Will a Rent Freeze Fix NYC or Make it Worse?

Ryan Knutson (0:05)

Earlier this month, I asked a crowd in Manhattan one of New York City's most classic questions. How much do you pay in rent? I want to see it by a show of hands. How many people here rent? Look at that, it's amazing. It's like most people. Does anybody want to say how much they pay in rent? Anybody pay the least? Anybody want to brag about their situation?

Two bedrooms for $1,200?

And you live in New York City? On the Upper East Side? Is that Monica from Friends with the rent-controlled apartment? There's a housing crisis in America. And New York City is no exception. In response, New York City is implementing a rent freeze next month. That means that for about a year, it will be illegal for many landlords in the city to raise the rent on their tenants. But rent freezes are very controversial. Some economists think a rent freeze is a good tool to address a broken housing market. And others think it's actually harmful. The rent is too damn high.

Agree or disagree?

Emily Eisner (1:20)

Agree, duh.

Kenny Burgos (1:23)

Agree but for who? Because my friend over here had $1,200 rent for two veterans.

Ryan Knutson (1:30)

At this live taping of The Journal, I sat down with two housing experts who have two different takes on the housing crisis. You can watch a video of our conversation on Spotify.

Welcome to The Journal, our show about how to fix the rental market and how to fix it. I'm Ryan Knutson. Coming up on the show, what's wrong with the rental market and how to fix it.

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Ryan Knutson (3:41)

New York City is a complicated housing market, so let's start off with some basics. Rent control has existed in New York in some form or another for nearly a century. At first, rent control kept many landlords from being able to raise rents at all. And then, in the 1970s, rent regulations evolved into something called rent stabilization, meaning rents could go up but only by an amount set by the city's Rent Guidelines Board, or the RGB.

Most apartments in New York used to be rent stabilized, but that number has shrunk over the last few decades. And today, there are about one million rent-stabilized units in New York, which is about half of the city's rental supply. At our live event in New York a few weeks ago, I discussed the housing crisis with Emily Eisner and Kenny Burgos. Emily is the executive director and chief economist of Fiscal Policy Institute, an independent think tank focused on economic policy in New York. And Kenny is the CEO of the New York Apartment Association, which represents landlords, including those that own and manage thousands of rent-stabilized homes.

How bad is it? How would you characterize how bad the housing situation is in New York City?

Emily Eisner (4:52)

Okay, I would characterize it as quite bad, but I kind of do want to just take one step back quickly and say that the median rent in the city is about $1700 to $1800 a month. And I just think that that usually strikes people as quite low when they hear it, so I just wanted to level set on that. 30 years ago, it was about $1000 per month. And adjusting for inflation, so accounting for all other price changes and wage changes, it's gone up by over 50 percent now. It's $1700, I guess.