Uh-oh, my synapses are firing again. That’s not a good thing, because frequently it’s about something I can do nothing about. Two weeks ago, I wrote a piece about how all the new residential units being added to the neighborhood has led to the rare occurrence of flat local rent renewal increases. A great contrast to a red hot rental market citywide. So late one night, after downing my fourth or fifth nano brew at a local watering hole, I could not help but wonder ‘What if this phenomenon, increased supply = lower rents, were taken a step further?’
More specifically, what if all 5000 Hunters Point South(HPS) apartments were market rate instead of 60% being allocated to “Affordable Housing?” What would the influence of all this new market rate supply be on local rents??? In light of the lack of a specific number, I am going to throw one out, 8% lower*. In other words, if ones rent is currently $4,000 a month, it would be like having your doorman handing you three $100 bills as you stepped into the lobby on the first of every month.
Of course all those hundred dollar bills are going into someone else’s pocket. Maybe someone who opted to take a job that went from 9am to 5pm, instead of 8am to 6pm like yourself. Or someone who chose a profession where the pay is lower, but the benefits are much, much better. The differences are not very significant, though you may be in a slightly higher tax bracket and thus be helping even more with the subsidy.
Finally, there is a silver lining to this story. If there is less market rate supply, then existing unit owners don’t have to lower their rents to the same extent they would under a true free market economy. Thus your landlord, whether it be Avalon, Rockrose, or TF Cornerstone, gets to pocket the difference.
Think about that the next time your local pol talks about bringing more affordable housing to the neighborhood.
*don’t ask for logic as to how I came to 8%, if you want to debate it then input your own numbers in the comments section, replete with math. Otherwise the number stands.
The Perverse Effects of Rent Regulation – not exactly the same thing, because it talks rich vs. poor(20th century) instead of middle vs. middle(21st centruy). Plus it’s Manhattan-centric.
Bar Buzz: Dutch Kills Centraal Opens in LIC – an excellent local review of the bar in my headline from last week
Brooklyn Grange(LIC) Butcher Paper Dinners – I poke fun at anything labeled artisanal or farm-to-table, but these look awesome. There’s another one on October 6th, click here for details.
A Brew with a View – the VV talks up LIC’s own Rockaway Brewing
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