
Taxi Medallions: New York's taxi system makes fares higher and drivers poorer - gruseom
http://www.slate.com/articles/business/moneybox/2012/06/taxi_medallions_how_new_york_s_terrible_taxi_system_makes_fares_higher_and_drivers_poorer_.html
======
arjunnarayan
What I don't understand is if the government is going to go to the trouble of
creating a giant class of rent-seeking assets, why does it then sell them out
permanently? If, for some reason, the government wanted to limit the market to
just X cabs, it should auction out X medallions annually, and thereby accrue
the producer surplus as rent, instead of the rent accruing to the medallion
owners.

Obviously, I believe that there shouldn't be a limit without an obviously
proven tragedy-of-the-commons scenario (which in this case is unclear if it
even exists). But if it does, it's better for the government to accrue the
rent.

Ugh. I can't wait for the Google cars to gut this entire industry to pieces.

~~~
WiseWeasel
Then what's to stop entities from outbidding everyone, buying up all the
medallions every year and leasing them out?

What needs to happen is for passenger interests to be given weight. One way to
do that might be to have the cities offer some short-term licenses for single
shifts on a spot market, and some long-term (maybe quarterly or yearly)
licenses with a fee inversely related to the driver's score over the last
period (determined by average rating by his fares, and/or relative average tip
amount for the route).

Applicants for long-term licenses with good ratings and relatively high tips
for their routes for the previous period would get cheap licenses, those with
poor scores would get more expensive licenses, and those without a track
record or filed for the benefit of non-drivers would get exorbitant fees.

This would have the secondary benefit for municipalities of drivers being
incentivized to declare their tips.

~~~
jacobolus
It strikes me that only allowing individual drivers to buy the medallions
might help with this problem. I.e. only allow a person who had bought the
thing directly from the government to use it for driving a cab. Then the
drivers could take out loans from someone to purchase a medallion, but that
loan would be on the same terms as anyone else.

~~~
monkeypizza
Why do you need medallions at all? The drivers already have licenses - just
make the background check part of getting a license, and just charge 100$ for
a license. Let as many people be taxi drivers as want to be.

We don't worry about reducing work to a living wage in any other field - we
allow free entry into carpentry, construction, business & don't require them
to buy medallions before starting to work.

It's a general problem of resource allocation - just like cancer. Some group
or cell identifies a resource and starts diverting or blocking it for their
own benefit, and this increased power/energy is enough to protect the problem
from unmotivated defenders.

~~~
planetguy
Or if you wanna keep the supply artificially low somehow, and provide some
sort of barrier for entry, do like London does and require prospective drivers
to pass a ridiculously stringent test of their understanding of local
geography (The Knowledge). From wikipedia:

 _"It is the world's most demanding training course for taxicab-drivers, and
applicants will usually need at least twelve 'appearances' (attempts at the
final test), after preparation averaging 34 months, to pass the examination"_

 _"In all some 25,000 streets within a six mile radius of Charing Cross are
covered along with the major arterial routes through the rest of London....
The Knowledge includes such details as the order of theatres on Shaftesbury
Avenue, or the names and order of the side streets and traffic signals passed
on a route."_

Overkill in the era of GPS? Probably. But pretty cool.

~~~
smsm42
Not for the customers who will be paying artificially inflated prices and not
for the aspiring drivers who have to pass ridiculous three-year hazing
ceremony in order to be able to earn a honest living. Of course, once they
passed, they have an incentive to make the others suffer as badly as they did.

~~~
planetguy
Yeah, the flipside of this is that taxis in London are ridiculously expensive
and anyone except tourists, the very rich and the very desperate will just
wind up hiring a Minicab, which means getting into a filthy wreck of a car
with a random stranger who inevitably looks like a rapist, which is precisely
what taxi licencing schemes are designed to avoid in the first place.

