Pur Autre Vie

I'm not wrong, I'm just an asshole

Monday, June 17, 2019

Kinds of Rent Control

In my previous post I argued that rent control is generally undesirable. Affordable housing is important, but it is not the kind of thing that can be done by fiat, at least not without serious negative consequences. In general if you want cheaper housing you need to (A) allow more of it to be built, and more densely, or (B) improve transit so that the supply of housing within x minutes of the city center is increased (the Tokyo approach). Or, ideally, both.

However, not all rent control is created equal. The principal harm of rent control is that it pushes rents far below market prices, causing serious distortions as described in my previous post. Small deviations from market prices aren't nearly as big a problem. Here are a few policies that I think could alleviate a lot of tenants' worries without causing too many problems.

1. Encourage (or mandate) "rolling" leases that don't terminate on any specified date, but instead are perpetual until they are terminated on x months' notice. The landlord also can't raise rents except on x months' notice. By itself this isn't really rent control, since the amount of the rent increase needn't be regulated, this simply means that tenants will always have x months to make new housing arrangements if the landlord either decides to allow the lease to expire or to raise the rents dramatically. (By the way, I think x = 8 is pretty good, but I could see going all the way to x = 12.) The idea is that tenants shouldn't be caught in a situation where they have to secure new housing in a hurry or face steep rent increases. It's kind of crazy that how protected your living situation is fluctuates every year between 1 and 12 months. Much better to have a constant, modestly high level of protection throughout the year.

A landlord who truly needs a hard deadline on a lease (for instance, because he wants to move back into the unit) would have to make that abundantly clear at the outset. Basically any lease shorter than x months would have to be for special circumstances only (e.g. a student leasing an apartment for a summer internship). This creates a bit of a line-drawing problem, but not an insurmountable one.

(By the way, this regulation would only apply to the landlord. The tenant would still be able to terminate a lease on shorter notice, maybe 2 months or something.)

Admittedly it's a little puzzling to me that this solution doesn't seem to be very common in the marketplace. I would have thought it would be very popular with tenants and only mildly annoying to landlords, and therefore would be bargained for. This is maybe a warning sign that this would be worse for landlords than it appears, although there's also just a tremendous amount of stasis in the way people do things, and quite possibly landlords wouldn't mind much.

2. Allow rents to increase by no more than y% per year. Here, y needs to be low enough to offer real protection to tenants, but high enough that rents don't get too far below market prices. To me, the high single digits seems good. The idea is not to mimic traditional rent regulation, where an apartment remains cheap for generations, eventually becoming comically cheap relative to market rents. The idea is to protect tenants from rapid shocks that totally upend entire neighborhoods at once. If a neighborhood becomes vastly more desirable, because of a drop in crime or a new subway station or whatever, under this system rents can still double within about 10 years, ensuring that they don't remain below market for too long. On the other hand, tenants have plenty of time to make new arrangements, never facing a terribly steep rent increase in any given year.

Now there are three important caveats here. One is that if you adopt this policy, you also have to make leases perpetually renewable at the tenant's option. Otherwise the landlord will simply terminate the lease in lieu of letting the tenant stay at below-market rents. (Obviously a tenant who is violating the lease can still be evicted, but a tenant who is paying rent timely and not wrecking the place has to be able to renew as of right.) Alternatively I suppose you could lock in the rent even if a new tenant moves into the apartment, so the landlord can decide to get rid of an existing tenant he doesn't like but can't evict him for profit.

The second caveat is that you probably have to make an exception for big improvements that the landlord pays for. If the landlord does something like install a new laundry room so that tenants don't have to walk outside to do laundry, the landlord should probably be allowed to recoup the costs through a one-time rent increase in excess of the legal limit. You have to be careful to make sure these improvements aren't pretextual ("I installed some new patio furniture on the roof, now your rent is 50% higher!"), but legitimate improvements should probably be grounds for increased rent.

The third caveat is that landlords may front-load their rent increases. Let's say a landlord is leasing an apartment at market rent. If the landlord anticipates that market rents might rise by more than y% for the next several years, he might raise rents by y% this year so as not to fall behind. That means that temporarily the rent for this apartment is above market rent, a perverse outcome. I don't think a landlord could get away with this for very long (the tenant will just move to a market-rate apartment), but you can't rule out the possibility that this would become a problem in some situations. In particular, landlords would probably start raising rents at the legal limit well in advance of a major improvement to a neighborhood like the addition of a new subway station. I'm not sure what you could do about that, maybe nothing.

