One of the biggest debates the City of Kingston’s Common Council will have to decide this year is whether to opt-in to rent control. In June of 2019, the State Legislature passed legislation that in part allowed municipalities the ability to opt-in to rent control. Previously, only communities in New York City and Rockland, Westchester and Nassau counties were able to have rent control. Now, if a community has a vacancy rate of five percent or below it can opt-in to rent control for buildings with six or more units build prior to 1974. The City of Kingston is currently moving in that direction.
Towards the end of 2019, the Kingston Common Council authorized $32,000 to be used to pay for a vacancy study. While the Council decides whether to opt-in to rent control, pending the results of that study, I believe it is important to lay out why rent control in the City of Kingston may not have the desired effect that the Mayor intends.
Research and numerous academic studies indicate that rent control just does not work. Recently, a group of Stanford researchers published a report on the City of San Francisco’s recently enacted rent control law. Researchers found that the law increased rent. Landlords in San Francisco responded by converting their buildings into condos they could sell or business properties they could lease without rent-control restrictions — or by demolishing their old buildings and replacing them with new ones that did not qualify for rent control.
Locally, according to Bloomberg, “Sales of New York City apartment buildings tumbled to near-decade lows last year, after new rent rules scared investors away from properties with regulated units.” Developers have decided it’s not worth their time and money to invest in communities with rent control.
As the president of the Ulster County Board of Realtors it is our Association’s stance that imposing limits on rent increases is shortsighted and will reduce the development of affordable housing, as investors turn away from these onerous regulations. Artificially low rent increases set by government will make it more difficult for building owners to keep up with the rising costs of maintenance, upgrades, utilities and taxes. Rent-control policies often tend to discourage people from moving, they harm worker mobility and the economic dynamism associated with it. Additionally, rent control could exacerbate our zombie property problem as more landlords abandon properties due to the crushing burden of maintaining them
Simply put, rent control doesn’t do anything to address the reason that rents are rising. People live in this area because it is a desirable place to live work and raise a family. If construction and development is not keeping up with the pace of people coming to Kingston, prices will continue to rise. The city should build more homes, incentivize developers to create affordable housing, and loosen zoning requirements that hinder new construction.
Alfred Peavy, president
Ulster County Board of Realtors