------
robomartin
I'm sorry, but this is yet another example of what happens when governments
stick their paws into the economy. They interrupt the natural forces of a free
market and everyone suffers for it. Nothing good ever comes out of their
actions. What's worst, the laws they pass never have a sensible termination
date or a built-in mechanism for sensible adaptation to changes.

The more fundamental question here is: Why does the government have the right
to regulate and interfere with taxi services in this fashion? Imagine if you
had to own a "medallion" to do whatever it is you do. And, imagine that the
government tightly controlled these. Imagine that you have to lease medallions
just to be able to work.

If you are in any tech related field your reaction is probably one of disgust.
Virtually none of the innovation we have had over the last several decades
would exist today. It would be nearly impossible for truly competitive forces
to develop. Nothing would be the same.

Well, that's exactly what your government and, to be fair, the way some of you
are voting, is doing to our country.

Do us all a favor: Stop voting as a tribe and start voting as individuals with
brains. If we don't devolve out of our current path and evolve into a strong
free-market, low taxes, low government, pro-business, low entitlement society
you will live to see this country destroy itself from the inside out. Then
what?

Use your brains.

~~~
underwater
"Why does the government have the right to regulate and interfere with taxi
services in this fashion." Because taxis couldn't exist without the roadways
which is paid for by public funds. A completely unregulated system would mean
we end up with a bunch of gypsy cabs could rob riders, overcharge, refuse
fares and clog the roads.

Government involvement doesn't necessarily make something a bad idea. In this
case the implementation obviously leaves a lot to be desired.

~~~
glenra
Overcharging and refusing fares is what we get _now_ in the regulated system.
In practice, "gypsy cabs" often serve neighborhoods where the regulated cabs
don't bother to go.

Regarding "rob riders", direct robbery is still illegal - you don't need
industry-based regulation to accomplish that end. But if by "rob" you really
mean "cheat", the market has evolved multiple mechanisms to make fares
transparent. One of these is the "zone card", where the price of the trip
depends on how many zones away your destination is from your source. Where
jitney traffic is legal, the zone map and price list could even be printed in
a sticker on the door so you can see the expected fare before you get in.

Regarding "clog the roads", a functioning jitney system makes it much less
necessary for people to own personal cars. (and as a non-car-owning
manhattanite, I'd love for the roads to be "clogged" with cabs if that meant I
could reliably _find_ one to go to Brooklyn or Queens). (And again, major
roads like 42nd street "clogged" with cabs is something the current system
produces in spades.)

------
juxta
I find this line pretty interest: "Because Murstein's company owns a bank,
it’s able to take advantage of the Fed’s low interest rates to borrow money
for 0.35 percent and loan it out to striving young cabbies who want to own a
medallion. The cabbie borrows at around 5.5 percent, with 25 percent down.

“If a borrower doesn’t pay, we send out somebody,” Murstein said. “Literally,
they can pop the medallion off the hood of the car and bring it back to our
office and, bingo, the guy is out of work.” "

He basically has no risk on his end. Looks like he found a pot of gold!

~~~
MichaelGG
If it's really so risk-free, then others would provide competition with lower
rates, less down, payment-free period, etc.

~~~
smsm42
For that, they have first to get a supply of medallions. And current owners
won't sell them unless they are given some serious money to replace that
5.5%-0.35% income stream. One of the reasons why the price of medallions
skyrockets.

Of course, I imagine it's not completely risk-free. It is a strictly regulated
business. Which means you need a lot of friends in key places - otherwise
somebody who does have a lot of friends would put you out of the lucrative
business and take it for himself.

And there's some measure of competition - 5.5% is not a super-high for a loan
with a collateral. Higher than mortgage rates but substantially lower than
unsecured loan rates. About 1% over common HELOC rates and about the same as
home equity loan rates. Of course, repossessing a home is much harder than
repossessing a medallion, so probably medallion business is better, but the
rate is not totally outrageous compared to similar loans.

