Measuring the value of rent stabilization and understanding its implications for racial inequality: Evidence from New York City

Abstract

Amid a renewed interest in rent control due to the housing affordability crisis, the scope and distribution of its benefits remain underexplored. Using methodological innovations, this study quantifies rent discounts for rent-stabilized units in New York City (NYC) from 2002 to 2017. We estimate an average discount of $410 per month. Additionally, we note that these discounts are: (1) not progressively distributed towards lower-income households; (2) more pronounced in Manhattan and increasing in gentrifying areas; and (3) double for households correctly aware of the policy. The aggregate rent discounts range between $4 and $5.4 billion annually, representing 10%–14% of the federal budget for means-tested housing programs. While White tenants received larger rent discounts in the 2000s, racial disparities in these discounts have largely diminished since 2011, consistent with patterns in spatial sorting and gentrification.