By nature, one of the characteristics of rent regulated apartments is that they are scarcely available to the public. This stems from two factors: demand for them is naturally high (most people would prefer to pay a lower rent, if available), and the supply of units remains fairly constant (rent regulated apartments are not frequently constructed).

To me, the most surprising figure from the readings was that nearly half of the apartments in New York City are rent regulated. This, combined with the characteristics mentioned above, creates a situation where people living in such apartments generally remain there for longer periods of time, which would make finding an available apartment increasingly difficult. This situation arises because rent regulated tenants have no incentive to relocate, as they can choose to remain in their relatively cheap apartments while housing prices around them rise. In a sense, it creates “bubbles” in the city, where rent regulated buildings offer steeply reduced rates in an area of rising prices. In a single neighborhood, there may be a block of rent regulated units with monthly rates at nearly half or one-third times those of newer constructions.

This “bubble” scenario speaks to the wealth gap that exists in New York City today, and makes me wonder what the outcome would be if that bubble were to pop – that is, if rent regulation was lifted from an area like the Upper East or Upper West Side, where there is a healthy mix of rent regulated units and apartments priced at significantly higher rates. My hypothesis is that it would swing demand away from the higher priced apartments, and settle prices near an average of the two rates.