------
protomyth
Is there somewhere where a government created scarcity of licenses actually
works? The only things I can think of is resource specific activities (e.g.
hunting licenses).

~~~
crazygringo
Well it makes sense to limit the number of NYC cabs -- except for the hour of
handoff (~5pm) and in particular neighborhoods at night (Theater District,
Greenwich Village, etc.), the number of cabs seems pretty good.

If _anyone_ could drive a cab, the profession might only barely pay a living
wage, as each driver would get less passengers, and you'd get a race to the
bottom -- and the streets would be more congested too.

To me, the biggest question with taxis is scheduling and demand -- how to get
extra cabs to the places/times people need to take cabs from, and the fact
that this isn't really compatible with people who want to drive a cab on a
predictable block schedule.

~~~
rg
"If anyone could drive a cab, the profession might only barely pay a living
wage, ..."

That isn't the case in London, widely thought to have the best taxi service in
the world. There, anyone can pass a demanding standard examination and having
done so can drive a cab. Anyone can build a vehicle that meets a standard
inspection, and once passed that vehicle can be used as a cab. No limit on the
number of drivers, no limit on the number of taxis, both inspected but not
limited. The result is that different drivers work different convenient hours,
some full time and some part time, with larger numbers of cabs available at
rush hours and other times of heavy demand. All the drivers know how to drive
well, all the taxis are clean and in perfect shape, and there's always one
available when you need it. This is what makes it truly possible to live
better in central London without a car than with one.

All the schemes to forbid more competitors simply hand profits to taxi
operators and produce poor service for taxi users. As usual, government
regulations are captured by the regulated industry to exclude competitors.

~~~
gruseom
_a demanding standard examination_

This test is legendary. There was an interesting study done on the brains of
the drivers who pass it:

[http://blogs.discovermagazine.com/notrocketscience/2011/12/0...](http://blogs.discovermagazine.com/notrocketscience/2011/12/08/acquiring-
the-knowledge-changes-the-brains-of-london-cab-drivers/)

~~~
andyjsong
I wonder if GPS has downplayed the role of having to memorize the streets of
London.

~~~
1123581321
Good question. It has not changed because of that. Drivers are supposed to be
able to immediately choose routes without consulting any kind of map.

~~~
ams6110
I would think that the experienced human driver will outperform GPS when it
comes to selecting optimal routes and alternates at various times of day,
dependent on moment-by-moment assessment of traffic conditions. That's just a
gut feeling, no cite to back it up.

------
juan_juarez
New Mexico does the same thing with liquor licences. The worst part is that
the state's biggest liquor distributor now owns the vast majority of the
licenses. "You have to buy all your shit from me AND give me a percentage of
your profits" - sounds like the mafia but it's every day business in NM.

~~~
refurb
That's actually a by-product of prohibition. When they reversed prohibition, a
regulation was put into place that the manufacturer, distributor and seller of
alcoholic beverages all had to be separate (not owned by the same company or
individual).

The gov't decided to step in and do all three after prohibition and it's been
a VERY slow move back into the private model since then.

------
user49598
Seems like a lot of people here are complaining about the system without
giving much thought to it's actual effects.

There are a metric shit-tonne of cabs in NYC. We don't need more. Maybe we
need regulation on how they have to be spread out, but we certainly do not
need more. Also, compared to other US cities, cabs here are very reasonably
priced. Also, they all take credit cards, have touch screens, and the new ones
have outlets to charge your electronics.

It may be a bit corrupt, but it really is a good system for the consumer. And
it's all completely standardized across the board. Your cab has to be up to
code or it gets taken off the street.

This isn't corruption running wild. The Taxi system in NYC is very functional.
None of the problems described in the article are solved by simply abolishing
the medallion system. It would take intense regulation, with or without
medallions, to make a lot of those things better.

Edit: What we really need to focus on is the MTA. Now theres a system rife
with corruption and misspending that actually greatly effects consumers
negatively.

------
alister
Perhaps it's not worth mentioning, but it's not the first time I've seen a
reporter made this same kind of math "error" because it helped make his case:

> taxi drivers have asked for a 20 percent hike in fares. How much would the
> MTBT like to increase lease rates? Why, it thinks 20 percent is only fair.

The author leaves the false impression that the poor drivers won't make any
more money at all -- that all the extra revenue will be grabbed by the
medallion owners. But if previously the driver made $100 a day and paid $50
for the lease, then after the fare increase he'll make $120 a day (assuming
demand doesn't fall) and pay $60 for the lease. So his profit goes from $50 to
$60.

------
cynicalkane
One thing that's usually missing in discussions of New York taxi medallions is
how congested the city is and how many of the vehicles on the street
(especially in Manhattan) at any given time are taxis. Once a certain point is
reached, adding taxis will increase the travel times of taxigoers.

There's been economic analyses of this. I don't recall too many details about
the optimal number of taxis (it's probably higher than the current number),
nor are taxi medallions a particularly effective way of regulating congestion,
but surely bald deregulation is not optimal.

