It’s an iron rule of New York life: Whenever politicians promise to keep prices down, it’s going to get expensive.
That’s what’s happening with Stuyvesant Town, now that CW Capital Assets Management is getting ready to sell. Already Mayor de Blasio and Sen. Chuck Schumer are working to keep prices there down — at the cost of everyone else.
From its origins, Stuy Town has been a creature of special breaks — for developers as well as tenants. And past favors become an excuse for new ones.
So it was in 2009, when an appellate panel ruled the owner could not raise rents and deregulate apartments while receiving tax abatements under the city’s J-51 program.
But the J-51 program expires in 2020, and tenants fear a new landlord will then be free to deregulate. So Schumer has intervened, saying he got Fannie Mae and Freddie Mac to promise they won’t back any sale that isn’t approved by both tenants and the city.
Meanwhile, the mayor is talking about a new deal that would give owners tax exemptions in exchange for below-market rates for tenants.
Here’s the problem: While below-market rates are a great deal for the tenants, the rest of us will be paying for it.
We’ll be paying for it in terms of scarcity (no incentive for developers to build), higher taxes (to pay for developer abatements) and higher rents in the rest of the market (to compensate for Stuy Town’s below-market rates).
For decades, New York has been looking to government to keep rents “affordable” through special government deals. It hasn’t worked.
How about trying the one thing we know does work: freeing up the private sector to lower prices by expanding supply?