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
And, there you are, folks. Stop with the fake crisis and reasons to demand rent control and block extremely beneficial projects in the city such as The Kingstonian.
The data is in, and there in fact is not a housing shortage in Kingston, there is a 6.7% vacancy rate and if we can
move forward like smart adults and get The Kingstonian built, along with several other residential proposals we can add another several hundred housing units here, which will in fact allow for more affordable housing in our existing housing stock.
Here’s some of the DATA and FACTS that just came in.
The Rochester-based Center for Governmental Research was paid $32,000 to conduct the city’s vacancy study. In its recently released report, the agency said it considered 46 properties in a study group for the purpose of calculating Kingston’s net vacancy rate. Those properties have a total of 1,415 units, according to the study. Of that total, 1,048 units were occupied, 77 were vacant, and 20 were not occupied but were off the market for renovations or other reasons that made them unable to be counted as vacant, the study said.
Using methodology established by the U.S. Census Bureau, the result was a 6.7 percent vacancy rate for the city, according to the study.
In order for municipalities to enact local rent-stabilization laws and regulations, they must have a vacancy rate of less than 5 percent. The vacancy study could only consider rental buildings that were built before 1974 and had six or more units.