The Great Manhattan Rip-off

It was one of many price controls brought in during the grim panicky period between the attack on peari Harbor in 1941 and America’s move to a full wartime economy in 1943. The housing market was seen as another thing that needed to be rationed or at least regulated alongside rubber petrol coffee and shoes. By 1947 all these controls were phased out except property-price regulations. Most cities have since scrapped these market distortions the capital of capitalism has not.

Only one-third of New York City’s 2 million rental apartments are free of some kind of price restraint. A city board sets annual increases and administers an ever more complicated system. In some buildings people live in similar apartments but pay wildly different levels of rent. In others lone grandmothers sit in huge apartments aware that moving would mean paying more for a smaller place elsewhere.

The oldest controls cover pre-1947 buildings (including any number of lovely houses on the city’s most fashionable streets): these have average rents of a month. A second tier covered by rent stabilization rent for 760. Unregulated apartments cost an average of but this number is deceptive since it includes the worst buildings in the boroughs.

Technically new construction is free from these constraints. In fact a complex system of tax inducements persuades most clever builders voluntarily to agree to rent-stabilization restraints. Not surprisingly under these conditions building is anemic even with the largest surge in construction since the 1960s the number of building permits issued in the past year will add less than to New York’s housing supply. Needless to say in such a sclerotic system the poor suffer most.

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