Opinion: Rent Stabilization Isn’t Means Tested—And It Shouldn’t Be

“This line of argument can appear sound—why shouldn’t the poorest New Yorkers get sole access to rent-stabilized apartments?—but it is ultimately a distraction from the real dynamics at play in the rental housing market.”

Every few years, members of the New York media ask the same question: are too many rich people living in rent-stabilized apartments?

Last week, The Wall Street Journal published an article under the headline “A Surprising Portion of Rent-Stabilized Apartments Go to NYC’s Wealthiest Tenants.” Another Murdoch paper, The New York Post, then reran essentially the same story under their own writer’s byline. 

What is that proportion? The articles do not actually say. Instead, they emphasize a meaningless data point: that the price gap between rent-stabilized and market-rate apartments is wider for the richest tenants than for the poorest.

This kind of “water is wet” finding reveals little about our rent stabilization system; instead, it tells us only what we already know: that without regulation, landlords will charge as much for an apartment as someone will pay for it, and the rich can pay a lot more than the poor.

The implication, however, is that the rich are disproportionately benefiting from rent stabilization, so the state should make it a means-tested program available only to the lowest-income New Yorkers.

This line of argument can appear sound—why shouldn’t the poorest New Yorkers get sole access to rent-stabilized apartments?—but it is ultimately a distraction from the real dynamics at play in the rental housing market.

There are three clear reasons why rent stabilization works better as a universalist rather than particularist system.

#1: Stabilization Is a Right, Not a Subsidy

Means testing—or making people prove that they are below a certain income threshold—is justified for legitimately scarce resources. Most often, these are public subsidy programs, to which a finite amount of money has been allocated in the budget. Even these numbers are somewhat fungible—we always find more money for war, not for housing—but still, they represent at least a temporary limitation: the government has not allocated enough money to serve everybody, so what has been budgeted should go to those who need it the most.

But this is not how rent stabilization works. It is not a subsidy program but rather a bundle of rights aimed to give tenants in a tight rental market the ability to remain housed and to prevent landlords from extracting astronomical rent increases from an essentially captured clientele.

Rights should never be means tested. Instead, they should be guaranteed as widely as possible.

One could argue that rent stabilization is different because it only applies to certain apartments and therefore is a finite resource that should be reserved for the poor. But rent-stabilized apartments aren’t exactly scare, since they make up nearly half the private rental market. Albany could also make the stabilized stock even less scarce by altering the rules for which apartments are subject to regulation. It would be far better to expand rights to more renters than to restrict which renters can enjoy them.

#2: Openness Cuts Both Ways

The fact that rent stabilization is not means tested makes it more widely accessible. Critics highlight this fact to point to the richest rent-stabilized tenants. 

Yes, such people do exist, but they are far from the majority. According to the city’s Housing and Vacancy Survey, rent-stabilized tenants are, on average, significantly lower income than their market-rate counterparts. Rent-stabilized apartments are the largest source of housing for Black and Latino New Yorkers, and they are home to far more immigrants than public or subsidized housing. 

This last point is likely related to rent stabilization’s openness, as well as its plentitude. Many immigrants are understandably uncomfortable submitting tons of personal paperwork for government review.

#3: Avoid Administrative Nightmares

The state agency that oversees rent regulation, Homes and Community Renewal, is already overburdened, leading to long delays when tenants and landlords seek administrative action. Adding a massive new mandate to ensure that only the “correct” people are getting rent-stabilized apartments would exacerbate these struggles tremendously. 

It’s odd that conservatives who decry the growing administrative state, and economists who bemoan the “friction” slowing down apartment turnover, would propose a new system that would accelerate both problems, leading to more frustration for tenants, landlords, and government alike.

Proponents of means testing might find it strange that I, a professional advocate for low-income tenants, would defend the rich’s right to rent stabilization. The irony is not lost on me, either. But ultimately this is a red herring: my argument is for universality, not for any system to favor the rich.

Every renter deserves the right to stay put, as well as the right to live where they wish, and a rent-stabilization system that covers as many apartments as possible is one of the best ways to achieve those goals.

Samuel Stein is a housing policy analyst at the Community Service Society of New York.*

*Editor’s note: Community Service Society is among City Limits’ funders.