“The city has the nation’s most regulated housing sector and the largest stock of government-owned and subsidized housing, and yet progressives blame its real estate troubles on the free market.
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These buildings are falling apart, with an estimated $78 billion repair backlog, including “non-functioning smoke detectors, antiquated electrical components, damaged interiors, missing child guards…deteriorated roofs, deteriorated pumps, and leaking pipes,” according to a recent report. The system for making repairs in New York public housing is rife with corruption. Heat and hot water service are routinely interrupted. The elevators, which are crucial in multistory buildings housing elderly residents, are constantly breaking down.
When public housing was created, it was assumed that the residents would be two-income, working families whose rents would cover upkeep. That plan failed as stable families opted for home-ownership. Today, only 2 percent of New York public housing households include two adults with children, and just a third of households report income from wages.
The perverse incentives of public housing help explain why the city is perennially plagued by shortages. According to data from the U.S. Department of Housing and Urban Development (HUD), fully 30 percent of the city’s public housing residents are “overhoused,” meaning single adults are living in 3- or 4-bedroom apartments. About 10 percent of residents have lived in their units for more than 40 years.
This problem also applies to rent-regulated units: Artificially cheap rents mean tenants don’t vacate after their kids grow up and move out, leading to inefficient use of a limited stock.
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The “affordable housing” program championed by Mamdani will likely take the form of new private apartment buildings setting aside units for lower-income families, whose rents are subsidized by the federal government. These programs require developers to navigate extensive red tape, which adds cost and slows housing production. The system allocates units via lottery, so it’s based on luck.
Similarly, rent-regulated units in Manhattan go to tenants lucky enough to get them, or, in some cases, inherit them from their parents or grandparents. Since New York lawmakers have made it so hard to evict tenants for nonpayment of rent, landlords are incentivized to pick high-earners to inhabit this scarce resource.
As mayor, Mamdani would select the members of the Rent Guidelines Board, which sets price increases on nearly 1 million apartments. According to Census data, turnover in rent-regulated units is half that of market-rate units, which is one of the reasons the city’s overall turnover is 46 percent lower than the national average.
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thanks to a 2019 law that made New York’s rent regulation laws far more stringent. Some 200,000 rent-regulated apartments, many in need of ongoing maintenance, don’t generate enough income to cover basic operating expenses, according to Mark Willis of New York University’s Furman Center. He also noted that “such rent shortfalls are likely to continue to grow over time, potentially exponentially, jeopardizing the long-run economic sustainability of these properties.””