Cyndi Lauper, 1980s pop-music icon, and her husband, the actor David Thornton, will enjoy their West End Avenue apartment at the cut-rate, rent-stabilized price of $989 per month, even though the state Court of Appeals last week rebuffed the couple's attempt to slash that figure even more. So New Yorkers can sleep easy in their (excessively expensive) bedrooms tonight, knowing that the truly needy are getting affordable housing.
The complexity of the case in question itself should raise doubts about the wisdom of rent regulations. According to the recap of the case included in the court's ruling, the Thorntons sublet the four-bedroom apartment on West End Avenue by signing a contract saying it would not be their "primary residence," a deal they arranged with one Shlomo Baron, who himself leased the apartment from the building's owner under the condition that he wouldn't live in it full-time, either. The false statements that the unit would be a second home were, the court's recap said, part of an effort by the landlord to skirt the rent-stabilization rules that governed the building, since there's an exception in the rule for second homes.
Reading the court's account, it's easy to see how everyone would be a winner from this somewhat less-than-honest arrangement, sort of. The landlord would get higher rent, the primary leaseholder would make a profit from the sublet, and the wealthy subtenants would get a tony place to live in Manhattan's crowded real estate market. No wonder they were all willing participants in the fiction that the unit would not be a primary residence.
In the court's telling, however, the Thorntons eventually caught on to the fact that the apartment for which they agreed in 1992 to pay $3,250 per month (ultimately increasing to $3,750) had been rent stabilized not long before they moved in. In 1996, they launched a lawsuit to bring their pad back under rent stabilization. But only in 2000 did they discover that the rent before they moved in had been just $500 and change. By that time, the court notes, the building owners had given up on the attempt to circumvent rent stabilization, but argued that, due to a complicated set of circumstances involving a four-year statute of limitations in the rent laws, the new rate should be closer to $1,000. The court sided yesterday with the building's owners, so the Thorntons will stay in their apartment at the cut rate of $989, instead of the cut-cut rate of $500.
Which is a defeat for anyone who thinks that setting the rent on an apartment shouldn't involve nine years of litigation, protracted triangular feuding between three parties, and a 12-page court ruling that serves as yet another reminder of the absurdity of rent regulation. According to the 2002 Housing Vacancy Survey, there are 2 million renter-occupied units in the city. Of those, almost 60,000 are rent-controlled, and nearly a million are rent-stabilized.
Rent regulation is an albatross hanging around the neck of the city's housing market, as Manhattan Institute senior fellow Peter Salins noted in a 2004 report on the housing shortage. Mr. Salins wrote that "this regulatory dinosaur continues to distort the city's housing market. It makes housing for all but its already-vested beneficiaries scarcer and more expensive, mainly to the detriment of the same New Yorkers - immigrants and moderate-income households - who are also disadvantaged by the other regulatory contributors to the housing gap." Ms. Lauper and the lucky few can enjoy stabilization on their apartments "time after time," but the rest of New Yorkers just want to have access to ample market-rate housing.