So this article has some really great points on BOTH sides, BTW. I as a resident of NYC for about 50 years AND a Landlord of small buildings (4 Family and below) have a couple of insights in regards to comments made about NYC.
FIRST, the article does sight some important issues in regards to regulated apts where the family unit was large and then, over time, reduced to a very small size. The example has a woman who is a Widower and lives in a 3 Bedroom regulated apt, but was not asked to down size after her family reduced in size.
In defense, however, I would ask how often does this happen? I do suspect quite often.
This in itself causes a shortage.
I also know that any RE Investor who is looking for his next investment in NYC should be smart enough NOT to buy to close to a low income housing project. Most crime DOES happen there and rents will be much lower than areas that are the same distance to work but are further away from these low income housing complexes.
What the article does NOT address is the impact of AirBnB and other STR. In the mostly low rental areas in NYC but are easy to get to Manhattan or good areas in Brooklyn, Landlords would rather rent short term than to rent to an unqualified tenant and potentially get into a court case, this is ASIDE from making better income on the STRs.
That also reduces the supply of available apts.
Other issues that has not been addressed but was touched upon when over-consumption was mentioned is that in these rent regulated buildings, there is usually a high demand for services, which will add to a landlord's expense, such as older residents demanding more heating despite conforming to heating laws (BTW, this isn't every landlord... I do know there are a lot of NYCHA buildings that fail to supply heat at all!).
Had renters actually had to pay for their own consumption, they would really think twice about keeping the window open during freezing winters and adjusting their thermostat.
Many have a sense that if the Landlord is paying for a service, it's ok to waste it.
Another issue not really addressed in the article is that rent regulated apts include tenant protections even when the tenant had done something criminal. For instance, in the low housing complexes, I have a contractor that served as a maintenance person for over 20 years. He tells me that he has to fix the locks at least ONCE a WEEK because someone will eventually forget their keys and just break the lock. It's a sense that because the city has hired someone to fix things like that, it's ok to break it. Same goes for the surveillance cameras as well.
What really is problematic is that no matter how much you try to tell people NOT to FLUSH down things like diapers that will cause the sewers to back up, it ALWAYS happen... and, according to my Contractor.... there is no worse job than to clean up that mess.
So.... correct some of these that lead to over-consumption, high maintenance costs, etc. and you may get a better, more affordable housing situation.
I don't think it's a large percentage of the people that are the problem. It may be only about 10% or 20% of the population in these low income housing complexes. But they make it HELL for everyone else and drive the cost of ownership WAY up.
No one wants to own one of these over the long run. It doesn't really make sense if you cannot evict problematic tenants, restrict rental increases and your costs goes up over time while market rate apts sky-rocket.
HENCE why I invest in smaller buildings that are not rent-regulated. It's actually a gold mine because you have much more control over your buildings and the residents in it and the Vacancy Rates are held incredibly low because rent-regulated apts are basically removed from the available housing stock, lowering the supply of apts, as well as other factors including AirBnB.
I have also seen abuse go both ways where Landlords purposely harass tenants. In fact, one strategy is to file for eviction on all your rent regulated tenants, regardless if they have done NOTHING wrong. It only costs $75 to file the papers, so why not? AND, it is very possible that hard working low income tenants may not make the court appointment. Obviously, VERY abusive.
It creates incredible injustice not only to the tenants, but also to us smaller investors. We buy expensive small buildings. But these abusive landlords buy big, rent-regulated buildings CHEAPLY, harass the tenants, pay low taxes, evict as much as then can, and reap the rewards of their bad behavior.
That's incredibly unfair to someone who buys at a premium and plays fair.
So there is a disconnect on Each Side and it's a very difficult problem to solve.