Pity the Landlord

So, speaking of rent control, here's an article on San Francisco's system. It's pretty much the usual -- the headline bleats that rent control "subsidizes the super rich," a claim for which no evidence is presented unless you count an income of $100,000 as super-rich, which in San Francisco, um, no. And then there's the sob stories of "mom and pop" landlords. Apparently, by some unexplained moral calculus, because some landlords own just a few units and have blue-collar backgrounds, the City of San Francisco should pursue higher rents as a policy goal.

Noni Richen, a former school cafeteria cook, and her husband, who once worked on the Alaskan pipeline, put their life savings into buying a four-unit Western Addition apartment building in the 1980s. “We had $20,000,” Richen said. “That was a lot of money to us, and we put that down.”

I am, let's say, unsympathetic. (How much do you think that building is worth today?) But from another perspective, this is directly relevant to the previous post. There are strong political as well as market pressures that keep asset returns above some minimum acceptable level. Is Noni Richen the liquidity trap? In a sense, yes, she is.

Anyway!

That's not what I'm writing about. What I'm writing about is the claim that a large share of rent-regualted units are occupied by high-income households, making it a perverse form of redistribution. Is that true?

I don't know about San Francisco, but in New York this is an easy question to answer. The city's Housing and Vacancy Survey gives very detailed breakdown of rental units by rent regulation status, including the residents' incomes. And... here we go:

Income	Rent-Regulated Apartments	Market-Rate Apartments	All Households
under $25,000	37.3%	27.3%	27.9%
$25,000 to $50,000	25.6%	25.5%	22.1%
$50,000 to $100,000	25.2%	28.3%	27.0%
over $100,000	6.7%	12.1%	23.1%
Median	35,531	46,000	50,038
Mean	52,157	71,307	77,940

In other words, compared with the city as a whole, rent-regulated tenants are only moderately more likely to be poor, but they are much, much less likely to be rich. So can we nip this meme in the bud, before it spreads to the East Coast? Rent control is not a subsidy for super-rich tenants at the expense of their hardscrabble landlords. It's a way of stabilizing middle-class and working-class neighborhoods in the face of gentrification, just like it says on the tin.