Reforming rent control in New York City: Analysis of housing expenditures and market rentals

The complete analysis may be found in Ira S. Lowry, Joseph S. De Salvo, and Barbara M. Woodfill,Rental Housing in New York City. II:The Demand for Shelter, R-649-NYC (The New York City Rand Institute, June, 1971).

See U.S. Bureau of the Census, “New York City Housing and Vacancy Survey, Sample Design and Estimation Procedure,” public release dated August 20, 1965; reproduced in Paul L. Niebanck,Rent Control and the Rental Housing Market in New York City, 1968, Department of Rent and Housing Maintenance (January, 1970). When we refer subsequently to weighting, it will be understood we are using the census weights, supplied for sample households.

Strictly speaking, we should present standard errors offorecast, but, for our large sample sizes, this quantity, which is not a constant but increases for values of the independent variables farther from their means, is approximately equal to the standard error of estimate.

These households lived in controlled housing for which they paid cash rent. We chose only those records for which household income, household size, the age, sex, and ethnic background of the head of the household, and the household's gross rent expenditures were reported. We included cases in which contract rent was reported but utility payments were not; as explained above, we estimated utility payments for these cases. The records selected represented 708,000 households, about 57 per cent of all households paying cash rent for controlled-housing units. In nearly all cases, the records rejected lacked only data on income or age of head, items on which response was poor.

For incomes under $6,000, this interpretation is clouded by the fact that about 30 per cent of these households are welfare recipients whose budget allocation between housing and other goods is determined by the Department of Social Services.

These two items were reported for about 97 per cent of all households paying cash rent for controlled units; we allocated the remaining 3 per cent among our eight household groups.

About 92 per cent of these households reported gross rent, and virtually all reported contract rent; for those reporting contract rent but not gross rent, we estimated utility expenditures to derive their gross rents. See above.

This figure includes “Conversions and Class B” structures, whose vintage, while pre-1947, is not more exactly determinable.

For only one type and age of structure is the coefficient anomalous. The highest premium ($97) is associated with units in multiple dwellings built between 1930 and 1946, more than twice the premium associated with post-1960 buildings ($42). Our sample contained 31 units in buildings of 1930–1946 vintage, almost all of which were located in large structures in Manhattan. The apartments are large and the buildings are in sound condition; they were obviously decontrolled under the provision of the 1964 amendment that allowed decontrol for apartments whose rents were greater than $250 per month. Their tenants in 1968 were white, with middle-to-high incomes. This seems to be a case in which older buildings are simply better designed and more solidly constructed than newer ones.

See Lowry, DeSalvo, and Woodfill,op. cit.,Rental Housing in New York City. II:The Demand for Shelter, R-649-NYC (The New York City Rand Institute, June, 1971), for a complete discussion of this point.

Alternative methods of expanding the sample data yield slightly different results. Our best estimate of annual gross rent expenditures in 1968 by tenants of controlled housing is $1,408 million. See above.