Despite the absence of recent data, there is no reason to believe that previous findings no longer hold true. Hence, this chapter draws heavily on the works of other analysts who have studied rent regulation. This is a vital question, considering that all New Yorkers, particularly tenants, suffer from a housing shortage. The comments of Elizabeth Roistacher, an economist who has studied rent regulation in New York City and elsewhere for the past two decades, represent those of the panel in general. This assertion is corroborated by other researchers.
Several factors lead to such a finding.
First and most important, most moderate rent regulations, like those in New York City, exempt newly constructed units from rent regulation. Regulatory provisions allowing for rent increases to cover changes in operating costs and capital expenses effectively address any concern potential builders may have. Third, virtually all New York City builders elect to submit their newly constructed rental apartments voluntarily to rent regulation in exchange for tax abatements. Newly constructed units therefore fall under regulation solely due to owner acceptance of regulation as a condition for tax abatements such as those offered by the 421a and J51 programs. This willingness of owners to subject their otherwise exempt units to regulation advances the argument that controls are not a significant deterrent to new construction activity.