~~~
glenra
> surely bald deregulation is not optimal.

"optimal" is not one of our options. The relevant question is whether "bald
deregulation" is _better_ than what we've got now, and the answer to that is
pretty obviously YES.

Sadly, "bald deregulation" is also not one of our options, but at least it's
more likely than achieving something anywhere near "optimal".

------
citricsquid
If the medallions are fixed to the hood of the cab what is to prevent the
medallion from being stolen? Do the medallions _represent_ permission and can
be replaced easily? The option to "buy" them is making me question my
assumption, are people in fact buying what they represent?

~~~
larrys
The physical object is not what matters. Same thing that prevents someone from
stealing a license plate or counterfeiting one or putting a bogus health
inspection cert in their restaurant window. Obviously if you were to affix a
medallion (or license) to a vehicle at some point that would be discovered and
you would be in hot water. Obviously.

You are not buying the medallion. You are buying the right to operate a taxi.
The medallion is just an easy way for a) riders and b) enforcement to at least
attempt to judge who is legit and who isn't.

And as the financial people noted they can remove the medallion if someone is
in default. If all you had was a number painted on the side of a taxi that
wouldn't work the same (someone could say "oops" and still pickup fares.)

------
nchuhoai
I think we should seriously rethink regulation within the cab market. Yes, we
need to ensure some sort of standards for security reasons, but shouldn't the
cab market be prime for the traditional free market theories?

I don't get this whole licensing deal, fixed tariffs and medallion system

------
droithomme
It seems like the basic design problem is that one driver can only work 8 hrs
a day but the medallions are valid 24 hours a day. This means that one driver
can never bid himself for their worth unless he intends to hire two others to
work in tandem with him. And if he is doing that, why not hire three drivers
and just become a passive income generating medallion owner? And so that is
what happens.

------
alister
> All that began to change in 1979. That year, New York’s Taxi and Limousine
> Commission changed its rules to allow medallions to be leased out for
> 12-hour shifts.

The implication here is that the transferability of the medallions caused this
big mess. We need a discussion of why medallions--which he says started simply
as licenses--are being limited. This is the obvious question that is not
addressed. After all, normal drivers' licenses and normal cars are not limited
by the government in US.

~~~
untog
_We need a discussion of why medallions--which he says started simply as
licenses--are being limited._

Manhattan's streets already heave with traffic. Allowing unlimited cabs would
make that worse, and there's no free market trigger that would solve the
problem.

------
ajays
I have always wondered about this. In San Francisco (aka "The City"), a driver
typically pays $200+ for a 12-hour shift on weekends. Then they go around in a
mad dash, trying to pick up as many lucrative passengers as possible;
sometimes resulting in deaths[1]

There are 2 rent-seekers in this system. One is the City, which uses these
taxis as a revenue stream. Why? We are all paying taxes anyways; why should we
pay the City for the privilege to ride a car? And then there's the medallion
owners. In the old days, the politically connected got these medallions for
peanuts, and are just sitting on them, collecting rent (corruption, anyone?).
And surrounding this system is a parasitic bureaucracy for "managing"
everything: medallion rentals, credit card transactions, etc. (and we, the
taxpayers, pay for this bureaucracy again).

