Still, surely it is worth knowing that the pathologies of San Francisco’s housing market are right out of the textbook, that they are exactly what supply-and-demand analysis predicts.

https://www.economicpolicyjournal.com/2019/06/rent-control-horror-returning-to-nyc.html

By Robert Wenzel

This is very bad.

Democrats in the state of New York have announced new bills that would significantly bring back the horrors of rent control that crushed much of New York City real estate for decades and made it near impossible to find an apartment.

New York City developers are in shock.

Developers, including Douglas Durst, Richard LeFrak and William C. Rudin, who are involved with some of the most iconic buildings on the New York City skyline, including One World Trade Center and 3 Times Square, reached out to NY Governor Andrew Cuomo for help to block the legislation.

Cuomo’s answer was along the lines of, “Not my department.”

From The New York Times:

[O]n Wednesday, Mr. Cuomo rebuffed the developers, telling them that “they should call their legislators if they want to do something about it,” said a person briefed on the call, which lasted about 15 minutes.

The phone call capped a humiliating moment for an industry that had long reigned in the state capital.

“I’m in shock. I think many of us in my industry are in shock,” said James R. Wacht, president of the firm Lee & Associates and a board member of Real Estate Board of New York, the industry’s leading trade group. “It’s a lot worse than we anticipated.”

The bills announced on Tuesday night by the Democratic leaders of the State Senate and the Assembly would abolish rules that let building owners deregulate apartments and close loopholes that permit them to raise rents.

The legislation would directly impact almost one million rent-regulated apartments in New York City, which account for more than 40 percent of the city’s rental stock, and allow other municipalities statewide beyond New York City and its suburbs to adopt their own regulations.

Real estate industry groups said the bills would do serious damage to housing in the city by reducing incentives for landlords to renovate existing apartments and to build affordable new ones.

Existing rent laws expire on Saturday. The rent regulation package is expected to be approved in Albany by legislators and Cuomo is expected to sign it today.

Tyler Cowen points to a column on the horrors of rent control that was penned by Paul Krugman in 2000, where he wrote: Read the rest of this entry »