By the way, I think these two policies go really well together. Every year your landlord would tell you, "Hey, in x months your rent is going up by (z where z <= y) percent, or you can move, your choice." You would be able to stay in the apartment at a non-ruinous price, or you would have x months to find a new place. Meanwhile an apartment would generally only stay below market rent for a few years at a time, so the distortions caused by the policy would be pretty minor.


Wednesday, June 12, 2019

Thinking About Rent Control

It appears the New York State legislature is moving toward an expansion of rent control. I want to lay out some basic thoughts, possibly in preparation for a more detailed post later, we'll see. Throughout this post I use the term "rent control" to mean a legal prohibition on charging more than a specified amount for leasing a residential unit (so in other words, I use the term to include "rent stabilization"). I also assume that tenants in rent-controlled apartments have perpetual renewal options—that is, the landlord cannot choose to rent the unit to anyone else or to move into the unit at the termination of the lease. Instead the landlord has to continue to rent the unit to the tenant for as long as the tenant is in compliance with the lease. This is not a necessary feature of rent control, but I believe it is true in New York.

Rent control is sometimes presented as a left-right issue, the assumption being that leftists will favor rent control while conservatives will oppose it. I think it's important to resist that framing for a variety of reasons, the most important being that the winners and losers from rent control don't neatly correspond to "the rich" and "the poor" or whatever.

Instead I think the right way to think about rent control is to consider (A) its direct consequences, (B) its political consequences, and (C) basic principles of fairness.

The main pragmatic problem with rent control is that it leads to under-provision of housing and leads to inefficient use of existing housing. Taking the second issue first, in general rent control will encourage people to consume more housing than they need where it is scarcest. Here are two examples:

1. A family lives in a 4-bedroom apartment in NYC with a maximum legal rent of $1,400. The children move away, and the parents would prefer to downsize to a 1-bedroom apartment in NYC. But they can't afford to—the rent for a 1-bedroom apartment would cost at least $2,500. As a result, an apartment that could house an entire family is used by two people. If they get divorced, maybe the apartment will end up being occupied by one person, a tremendous waste of space.

2. An individual lives in a 1-bedroom apartment in NYC with a maximum legal rent of $1,000 (on the free market, the apartment would cost $2,500). This individual is offered a job in Chicago that pays just as well as her job in New York, and she is inclined to take the job because she prefers Chicago to NYC. Also, the cost of living in Chicago is lower than in NYC (there is less of a housing shortage there). However, the market price of a 1-bedroom apartment in Chicago is $1,700, far more than she is paying in NYC. As a result, she stays in NYC, unwilling to take what would amount to a $700/month pay cut.

In both cases, people had preferences that, if acted on, would have freed up housing in NYC (where it is especially scarce), but rent control prevented it. Now in fairness, rent control can cut the other way—imagine a couple that has a baby and wants to move to a bigger apartment, but can't afford to give up the rent-controlled studio that they are occupying. But that's not great either, even if (unlike our earlier examples) it reduces observed demand. In an ideal world, the price of housing would reflect its social cost, and people would make decisions according to their needs. In a lot of cases, that would involve economizing on space or moving to a different city, which would increase the available supply and lower market costs.

Rent control also tends to suppress supply, although there is a tricky question here involving how landlords and developers form expectations about the future. One thing you can theoretically do is impose draconian rent control on existing units, while leaving all units built in the future totally unregulated. In that case, if developers believe that rent control will never be imposed again, their incentives to build new units are not necessarily reduced. However, I think it's somewhat unrealistic for expectations to work this way, particularly if the legislature periodically imposes new rent controls. Certainly if the topic being debated is "Should we impose new rent controls on top of the ones that already exist?" it seems as though developers should not expect the pro-rent-control side of the debate to win just this once and then lose forever after.

To the extent developers expect rent control to be imposed in the future, it obviously affects the buildings that are built today. In particular, no one has ever suggested imposing rent controls on owner-occupied units, so developers will tend to build condos rather than rental units in expectation that rental units will lose lots of value in the future. Or developers will focus on luxury units that are likely to have tenants who are not likely targets of the legislature's sympathy. All of this will decrease the construction of affordable rental units, exacerbating the shortage of rental housing in the city. (To the extent developers simply build condos one-for-one instead of rental units, possibly the housing shortage wouldn't be worsened too much, but of course a lot of people can't afford a down payment and so the affordability of the city's housing would still take a hit.)