A better solution, IMHO, is the following. Auction off 20% of the medallions
every year, using a Dutch Auction. The participants in the auction must be
licensed drivers with N years of experience, and must pass a test about
familiarity with the City. A driver can get only 1 medallion. The City, as a
favor to drivers, can bring banks to the table, who can finance drivers. Each
medallion is for 5 years; after that period, the medallion goes up for auction
again.

[1] There was a case recently where the driver was headed to the airport with
passengers. He was speeding so he could get back there as quickly as possible
(there's a weird rule that if a cab leaves the airport but comes back within
30(?) minutes, it can come back to the front of the line). He had a mechanical
malfunction, and the cab caught fire. He survived, but his 2 passengers burnt
to death.
[http://abclocal.go.com/kgo/story?section=news/local/san_fran...](http://abclocal.go.com/kgo/story?section=news/local/san_francisco&id=7497183)

~~~
BadCRC
The case you cited does not match what you claim.

The round time from SFO to Mark Hopkins San Francisco hotel (where the couple
was travelling) is at least 40 minutes and the cab driver was driving from
SFO, not to it.

~~~
ajays
It's been 2 years, but here's the gist of it: cab drivers at the airport are
allowed to jump back to the head of the queue if they are gone for a short
period. Is it 30 minutes, or 40? Not sure. But I was told this personally by a
cab driver, and also read it in the papers when this incident happened. Once
the cab driver leaves the airport, he has N minutes (where in is a short
number like 30) to come back. So cab drivers drive fast to get to their
destination and then head back quickly. In this particular incident, it came
out that the cab driver was aware of the mechanical problem but didn't stop to
examine it because he didn't want to waste time.

~~~
BadCRC
The 30 minutes bit may be true but in this case, the cab driver would not be
rushing as there would be no way the driver could return to the airport in
time to beat the queue.

The article does not state that the driver was aware of any mechanical problem
but only that "he had smelled smoke".

------
dotnetchris
This inarguably shows the fallacy of "central planning." The government cannot
ever out smart a free economy. When the government refuses to allow the free
economy: illegal black markets arise and legal fiefdoms are spawned both at
the expense of the regular citizen. Who benefits from centralized planning?
There's only 2 classes that benefit, the government class and the criminal
class.

The simplest solution is just end absurdity like this. Let the free market
dictate how many cabs should exist and what fares should exist. Might people
become overzealous, overfill supply then strangle themselves from it? Sure. Is
it that a bad thing? No. The market will correct, suppliers will leave and
supply and demand will resolve the imbalance as it always does.

------
nih
There's an NPR money episode on NYC cabs @
[http://www.npr.org/blogs/money/2011/10/20/141546717/the-
mill...](http://www.npr.org/blogs/money/2011/10/20/141546717/the-million-
dollar-taxi)

------
tokenadult
Previous submission (no comments):

<http://news.ycombinator.com/item?id=4074668>

I'm wondering why the duplicate detector isn't catching more of the recent
series of duplicate submissions, and why searching for keywords on HN search
isn't turning up more of the stories. (I usually use HN search before I post.)
I found the previous submission of this story just now with a Google search
site-restricted to news.ycombinator.com, after drawing a blank with HN search.

~~~
olog-hai
The previous submission also never showed up in my RSS reader.

------
chris123
Just asking for disruption.... (P2P taxis, ride-sharing apps, etc.).

~~~
delinka
I think you're right. But you probably shouldn't call your disruptor a "taxi"
and you certainly can't just pick up random people off the street without the
license to do so.

Uber is in NY and they cost more than a cab, but I haven't heard how they're
doing in that market. I think I'd pay the premium to hire an Uber driver over
a random smelly cab any day.

