The Streets Were Paved with Gold - Ken Auletta [30]
Privately, many politicians concede that rent control protects some people who need no protection. Publicly, most perform like seals, squeaking their undying devotion to tenants. Since there are more tenants than landlords—75 percent of city residents are renters—it’s a politically safe pose. Which explains why all the studies urging reform remain parked on shelves in the municipal library.
New York is different, says Commissioner Joy, because “75 percent of our population are renters.” In Detroit and Philadelphia, only 40 percent are renters; in Houston, 47 percent. New York is different, says Kristoff, thinking of rent control and subsidized middle-income housing, because “There’s an unbelievable psychology that you find nowhere else. Tenants here believe they have a right to be protected against high rents.” It’s a problem shared, for instance, with Washington, D.C., where they also have controls.
In fact, much of the city’s population cannot afford to pay an economic rent. The median income of rent-controlled tenants, says Leventhal, was $7,057 in 1974; in 1975, half the controlled “female-headed households” paid 36 percent of their income for rent, while the majority of senior citizen households paid more than 40 percent. Rent control is not just “metaphysical,” as Sternlieb said, but may well be an insoluble problem. Most tenants simply cannot afford to pay the rent landlords need to cover costs or earn a profit. Thus smaller landlords frequently reduced services, failed to make building improvements, abandoned their buildings or refused to invest in new housing. The logical solution: a subsidy program to pay the difference between what the tenant can afford and the landlord needs. The question: Who should pay? The city can’t afford it. Nor can the state. The federal government, which has a small Section 8 subsidy program under the Housing and Urban Development agency, is not likely to institute a massive new program. A means test for those living in rent-controlled apartments would help. But even if it removed 20 percent of the tenants from controls, the poorer landlord’s problem would remain unsolved since most of these tenants live in the larger buildings of wealthier landlords. Solving one problem would create another, since the absence of controls would, no doubt, prompt desperately needed middle- and upper-income residents to flee the city. The city is damned if it does, damned if it doesn’t.
In the absence of government subsidies, it’s unfair but probably unavoidable that landlords will be stuck with the subsidy. In the short run, they pay. In the long run, the city will continue to pay dearly for politicized housing decisions.
The Introduction of Collective Bargaining
What came to be known as the “Little Wagner Act” was in fact the Big Wagner Act for municipal labor unions. On March 31, 1958, Mayor Robert F. Wagner signed an executive order granting 100,000 employees the right to join the union of their choice and to bargain collectively, which implied the right to strike. In retrospect, one would think this an easy decision.
It was not. The Mayor’s advisers were strongly divided. One group argued that unions were just another special interest and that granting them too much power would whet their appetites, encourage inflated settlements and give unions too much sway over elected officials; the opposition countered that collective bargaining would impose an orderly machinery for the settlement of disputes, bring stability, promote efficiency, do justice to workers. As was his custom, Wagner agonized quietly, exhausting everyone. When he finally decided to sign the order, political considerations played a part. As would become the case in subsequent negotiations, the Mayor did not want to give up too much immediate money so he gave up something else. “… the Mayor’s decision to act now was influenced by a desire to conciliate major union groups on the eve of the publication of the executive budget,” wrote Abe Raskin, the respected labor reporter, on the front page of the Times.