The Streets Were Paved with Gold - Ken Auletta [29]
At swank 1085 Park Avenue, an eight-room rent-controlled apartment goes for $640 a month. A six-room apartment rents for $473. At 40 Central Park South, where room service is provided by the St. Moritz Hotel and sleek Rolls-Royces parade in front of the long white canopy, 44 of the 143 apartments are rent-controlled. Ms. Carol Hausamen, the owner, says that if those who could afford it paid a fair rent, the building’s $4.6 million assessment would rise 10 percent. A means test, she guesses, would remove 90 percent of these tenants from rent-control privileges. But the only way to get them off, she jokes, is to “shoot ’em. They go out feet first.”
A lot of shooting would be required to remove all the comfortable people enjoying rent-control privileges in buildings along Central Park West and South, up and down West End Avenue and Riverside Drive, up the East Side, down lower Fifth and upper Park avenues, and across the river in Brooklyn Heights. According to Frank Kristof, vice president of the state Urban Development Corporation and a student of rent control, approximately 15 percent of the current 500,000 rent-control families could afford to pay more. That’s 75,000 families. Daniel Joy, a supporter of rent control and the city’s Commissioner of Rent and Housing Maintenance, agreed: “Whether it’s 14 or 15 percent, that’s the ball park.”
The citizens of New York City pay for rent control. If rich men like Nat Sherman were not in rent-controlled apartments, perhaps more upwardly mobile black families would live on Central Park West rather than move to Scarsdale. In 1975, 1.7 million of the city’s 2.1 million rental units were subjected to some form of rent regulation (either rent control or what is called rent stabilization). If there were a means test and those in controlled apartments paid a fair rent, the Temporary Commission on City Finances concluded after long study, city real-estate tax coffers would be enriched by $100 million per year. The federal General Accounting Office has said the figure would be twice that. The Commission also calculated that since the inception of rent control landlords have subsidized tenants to the tune of $20 billion. Small wonder that landlords, who felt they were not getting a return on their investment, often abandoned their buildings, removing them from the tax rolls. Between 1960 and 1976, 300,000 housing units were abandoned. And, currently, real-estate tax delinquencies reach almost $1 billion. According to Congressional testimony by Koch’s Housing Commissioner, Nathan Leventhal, “Only 12 percent of the buildings in arrears showed up on the rent control rosters.” Nevertheless, with rent control a persistent local issue—over the years, city candidates charged their opponents with being soft on landlords as national candidates charged theirs with being soft on communism—it is not surprising that the climate was deemed unsuitable for private housing construction. And the public pays, since financially pressed landlords often cut back on building maintenance, giving many middle-income residents another excuse to leave New York.
The issue of rent control received little attention in the 1977 mayoral campaign. Each of the candidates was too busy promising to forge a new, pro-business climate. The candidates never made the connection between this stance and their sworn opposition to even a means test for rent control. Certainly, Mayor Ed Koch never understood the contradiction. Like many legislators and judges who pass on rent legislation, this foe of special privilege knew a good thing when he didn’t have to pay for it. “I’m not going to let it go,” he declared a month before he was sworn in as mayor. The “it” was his cheap apartment, which he promised to keep while living in his official