~~~
fab13n
My understanding is that Uber does 2 things at once:

(1) they create a legal business to compete with the current taxi one, which
is corrupt beyond repair;

(2) they secure the high-end segment of that market to themselves.

Point #1 is quite brilliant, but could be expected from many groups of hackers
at ease with statistics and software. Point #2 is pure genius, though: they
cannot keep the whole market they create to themselves, because as soon as all
legal challenges will have been removed and the business model will have been
polished, there will be no way to prevent copycats from stealing their lunch.
Instead of preparing to fight a lost battle, they firmly anchor themselves in
the upper segment of the market, hoping that copycats will fight for the low
margin entry level market.

Therefore, Uber's market share is much lower than it could be: they're after
the patrons they'll be able to keep for the long term, not after every taxi
patrons. I believe that copycats preying on the whole taxi industry's
patronship will soon come and storm the market, though, unless lobbyists
manage to kill the legal loopholes fast enough.

~~~
viscanti
I think point 2 is the key. There likely will be increased competition once
some of the initial regulatory battles have been fought. Having a lock on that
premium market segment should allow them to be very competitive in a taxi-like
market as well (They can afford to have really low margins on much of that
market, where as their competitors won't).

There's really two parts to the business model. It's a balance between making
sure drivers are making enough money for it to be worth their time/effort and
ensuring that it's a pleasant experience for riders.

------
mtgx
It also makes sure only the very wealthy companies survive there, and that
there are no start-ups to threat them.

------
pbreit
This article provides almost no support for the headline.

------
michaelochurch
This is reminiscent of New York's abominably badly-structured rent control
system, which costs the vast majority of New Yorkers an immense amount in
increased rent, and will probably never go away because there's a powerful
asshole lobby that works overtime to keep it in place.

The _idea_ of rent control isn't so bad. If done properly and fairly, it could
make New York a lot better, but the insane legacy system is an unmitigated
disaster. Since RC rents aren't even allowed to go up with inflation, there
are a lot of people paying ~$200 for apartments that would rent for 10-15
times that. Technically, RC can only be passed within families, but the rules
are broken all the time, and there's a common (if morbid) practice whereby
people seeking rent control stalk obituaries and try to get themselves named
as relatives of the deceased, usually in an arrangement involving paying "key
money" to non-NYC resident legitimate relatives of this person. It has created
a class of parasitic, law-breaking New Yorkers who will never leave, because
they're locked in to an arrangement strictly better than ownership (landlord
pays maintenance costs and taxes, which are higher than RC rent) and even if
they only visit the city for 4 weeks out of the year, holding on to their RC
apartment is cheaper than a hotel-- especially because they can sublet their
RC apartments at market rent, which is also illegal but happens all the time.

Now, here's the kicker. The system was developed in 1947 to benefit working-
class people. In 2012, almost all of the rent-control holders are upper-middle
to upper-class people who have no legitimate claim to needing it.
Unfortunately, they're well-connected to the city council and therefore, like
cockroaches, will never leave. Disgusting.

~~~
epc
You’re conflating “Rent Control” and “Rent Stabilization”.

Rent Control applies to apartments built prior to 1947 and only to tenants and
their descendants who have lived in the apartment continuously. There are no
new rent controlled apartments in NYC. When you hear of $200 three bedroom
apartments in Manhattan, it they exist at all they're likely Rent Controlled
vs. Stabilized.

Rent stabilization applies to apartments built roughly between 1947 and the
mid-1970s. Rents can only be increased by a percentage determined each year by
the NYC Rent Guidelines Board
(<http://www.housingnyc.com/html/resources/dhcr/dhcr1.html>).

Tenants can be evicted from either style of apartment if the landlord can
demonstrate that the unit is not the tenant's primary residence, amongst other
reasons. While it is almost unheard of for a rent controlled tenant to be
evicted, stabilized tenants get evicted all of the time. It is by no means
easy.

