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Comment by jrockway | Hacker News Reader

> Rent control fundamentally cannot work

Rent control definitely works, because owners lock in the original price of the building with a fixed-rate mortgage. If you buy a building in 1960 to rent out, you can rent it out at 1960s prices pretty much forever, with only a tiny fraction added to cover increasing property taxes (subsidized for owners of rent-stabilized apartments) and the increasing costs of routine maintenance.

If I were to become Dictator of New York City tomorrow, I think I'd freeze rents as a factor on the acquisition cost of the property + prevailing interest rates on 30 year fixed mortgages. If you want to make today's market rates on your property, you have to build a brand new building. This incentivizes the creation of new housing, and provides stability to existing tenants through rent stabilization even for newcomers to the city.

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The people maintaining your building need somewhere to live, so unless they're in a rent-controlled unit themselves your maintenance costs will rise at the same rate as housing costs, as they're primarily labor.

Rent stabilized apartments increase their rent by ~3% a year. That seems fine for keeping up with costs. You also have to keep in mind that the required work becomes more efficient over time. An example I've noticed is that in times past, every building had a live-in super/porter that would (among other things) take out the trash 3 times a week. Now I see someone driving around the neighborhood in a moped on trash day, parking in front of a building, taking out the trash, and moving on to the next customer. That's probably cheaper than it was, even if the person's apartment now costs more.

So you cannot sell the building? Also you have to get all the tenants out to build, do you have buyouts? This seems like no one will run apartments.

I mean, it's the same as selling a rent-stabilized building today. No, you can't kick the tenants out when you sell. You often sell at a significant discount because of the problem to profitability that the tenants pose. This is fine.

NYC is full of vacant land. You can kick cars out of a parking lot and turn it into a 50 story residential skyscraper without any problem. You can tear down nearly-abandoned office buildings and replace them with housing. Tearing down a building where people are happily living is completely unnecessary. Profitable? Sure, it can be. But the city is under no obligation to making housing profitable. Housing is infrastructure; does the city make a profit by charging tolls on roads? Nope! They don't need to; they exist for the public good, not for your 401(k) plan.

Plenty of people are making TONS of money on brand-new buildings. In the 12 years I've lived here I've watched Downtown Brooklyn change from a forgotten wasteland to the home of the tallest building in Brooklyn. The neighborhood is full of $1M studio apartments (and up for more space) and they are sold before the building even breaks ground. People want new stuff and they can afford it. It doesn't have to come at the cost of existing residents.

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