Rent Control

E-mail debates of newsworthy topics.
May 20 1997 9:30 PM

Rent Control


From: Malcolm Gladwell To: Jacob Weisberg


Dear Jacob,

       I would like to address the two arguments you made in your SLATEpiece (" Such a Deal") against the immediate abolition of rent control--first, that abolition will drive out the "marginal, cosmopolitan" middle class that makes the city interesting and, second, that it will result in new construction that destroys "gracious and charming" old buildings. For the sake of clarity, let's refer to these as the "cool buildings" argument and the "quirky people" argument, and let me say, at the outset, that I am as much in favor of cool buildings and quirky people as you. It's just that I'm not sure what either of these two things has to do with rent control.

       Let's start with cool buildings. You said rent regulation drives up rents at the top end of the market. Your one-bedroom goes for $2,000, whereas without regulation it might go for, say, $1,400. OK, fine. Then you say abolition of rent control would result in the construction of all kinds of new, uncool buildings. Really? Isn't that backwards? One would think that if abolition of rent control drives down rents, it would actually discourage new construction. After all, right now if I build a brand new 200-unit apartment building, I can charge $2,000 for a one-bedroom. With decontrol, I could only charge $1,400--which surely makes new construction a far less attractive prospect, since that cuts my rent revenue by about $1.5 million a year. If you are really interested in cool buildings--and preventing "horrible" 50-story high-rises--aren't you on the wrong side of the argument?

       There's another reason to think that rent control is anti cool buildings, and that has to do with New York's huge problem with tax-delinquent landlords. Right now thousands of buildings in the city are in receivership--either abandoned by landlords or under the tenuous control of the city because their owners couldn't pay their taxes. Why couldn't they pay their taxes? Because rent regulations make it difficult, if not impossible, for a landlord in a marginal building to get rid of nonpaying tenants or to properly pass on the costs of maintenance and services. Tax-delinquent buildings tend, almost exclusively, to be older buildings, because older buildings tend to have much higher upkeep costs and also tend to have many more tenants with artificially low rents. Delinquent buildings are, in other words, precisely the kind of cool buildings that make New York such a great place. But they are the buildings now getting burned down, or run down, or boarded up because rent regulation makes it impossible for landlords to take care of them.

       The quirky people argument, I have to confess, I don't find any more persuasive. What you are saying is essentially that rent control allows a lot of middle-class quirky people to stay in Manhattan who would otherwise be forced to leave. But this isn't quite right. It really only forces quirky middle-class people who have great deals on their apartment to leave or find cheaper accommodation. Quirky people with bad deals on their apartment would benefit from the abolition of rent control, because now they could get quirky one-bedrooms for $1,400 instead of $2,000. Are there more quirky people with bad deals on their apartment than quirky people with good deals? I don't know. But I'm not sure you know either.

Malcolm Gladwell is a staff writer at The New Yorker. Jacob Weisberg is SLATE's chief political correspondent.

This dialogue grows out of Jacob Weisberg's piece "Such a Deal: The Romance of Rent Control" in SLATE.



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