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NYC rent regulation about fairness, stability - not affordability

It makes sense why real estate groups and developers' lobbying entities have long pushed - consistently and insidiously - the argument that New York City rent stabilization is all about affordability for the metro's most cash-pressured tenants.

As a recent opinion letter to the Crain's New York Business publication notes, that argument disingenuously promotes "the notion that rent regulation is a kind of welfare or housing-affordability program."

Pushing that idea enables the pro-landlord crowd - large, powerful and well connected in NYC - to peg every problem with the system to allegations that it "is broken because deserving tenants [are] not precisely targeted." And while they aren't, the argument posits, undeserving renters are exploiting loopholes at landlords' expense to garner unfair advantages.

A triad of long-time NYC legal veterans and pro-tenant advocates - including Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP partner Sam Himmelstein - responds to the real estate industry's arguments in the above-cited opinion piece.

And it illuminates them for what they are - fiction.

In truth, those writers note, rent regulation is vitally important "to neutralize market distortions." Doing so better ensures a system of fair rents for dwellers residing in a select class of housing. The system has never sought to promote affordability per se.

The writers duly note the arrogant assumption of the realty industry that tenant groups are always thriving at their expense. Arguably, government development programs (e.g., parks, subways, water/waste) have benefited landlords, builders and management companies most of all.

And there is this disconnect: The housing industry persistently complains that its principals are going into debt subsidizing tenants, when data reveal that rising rental values are "beating inflation in multiples."

The housing playing field is not even and fundamentally fair, and it never has been. Removing regulatory controls would not promote greater rationality and more equitable outcomes, as housing groups argue. Rather, it would most surely ensure a material destabilization of New York City's diverse and vibrant neighborhoods.