Stabilized apartments can be removed from the rent stabilization program if
the rent exceeds a certain amount, or if the tenant's household income exceeds
a certain amount.

Typically landlords would love to eliminate RC/RS entirely, while tenant
groups would like to see Rent Stabilization expand. The current vacancy rate
in NYC is less than 3.something percent
([http://cityroom.blogs.nytimes.com/2012/03/26/decades-old-
hou...](http://cityroom.blogs.nytimes.com/2012/03/26/decades-old-housing-
emergency-continues-and-so-does-rent-regulation/)) so stabilization is
unlikely to end any time soon.

[I own in NYC, I don't rent. Calling the million plus people who live in rent
stabilized apartments "cockroaches" is itself pretty disgusting.]

~~~
dandelany
This. I agree that the original rent control program was badly structured, but
today, true rent-controlled apartments only account for 1.8% of all rental
units in NYC
([http://furmancenter.org/files/publications/HVS_Rent_Stabiliz...](http://furmancenter.org/files/publications/HVS_Rent_Stabilization_fact_sheet_FINAL.pdf)).
And as the parent says, this number can only fall.

Rent-stabilization, on the other hand, is being expanded (the 2011 Rent Act
increased the minimum rent for deregulation to $2500/month). It's less drastic
than rent control and seems to at least have some effect on keeping rents
low(er, this is NYC) without being open to such gaming effects as rent
control.

However, there are always loopholes. When I moved into my Manhattan apartment,
I was told before lease-signing that the rent would be less than the
$2000/month ceiling (at the time) for rent control. However, upon lease
signing, the rent on the lease was $2050 and there was an attached rider
saying I would be paying a lower, "preferential" rent - the originally agreed
upon amount - presumably to avoid rent-stabilization. Who knows if that would
stand up in court, but as long as management companies can make the tenants
_believe_ it's not rent-stabilized, it doesn't really matter...

~~~
glenra
The idea that stabilization is "having some effect on keeping rents low(er)"
seems questionable. There are effects that push in the other direction too.
For instance, the fact that "stabilization" exists at all makes being a
landlord less attractive. If people could bargain freely to any mutually-
agreeable rent terms, developing new housing would be less risky so more
apartments would tend to get developed, which would drive down the average
rent. Stabilization can hold down prices in a few apartments, but tends to do
so at the expense of higher prices (and lower-quality apartments) everywhere
else.

~~~
epc
There's plenty of new development going on, both condo and rental apartments.
New rentals are typically required to set aside some percentage of units for
specific income levels (so-called affordable housing). Condos typically trade
in 421-A tax credits (where new developments get very reduced property taxes
for some period of time, in return the developer must build some number of
"affordable housing" units, but not necessarily in the same building or even
neighborhood).

Stabilization and Control have definitely warped the market, but to date no
one, on either side of the tenant/landlord divide, nor in politics has come up
with a workable way to deregulate the market. It was thought that eventually
the Stabilization would go away because, as we all know, no one wants to live
in New York City and eventually the vacancy rate would go to 5% or more.

In practice the highest it's been since 1974 is in the low 4% range in the
1980s and very early 1990s.

~~~
chimeracoder
> New rentals are typically required to set aside some percentage of units for
> specific income levels (so-called affordable housing).

This happens, but it's different from rent stabilization - the program's
separate and the rules function differently.

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lhnn
It seems most people here accept that NYC should, or has the right to, limit
the activities of consenting private parties. Why should the government keep a
couple from paying me a fwe bucks to shuffle them down the road?

Oh ya, NYC and select parties don't get millions of dollars in fees.

Every time I think about NYC, I think of Tammany Hall, and wonder how little
has changed.

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gcb
Really? Is it any surprise that any system that creates artificial offering
scarcity instead of quality control of offerings is corrupt to the core?

