NY Mayor Bill de Blasio’s Democrat supporters have set their sights on tougher rent control laws, the WSJ reports:
[T]he proposed regulations, crucial to Mr. de Blasio’s housing agenda, face uncertainty in Albany, with one week remaining in this year’s legislative session.
The powerful New York City real-estate industry, which is aligned with the state Senate’s Republican majority, opposes many of the regulations, saying they don’t help tenants or landlords. Many lawmakers simply want to leave Albany without upsetting the status quo this year after a tumultuous few months marred by two corruption arrests.
Real-estate executives, city officials and state lawmakers say little has been decided, and that it is likely the current rent regulations, set to expire this year, will be extended at least for a limited period.
Rent control was one of the worst ideas of postwar New York City, where over the decades it led to the decay of whole neighborhoods in the greater NYC area. One million housing units are still under rent control, but a gradual easing of the system in recent decades has been a major contributor to the long boom that has transformed New York, and made it a much safer and more prosperous place. Now, deep Blue Democrats who back de Blasio want to turn back the clock.
To do that, Gotham has to persuade lawmakers in Albany to go along. That means that one of the country’s most corrupt and ineffective legislative assemblies has to rule on whether to strengthen rent controls, or to accelerate their decline and extend the current system of deregulation. Mayor de Blasio wants to strengthen the controls; but smart money is betting that the legislature, which has no particular love of de Blasio, would rather kick the can down the road and extend the current system. What will be interesting is how Governor Cuomo responds. Cuomo is on the hot seat: he’s a man with national ambitions who can’t just pander to the quack economics of the public sector unions and their hard left allies—but on the other hand he would prefer not to diss them completely.
This is the question Democrats nationally are confronting in the waning years of the Obama era. How do they balance the agenda of the true blue segment of their party against the demands of a national electorate? It’s a complicated question, involving racial voting blocs, troublesome relations with public-sector unions, and above all the declining capacity of urban economies to pay all the bills that blue Democrats want them to pay. America’s cities (and some of its inner suburbs) are increasingly going to need federal and state bailouts, largely due to spiraling pension costs but also thanks to slow growth and rising public demand for new government programs and services.
This is going to be a big problem nationwide, and we are already seeing a trend in which urban areas are shifting left while states are shifting right. Michigan doesn’t want to bail out Detroit, and Illinois doesn’t want to bail out Chicago. The anger of urban voters is very real and, given the conditions under which they are living, justified. In spite of high taxes, city services like education are mostly of poor quality and, thanks in part to those taxes and gentry liberal regulations, prices are high and job creation often slow. But without the weakening of public sector unions and massive urban reform that lefty Dems will fight to the last ditch, these problems can’t be solved. They can only be papered over by large transfers of cash—transfers that voters from other jurisdictions simply don’t want to make.
Cuomo and de Blasio actually have it easier than some of the other uneasy pairings of big city mayors and state governors. New York City has been the principal beneficiary of both federal stimulus and the easy money policy of the Federal Reserve system, and so is conspicuously better off than most other big cities. But this is a precarious prosperity, and it is largely dependent on the kind of Wall Street super profits that lefty progressive Democrats rail against.
The missing link is a credible program of urban and state governance reform that could bring down both the direct costs of government (taxes) and the indirect ones (regulations, inefficient bureaucracy, crony subsidies) so that the country’s great cities could generate the wealth they need to provide the services their residents seek. To get closer to blue goals, in other words, one must eschew blue policy.
That’s not a popular view among Democrats today; until it is, the party of Jefferson and Jackson (which neither man would recognize today) will struggle with dilemmas that it cannot resolve.