Bush-Spitzer Condominium

Here's an issue on which the Bush administration and the Spitzer administration are, regrettably, on the same page — the effort to block free-market housing in Brooklyn. The owners of Starrett City, an apartment complex of nearly 6,000 units in the East New York, want to sell their property to Clipper Equity LLC, for $1.3 billion. Governor Spitzer's housing commissioner, Deborah Van Amerongen, was remarkably forthright, telling the Associated Press on Saturday that her office is blocking the deal because the buyer wants "to implement a market rate rent for all the units." President Bush's housing secretary, Alphonso Jackson, appeared side by side last month with Senator Schumer, Attorney General Cuomo, and Rep. Ed Towns, to announce that, "The tenants don't want this transaction. It would be the worst kind of theft to steal all of this from them."

The idea that it qualifies as "theft" for the owner of a property to charge a market rate to his tenants is a strange one coming from a Republican administration. The real "theft" here is of the property of the owners. And the real problem here isn't only philosophical, it's practical. While New York might have once been such an undesirable place that the government had to subsidize people to live here and build housing here, now it is such an attractive place that real estate investors think that they can make money in neighborhoods like East New York without a subsidy. When government officials stand in the way of those investors, they keep New York in a 1970s-era suspended animation. Owners have little incentive to upgrade their properties, and tenants have little incentive to move out of low-rent apartments, even if they would, in a non-subsidized world, buy a house in Queens or retire to Florida.

Defenders of government intervention in this case argue that subsidies received in the past by the owners of Starrett City impose some sort of obligation to preserve "affordable" housing there. But it isn't clear to us that the taxpayers of New York, who work hard for the money Messrs. Spitzer and Schumer take from their wallets, have any such obligation. In any event, the broader cause of a housing market in the city that functions to meet the demand is better served by private enterprise than by attempts at rent-regulation and subsidies that have so distorted incentives to the point where New York is now more than half a century into its post World War II housing "emergency." The rights of individual tenants are more than adequately protected by New York's rent-control and rent-stabilization laws, as any landlord who has ever spent years trying to buy out or evict such a tenant could attest. There is no need for the Bush-Spitzer politburo to intervene to stop this proposed sale, which, rather than being something to fear, is something to embrace as a sign of the city's vitality and success.