Zoning politics are complicated, but I think it's fair to say that people are more likely to support construction of new housing units when they will personally benefit. Of course the main beneficiaries of housing construction are (A) people who don't live in the city yet but would like to move here (but who definitely don't vote here yet), and (B) renters who live in the city and would like rents to fall. Obviously people who don't vote in the city aren't going to exert very much electoral power, but market renters are a natural constituency for more building. Expanding rent control shrinks this constituency and makes it less likely for pro-building policies to be enacted. This, in turn, exacerbates the housing shortage.

Finally, fairness is obviously debatable, but rent control has a few features that are particularly obnoxious. It amounts to a tax imposed on some landlords and not others, rather than a broad-based, equitable tax. Property taxes in New York are shockingly low for some kinds of housing (mostly single-family houses, I believe), and it would be possible to raise taxes and use the revenues for housing vouchers targeted at low-income people. Instead we picked random landlords and stripped them of most/all of the value of their property and bestowed it on random renters (not necessarily low-income). Those incumbent renters are now paying vastly less rent than poorer people who happened to move to the city more recently.

So this is my basic framework for thinking about rent control. Rent control reduces the supply of housing, increases effective demand, reduces support for upzoning, and is much less fair than a broad-based policy that benefits people proportionately to their current circumstances. But all of this has been fairly broad-brush, and I hope to drill down on a few variants of rent control in future posts.

Wednesday, June 05, 2019

ugh

Friday, May 31, 2019

Truth or Consequences

One of the trickiest things to navigate is the gap between what is true to say and what is useful to say. I don't mean this in the juvenile "I'm not a jerk, I'm just a truth-teller!" way. I am specifically thinking of a recent study (which I haven't read and probably won't) that was reported as concluding that when people are educated about actions they can take to reduce climate change, they become less likely to support political efforts to address climate change.

This could generate some very awkward conversations if it is true.

"Hey do you think I should take a plane to Boston or a train? Or maybe even a bus?"

"Uhhhhh... do whatever you think is best!"

"You don't think it's irresponsible to take a plane for such a short trip?"

[nervous, sweating] "No, why would I think that?"

This is a general problem, I think. It is a much bigger problem for public figures than for private ones, of course, and the ability to "speak your mind" is a major reason to remain a private figure if you have the choice. But even for regular people, it's hard to know when to tell the truth and when to say things that are useful. Mayor de Blasio takes a lot of grief for driving to his old gym in Park Slope every day—maybe it would be better not to mock him for it so that he might be more inclined to support progressive policies.

Tuesday, May 14, 2019

Bicyclists Should Be Held to Account When They Break the Law in Ways That Endanger Pedestrians

There's a kind of annoying back-and-forth between anti-bike assholes and pro-bike assholes. It starts like this:

The obvious counterpoint to this is:

(Another obvious counterpoint: What do helmets have to do with this? A lot of antipathy to cyclists seems to be poorly focused on the behaviors that are actually problematic. If anything I would think a cyclist without a helmet would be more careful about avoiding collisions, holding everything else equal. The cyclist who killed Jill Tarlov seems to have been in the habit of wearing a helmet, and it didn't save Tarlov's life.)

It is frustrating because cars do vastly more damage than cyclists, even putting aside indirect harms like air pollution. Citi Bikes in particular are probably some of the least dangerous bikes on the street because they are slow and bulky. Also, I speculate that the demographics of Citi Bike users probably skew toward people who bike at a leisurely pace. A friend recently pointed me to the term MAMIL and it nicely encapsulates a certain kind of person I frequently see biking far too fast near pedestrians. MAMILs are not riding Citi Bikes.

That said, it's insane to me that some "pro-bike" activists don't think the rules should be enforced against cyclists. (The scare quotes indicate my belief that this kind of activism is counterproductive and therefore in effect anti-bike.) Every year or two a bicycle crashes into a pedestrian with fatal consequences and as far as I know it's always the pedestrian who dies. This happened a few weeks ago when a bicyclist decided that the rule against running red lights did not apply to him. The woman he killed, Donna Sturm, fractured her skull, entered a coma, and died. Her employer stated:

All of us who live or work in New York City do so at our peril because of bike riders speeding through intersections and often going against traffic on one-way streets. Bicycles should have a license plate to create accountability for the riders. We pray that Donna will fully recover from this tragedy.

