Your Average Tenant

Among the scutwork I did as a baby lawyer trying to pay the rent was defend landlords who were charged with New York City building code violations. They were largely sitting ducks for the building inspectors, as no building could pass muster under NY’s codes. There were three reasons: the codes were byzantine and vague. Landlords were, on the whole, cheap and tried to do as little as possible.

But the third reason was the tricky one. Tenants. As one landlord explained to me back then, it’s not as if they take a dump in the hallway. It’s not as if they punch holes in the wall. It’s not as if they throw their garbage out an apartment window. Some tenants were fine, great even, but some tenants were awful and made life for other tenants awful. Some tenants paid the rent and others, well, didn’t. Some tenants terrorized other tenants and made their life a living hell, and the tenants who suffered looked to the landlord to fix it.

It’s not that landlords are an otherwise nice people. There were some who were so greedy, so evil and heartless, that they were the terror. And even the landlords who weren’t trying to force out low-rent tenants were still in it for money. People didn’t own buildings because they were charitable and loved humanity. It was a business and it was most assuredly for profit. If it wasn’t profitable, they would be in a different business that was.

New York City had long tried to game the residential apartment market. To a large measure, landlords asked for it, pushing rents as high as they could go, using petty improvements to justify raising rents to circumvent rent stabilization laws. And bringing non-payment proceedings to evict tenants who fell on hard times, even if they had been good and paying tenants for years. They were a cold and heartless bunch. It was just a business to them.

But without landlords, without buildings, without maintenance, repairs and upgrades, where were people going to live? There were projects for the poor, if one didn’t mind risking one’s life walking home at night, but for the unrich but not poor, they needed a place to live too. And they not unreasonably hoped for a decent place, a clean building in decent shape that functioned regularly. In an odd sense, these tenants often sided more closely with the landlord than that bad tenant who was too loud, too dirty, too unpleasant.

The AOC of the New York Senate, Julia Salazar, has introduced legislation to make that tenant’s quiet enjoyment a little more difficult.

Watch out, because Albany may be about to throw another destructive rent regulation bomb our way. State Sen. Julia Salazar is pushing an attractive-sounding “just cause eviction” law. The idea that anyone might be evicted for almost any reason is upsetting, and limiting the reasons to “failure to pay rent, the violation of a committing or permitting a nuisance, or permitting the premises to be used for an illegal purpose” sounds reasonable — until one looks at the details.

The Salazar bill would, first, prohibit evictions based on “unconscionable” rent increases, defined as more than 150% of the Consumer Price Index, which rose just 2.3% from 2018 to 2019. There is simply no getting around the fact that this would usher in a rigid regime of statewide rent control.

There are many scenarios where this limitation would be eminently reasonable. Poor tenant in a poor neighborhood in a neglected building, and even 150% of the CPI seems like better than the landlord should do. But there are other tenants in other buildings in other neighborhoods for whom this creates problems.

Its implicit assumption is that all tenants are in poverty and would prefer to live in poor conditions rather than pay a higher rent. And, of course, that owners, absent regulation, would always raise rents with impunity — rather than doing their best to hang on to good tenants.

The alternative view is that some tenants are in poverty and while they would prefer to live in grandeur, they’re willing to settle for a roof over their head. But not all tenants, and many want nice buildings with amenities, and are prepared to pay the going rate. Most landlords act out of enlightened self-interest, which means maintaining their investment to obtain better rents to make a better profit.

The point isn’t whether you love or hate your landlord, or you have a story of nightmarish evil. There are plenty of those stories. And there are plenty of people who live in apartments in relative normalcy. Pretty much everybody feels the  rent is too damn high, but that’s just the nature of the beast. While some landlords are reaping huge profits, most are not, and some are barely scraping by.

The question isn’t whether Salazar’s legislation is bad for her intended constituency, but whether the legislation for the benefit of the poor, and at the expense of the not-so-poor, will produce perverse incentives. There’s a housing shortage. It will make it worse. Tenants wants landlords to maintain and improve their apartments. This will make landlords do even less than they do now.

Is there a way to protect the poor tenant without impairing the housing prospects of others? That’s the thing about legislation, as it applies to everyone, and this legislation is directed at the protection of a specific group with one set of interests, but will have an adverse impact on another group of tenants with a different set of interests.

Much as we may say we’re willing to sacrifice for the benefit of the poor, tenants do not take kindly to the shabbification of their apartment, the nice one they rented which deteriorates for lack of maintenance or improvement. Aren’t they entitled too?

The question is whether the law is written for the benefit of some at the expense of others, and if so, whether the others are willing to suffer a lifestyle geared to the lowest common denominator rather than the world they would prefer and to which they believe they’re entitled. Having a safety net for those in need is one thing; having a regulatory scheme that incentivizes doing no better than the lowest common denominator means that others can’t choose to live any better than those in need. And if that’s what the law requires, what are landlords to do?

19 thoughts on “Your Average Tenant

  1. phv3773

    Paul Krugman is hawking a new book about zombies by which he means economic ideas which persist despite having been proven wrong. He could have included rent control.

    There are many economists who think the world would be better if we all lived in apartments in big cities, not in homes we own and not in the suburbs. Good luck with that.

      1. TOM JOHNSON

        I just got a new exercise bike that includes a virtual reality headset. I can be anywhere I what to be. Landlords could create images of penthouses the same size and shapes as their hovels with elegant furnishings to match. As long as the toilets work, the tenants would never know what their real life was all about. (SHG – can’t wait for your appropriate song)

  2. Richard Kopf

    Scott,

    I don’t intend to crawl down a rabbit hole. Tell me to fuck off if my question is of that ilk.

    Why isn’t rent control a prohibited inverse condemnation under 5th Amendment of the Constitution if building owners are forced to rent below the market?

    All the best.

    RGK

    1. Fubar

      I know nothing of NY. But in CA, the relevant case is:

      Kavanau v. Santa Monica Rent Control Bd. (1997) 16 Cal.4th 761 , 66 Cal.Rptr.2d 672; 941 P.2d 851

      I must now fuck off and begone for the day for reasons independent of whether I have dived down a rabbit hole or not.

      1. SHG Post author

        Rabbit holes off rabbit holes are the best rabbit holes. Thanks, guyx. Kinda makes me writing these posts seem pointless.

      1. John Barleycorn

        That is true, but I figured it would be a good idea for me to start market testing some of the new tab sections that SJ will have when you sell me the URL.

        Cheers and have fun waxing the healey this spring. I am working on some “SJ Rants on Tape” skits if you are looking for some new cassettes to listen to this year on your Sunday drives. (1% discount on the asking price per cassette) They are all in MP3 but I can burn you a copy or two on some cassettes I have stashed under the sink, since you “original thoughts” seem to be tracking nicely this year.

        The AM radio market is gonna drive some serious traffic to SJ when I roll that out.

        Don’t forget to tip the doormen during your next trip to the city and keep in mind reading will be criminalized if “original thoughts” catch on.

        And if I were you I would to talk to your CPA and tax attorney about the advantages of selling in 2020. You don’t want to fall from” rich to not really all that rich” as that is going to be an even a worse predicament than “unrich but not poor” very soon.

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