Fashion TikToker Carla Badami just racked up 4 million views for an explainer video — how a rent-stabilized New York City tenant can ask the state government for a rent record and ensure it matches what the landlord is charging.
Badami hit upon a tenet of free markets: Renters need not just a supply of choices but also transparency.
We should know what the legal rent is on all regulated apartments, information the state Legislature conceals.
Badami accidentally stumbled upon a common fraud.
Worried that her landlord hadn’t sent her a renewal lease after a year’s tenancy on the Lower East Side, she started wondering about the process.
So she went to the state regulator’s website to inquire.
A few days later, she got more information than she’d expected. “This is where things get juicy. My landlord had been reporting to the [Department of Homes and Community Renewal] that I was paying $1,295 a month. $1,295? I was paying $1,850.”
She confronted her landlord and got $6,000 in overcharged rent repaid and a renewal at the proper rate — in exchange for not snitching.
Now thousands of tenants are doing the same thing.
They know that in any financial transaction information is their friend.
But why should they have to ask?
New York City has 3.7 million homes, a record high, including 2.4 million rental apartments.
Of the rentals, just under a million are “rent stabilized” units — more than a quarter of total housing.
Rent-stabilized tenants, generally people living in older buildings, have the right to renew their leases indefinitely, with increases set by a city board; owners can also charge for some “major capital improvements” like new plumbing.
This system has well-documented problems.
Because rent increases aren’t set by the market but the government and because some apartments went through multiple vacancies at higher reset rents over decades before the Legislature abolished the practice in 2019, rents vary widely from unit to unit, even in the same building.
And high inflation means property owners have a harder time turning a profit.
With 26% of regulated apartments renting at under $1,100, compared with 16% of market-rate rentals, nearly 9% of rent-stabilized buildings are “distressed,” unable to cover building expenses from current rents, the highest level since the 2008 financial crisis.
A less-discussed drawback is the total lack of transparency when you’re renting an apartment.
State law forbids you from learning the legal rent on any rent-stabilized unit but the one you live in.
So unlike when buying a house, where sales prices are public, renters are completely dependent on third parties, who give them scant, self-serving information.
Property owners want you to think everyone in the building is paying a “record high” rent, and brokers, too, want you to think you’re just very lucky they found you a unit at any price.
The Legislature could fix a big part of this by changing the law so all rent-stabilized rents are public information: Just type in an address and see the rents for each unit in the building.
Such transparency would help rent-stabilized renters like Badami, who wouldn’t have to wait a year before learning, by happenstance, her landlord was overcharging her.
It would help people living in the city’s 1.1 million market-rate apartments, too.
In many neighborhoods, particularly lower-rise neighborhoods in Queens and The Bronx, market-rate rents aren’t that different from regulated rents: 25% of regulated units fall between $1,650 and $2,399 while 26% of market units do.
If you’re looking to rent a market-rate one-bedroom apartment in a three-family house in Crown Heights, knowing the full range of regulated units in larger buildings nearby gives you some idea of what the owner can charge for the area.
(Yes, in lower-rent and mid-rent areas, market units do compete with regulated units.)
In higher-income and “gentrifying” neighborhoods, by contrast, market-rate renters would notice: My rent-regulated neighbor is getting a steal and appears to deserve or need it no more than I do.
Why is the unit above me renting for $1,200 to the retired lawyer with a car parked outside and a second home in the Hudson Valley while I’m paying $3,000?
Eventually, knowing all the rents would erode support for rent regulation — which is why the Legislature doesn’t do it.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.
This story originally appeared on NYPost