(The statement was issued before Sturm died.)

As far as I can tell the most recent fatality before Sturm was Shun Kwong Leung, who also suffered a fractured skull after a cyclist ran a red light. (Leung was Chinese-American. I sometimes hear the argument that traffic laws shouldn't be enforced against bicyclists because many of them are immigrants. The problem is that the people they kill can also be members of minority groups, so the argument is weaker than it first appears.) Jill Tarlov, the pedestrian who was killed by a biker in Central Park in 2014, also died from head injuries. The cyclist in that case deemed the collision "unavoidable," a conclusion I find it hard to endorse.

As far as I can tell, none of the cyclists I've described was charged with a crime, though Leung's family (and his representative on the city council, Margaret Chin) demanded a prosecution. (There have been conflicting reports about whether Sturm's killer was issued a ticket for running a red light.)

It seems abundantly clear to me that two things are true:

1. Bicycles are responsible for less injury and death than cars, at least on an aggregate basis (maybe not on a per-mile basis), but

2. This does not mean that it is acceptable to use bicycles in such a way that pedestrians are put at the risk of serious injury and death.

The only coherent argument I've heard against requiring bicyclists to respect pedestrian safety is that the NYPD simply can't be trusted to do it. They've certainly earned this distrust:

(To be clear, I don't think Gordon would argue against enforcing any rules against cyclists, he's just noting the way cracking down on bicyclists often means harassing minorities rather than doing anything to promote safety.)

But at the end of the day, if it's important to enforce the law, then you can't decline to do so because the NYPD isn't the police force you would ideally want. I would observe in this connection that it's not just the deaths and serious injuries that are the problem. Many New Yorkers don't own cars and can't afford taxis, and therefore often get from place to place on foot. When it is harrowing and dangerous to do so, it worsens people's lives even if they never personally suffer a collision. I've had several close calls with cyclists, and I imagine most other New Yorkers have as well. It makes the city less walkable and less enjoyable, degrading the one thing that truly sets New York apart from other American cities. Pedestrians shouldn't have to dodge bicycles when they cross the street, and bicyclists should be expected to conduct themselves in a way that doesn't threaten other people's lives.

[Updated to fix typo and reword a sentence.]

Tuesday, May 07, 2019

Majestic Falcon

Simply posting a couple of screenshots that I took from this falcon cam that I love.

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They're very similar photos, the first is overall more pleasing but the second catches the falcon in full stride. There is something stirring about his hunched profile and the ferocity of his gaze.

Monday, April 29, 2019

Citi Bike and Topography

As an exercise for the reader, see if you can identify which way the hill slopes in Crown Heights/Prospect Lefferts Gardens:


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I bet you could make a pretty good topographical map using nothing but Citi Bike data. Think how much easier it would have been for the colonists if they could have used Citi Bike data instead of tedious surveying!

Citi Bike Patterns: Tides and Rivers

It's a little after 7 p.m. now and the situation in lower Manhattan has changed a bit:


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As you can see, on net after the evening commute, Chinatown and the Lower East Side have gained bikes while the financial district has largely lost them (it's a bit mixed as you can see). Tribeca remains crowded with bikes. I assume this reflects commuting patterns, with Wall Street workers heading home and with Tribeca attracting an evening crowd for food and entertainment.

This is really the best case for the argument I made in my previous post for expanding the docks. Where stations are alternately full and empty, larger stations allow more people to use the bikes without adding much extra work for system employees. The analogy here is to a tide—the bikes come in, the bikes go out, all according to a diurnal cycle that naturally repeats itself. I'm not saying Citi Bike employees (and Citi Bike Angels!) never have to rebalance the bicycles, but in the ordinary course they just go back and forth with regularity. All you have to do to increase capacity is build more docks and add more bikes.

Stations that are perpetually full or perpetually empty are a harder case. In contrast to the tidal flow of lower Manhattan, the analogy here is to a river flowing from one station (or group of stations) to another. For instance in Park Slope most of the stations toward the bottom of the slope are in perpetual surplus, while the stations at the top of the slope (by the park) are in perpetual deficit. In effect there is a river of bicycles constantly going down the slope, presumably because people like to coast downhill but don't generally care to pedal uphill. Here's what it looks like (the slope is generally uphill as you go east):


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This is what Park Slope always looks like. I knew before I went to the map that I would find a suitable screenshot to illustrate my point. Individual stations vary, but the pattern of green stations at the bottom of the slope and yellow/red at the top is near-constant. (Occasionally the neighborhood gets inundated and everything goes green, but this never lasts long. By the way, that's one of the crappiest times to use the bicycles because there's nowhere to dock them. You end up going way out of your way and/or paying the fee for going over the time limit.)

