Manhattan Madness

In the nation's biggest city, the only thing higher than the buildings is the cost of renting a few square feet of space in them. When leases expire these days on apartments not subject to rent controls, landlords throughout New York City are demanding rent increases averaging 26.5%. In Manhattan, rents have been rising an average of 31%, and "horror case" increases of 60% are not unheard of. On top of the boosts, many leases now provide for "automatic" raises of 5% or more a year and further hikes whenever real estate taxes rise. Some landlords offer only two-year leases instead of the standard three-year contracts.

Landlords often announce a raise just before the lease expires--and the tenant can take it or leave it. Many middle-income people are forced out just as surely as if they had been evicted, and it does not take long to find a new tenant in what is very much a landlords' market. Desperately seeking living space, Manhattanites generally settle for less space than they need at more rent than they can comfortably pay. Quite a few have fled to the suburbs.

Raising the Roof. Damning the situation as "unfair and in many cases outrageous," Mayor John Lindsay has demanded a rollback of the "exorbitant" rent increases and a freeze on further boosts until March 1. By then, he warns, the city's landlords had better produce a formula for self-regulation against gouging or they will face legislated controls. The owners are expected to come through with some sort of plan--and for good reason. With an election due in the autumn, Democrats on the city council are threatening the landlords with a number of politically popular bills, including one that would impose rent controls on all buildings, and another that would force rents back to the 1967 level.

The landlords have lately raised the roof on rents in part to make up for lost time and money. Six years ago, in a scramble to beat a zoning-law deadline, they built an excess of apartments and filled them by offering rents that were fairly reasonable by Manhattan standards, as well as three-or four-month rental "concessions." Now there is a desperate housing shortage. While the rental vacancy rate for the nation is 5.4%, it is 1.2% for New York City. The landlords, hardly a charitable lot, can get together fairly easily and exploit the shortage because 250 real estate firms own 80% of the city's 600,000 noncontrolled apartments.

Low Ceiling. The problem is aggravated by rent control. Alone among U.S. cities, New York has clung to wartime controls, which even today set artificially low ceilings, averaging $22.50 a room, on two-thirds of the city's 2,100,000 rental apartments. Like all price controls, rent ceilings have inflated demands and shriveled supply. Older couples hang on to bargain-rent apartments, which are often larger than they need, after their children have grown up and left home. Private builders, contending that they cannot build cheaply enough to compete with the controlled apartments, have practically stopped putting up middle-income housing.

What is the solution? Experts agree that it would probably be a mistake to extend rent control. That would damage any prospect of more construction, which is the only long-term solution. The Lindsay administration has promised to restudy zoning laws in order to help prod new building. For now, the greedier landlords would do well to heed pleas by some reasonable real estate men for voluntary limits on rent increases--perhaps 15% on a two-year lease.

This file is automatically generated by a robot program, so reader's discretion is required.