next to the Barclays Center, so we get all kinds of wonderful people walking in. It is now fixed, thanks to the great people that live here in our building and the community. Their hard work and HPD, and a lot of other advocates that we've worked with, but that's just one example about how when things break, you just don't fix them. You understaff, you don't have a super in the building, all these things.

Brian: Hugh, thank you. One more call, Philippe in Harlem, you're on WNYC. Hello, Philippe.

Philippe: Hi, Brian. How are you doing? I wanted to just talk about the means testing question. I have two points that I don't really see addressed by Cuomo or the other people pushing that policy proposal, which is, one, assets versus income. This is all about income, means testing income. There's a hell of a lot of New Yorkers that have, on paper, very low or no income, but have substantial assets, equity, stocks, whatever, right, inheritances. I really am trying to understand how this isn't, at least in part, rolling out a red carpet for wealthy people to snap up rent-stabilized apartments.

Brian: Philippe, would that be mostly older, maybe retired people whose current income might be low, but have a lot of assets, or do you think others as well?

Philippe: In part. We're seeing right now a very large wealth transfer from aging boomers and certain Gen Xers to millennial and Gen Z, children and grandchildren and whatnot, that the process has been underway for a while. It will continue, and I think that there's a lot of money that's going to be moving to younger generations as well. The other point is about the actual logistics of this. The city has a pretty poor track record at running programs like CityFHEPS, like the applications.

They're very backed up. There have been city council hearings about this. Every time you introduce means testing, even if it's an on-paper good idea, there's friction. There's people that have to handle the applications. There are paperwork errors. People don't get things that they're entitled to because they didn't fill out the right form. That's another thing that I just think that the candidates should got.

Brian: Philippe, thank you. As we wrap up this segment with one more response from our guests on freezing the rent or means testing for rent and rent-stabilize New York, Greg, do you want to respond briefly, just like 30 seconds, to either of those last two callers?

Greg: Well, I just say that I and other reporters in New York are desperately trying to find out what the private equity firms are doing. There's a really good story in Crain's about their strategy a little while ago. We'd love to hear who these people are who are ruining housing in New York, and we'd like to report on them.

Brian: You mean on the first caller's--

Greg: The private equity. As for the means testing, I would know--

Brian: Running a rent-stabilized unit that they owned, or a building that they owned into the ground for a profit. Go ahead.

Greg: On the means testing, yes, it's going to be complicated. By the way, we means-test for all the new affordable housing we're building. You have to prove your income to get an affordable apartment under all the new programs, so it does work there. It doesn't work great, but it works.

Brian: Patrick from City Limits, any last thoughts on where this goes from here as this campaign heads into its final weeks?

Patrick: Yes, I think it'll be interesting to monitor what actually happens with, obviously, the mayoral election, but even beyond that, with who gets appointed to the Rent Guidelines Board, which sets the rents, might be something to keep an eye on. There's one member of the nine that is rolling over into a new term. There's also a chance that Eric Adams could appoint four new members before he leaves. It's unclear whether he's going to take up that option or not. That will be an interesting test case to see if we do get a candidate for mayor or a mayor that wants to freeze the rent, who they will appoint, and how they do that.

Brian: Greg David from the news organization THE CITY and the Newmark Graduate School of Journalism at CUNY, Patrick Spauster from City Limits, thank you both so much for engaging on this for over a full hour. Thank you very much.

Greg: Thank you, Brian.

Patrick: Thank you for having me, Brian.

Brian: That's issue number five in our 30 Issues in 30 Days election series. On Monday, it's issue six: Should New York raise the income tax on million-dollar incomes or raise the corporate tax? We'll have a similar segment about New Jersey next week, too.

 

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