If Citi Bike were to expand the stations in Park Slope, more bikes could fit in the lower part of the neighborhood, but within a day or two they would be full again and the ones at the top of the slope would be empty. It takes constant work to keep the stations in balance. It's not clear that increasing the number of bikes or docks would help much. The key problem is moving the bicycles each day. (With large enough stations maybe you could ensure that stations never run out of bicycles, but it would still take a lot of effort keeping them balanced.)

I don't have much of a point here, except to note that if Citi Bike were to expand its stations, it should expand them in "tide" areas more than in "river" areas. Station size is clearly the limiting factor in lower Manhattan, whereas in neighborhoods like Park Slope the key thing is simply to move the bikes uphill, against the current.

Expand Citi Bike Now

I continue to free ride on the boundless optimism of tech investors as I cash in on the Citi Bike Angel program. Those gullible capitalists will soon be buying me a coveted white Citi Bike key—which I will get completely gratis when I hit 500 angel points! This is obviously unsustainable, but I intend to take advantage to the hilt while the party lasts. By the time they sober up, the coveted white Citi Bike key will be in my pocket, and I'm not giving it back.

Anyway as a result of my lucrative Citi Bike Angel activities, I've noticed that quite frequently docking stations are completely full or completely empty. This makes them unusable for people who want to drop bikes off or pick bikes up, respectively. Here's an example of what I mean, from late this morning (this is a very typical pattern for a day like today):


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The stations that are entirely green are completely full, the stations that are red are completely empty. Yellow means that a station has 1-3 bikes. (3 bikes is represented by either yellow or green depending on the station, I think.) The pattern here is obvious: Chinatown and the Lower East Side are net exporters of bikes on a weekday morning like this, while the financial district and Tribeca are big net importers. This almost certainly reflects commuting patterns (although bear in mind, the bikes from the LES didn't necessarily go to the financial district and vice versa). No idea what's going on with DUMBO, I've never paid much attention to the stations there.

(By the way, those numbers you see on the stations reflect Angel points ripe for the taking. If you take from a station with a white number on a black background, and drop off at a station with a black number on a white background, you get the sum of the points indicated. You can also pick up or drop off at a neutral station for a smaller point gain. This is what I mean when I say that my lifestyle is financed by the naïve optimism of the investing class—look at all those opportunities to earn 2 or even 4 points in a single trip! And as a reminder, it takes only 500 points to go from the ordinary, undistinguished blue Citi Bike key to the coveted white Citi Bike key.)

Anyway the important thing to note here is that there is almost certainly a lot of unsatisfied demand for both bikes and docks. It's unlikely that everyone on the LES who wanted a bike this morning got one, and it's unlikely that everyone who wanted to dock a bike in the financial district was able to do so. People are having to walk quite a distance to find the nearest bike (or walk quite a distance from the dock to work), and presumably a lot of people who would like to use Citi Bike to commute are unable to do so and are using other transit modes. (Also, anecdotally, when I'm chasing Angel points I often see someone immediately take a bike I just dropped off, or immediately use a dock I just freed up. So in my observation there is definitely unmet demand for those things.)

This is a failure! It's always going to be the case that bikes are relatively numerous in the financial district on weekdays after the commute, and likewise for docks in places like the LES, but if the stations were doubled or tripled in size you would observe a lot fewer stations that were completely full or completely empty. Or if you didn't... it would mean (in rough terms) that 3 times as many people were commuting by bike, which would be great in itself.

The only cost (aside from the docks and bikes themselves, which I assume are not expensive) would be some parking spaces. But bikes are vastly more efficient than cars in terms of the parking space required. The space taken by a single car could easily provide parking space for 8-10 bikes. So trading away those parking spaces should be a big net improvement for mobility in the city, even putting aside the vastly better affordability of Citi Bike. (You could also expand parking for private bicycles, but I think Citi Bike is a superior option for most people and I would favor it over racks for private bikes. But with sufficient political will you could have plenty of room for both.)

Biking is healthy, it's affordable, and it causes far less air pollution and congestion than car travel. The city would reap large benefits by allowing Citi Bike to double or triple the size of stations in high traffic areas.