In order for a city to thrive economically and socially, it needs to be able to accommodate residents with all income levels and housing needs.
The availability of “affordable” apartments in New York City (as defined in the “Introduction to the New York City Rent Guidelines Board and the Rent Stabilization System” by Timothy Collins,
a must-read for any serious stakeholder) is a looming housing crisis. This impending issue is not due to the usual arguments we hear regarding affordability of housing, but rather the dysfunction of the rent-regulation system due to its incompatibility with the economic system all stakeholders of housing live in aggravated by piecemeal attacks on the rent-stabilization guidelines system. The solution to these issues requires policy approaches that take a more multi-faceted and long-view approach.
Currently, rent freezes, rising property taxes, increased operating costs and the increase in the costs of maintaining the city’s aging building stock in the proper way are only a few examples of the rent laws’ incompatibility with our economic system. The negative use of terms such as gentrification in a city made great because it was allowed to evolve and grow, along with antiquated rent laws that were designed to be a temporary stopgap of a housing shortage in 1945, all serve to stifle the development of more affordably-priced housing and disenfranchise the very capital interests needed to maintain and grow the housing stock as well as renters renting on all levels of the spectrum.
Along with the economic pressures landlords and tenants alike face, the clearly defined aims and rules of the rent-stabilization system have been misinterpreted and have come under attack by a rent regulation system that does not serve tenants or landlords. By stifling increased housing inventory which can reduce rent levels for tenants and the amount of regulations imposed to operate with economic incentives for landlords, it is not benefiting anyone. These market dislocations are a fracture in a system that is being forced to conform to
a false economic model.
Additionally, the annual population growth, the ever-increasing cost of living, and the cost of operating buildings are critically missed and unaddressed issues that are compatible with tenant advocates and landlords’ interests. These are the underpinnings of rising market rents and the lack of affordably-priced apartments. For renters and landlords, these factors are missed opportunities: for renters to have increases in market rents become more regular in growth, and for private enterprise builders and landlords to expand and grow with economic incentives necessary to maintain a viable housing inventory and keep up with the growing demand of renters.
The added agenda to build 20-30,000 affordably priced units a year is a great effort, but a more multi-faceted and long view approach grounded within the economic model we live in has to become part of public policy in order to keep NYC’s economic engine running smoothly with the necessary diverse and sustainable workforce close to industry. A shift in thinking must take place towards recognizing the entirety of people’s economic lives and away from seeing the free market and landlords as the problem.
While debate roars on about issues that, in my experience, have less to do with the rent guidelines system and more to do with a force of wills over a misinterpretation of and piecemeal approach to the rent laws. Despite this approach to rent laws coupled with the original purpose of the rent stabilization system, even more pressing factors are being ignored. Namely the near future job market and what it will look like for all renters, including those renters who are paying very low rents compared to market rents.
The advent of artificial intelligence taking over jobs across all spectrums will require more multi-dimensional and expansive housing policy initiatives that need to include a methodical and fluid series of policy implementations where higher paying job training is part and parcel
of an affordably-priced housing initiative. In a recent visit to Silicon Valley, I learned firsthand what is coming down the pike in the way of technology replacing jobs across numerous industries.
This acceleration of human job displacement already in motion by artificial intelligence is an invisible tsunami heading towards all of the stakeholders in the housing market. Over the next 10 years, it will wreak economic havoc on all tenants paying rents–even those paying very low rents–and landlords receiving rents, and the issues we bicker about today will seem small in comparison to what is on the horizon.
All stakeholders need to focus on retraining now for higher paid and more sustainable jobs rather than attempt subsidized short-term solutions that are not sustainable. The development of Quantum and Parallel computing is going to dwarf the potential of today’s computers that are already accelerating the application of AI at light speed. We need to provide in-place renters and new family formations the tools to keep pace with these developments; otherwise, these tenants will be unemployed and unable to pay any rent at all.
As a result, a 0, 1, 2, or 3 percent increase in rents will become a moot basis for discussion. These are all short-term wins for in-place and new family formation housing stakeholders and do not support the socio-economic or regulatory aspects of a sustainable model for housing. AI has already had an impact on low-tech jobs and some high-tech jobs, but the total impact and its effects on the labor force will be much greater in the future.
It is time for a policy and paradigm shift in our approach to affordability in housing that includes a deeper understanding of human endeavors as well as the economic and earning life of our in-place tenants. We must move beyond short-term solutions and a zero-sum game mentality to address civic and business interests by employing a strategy that will serve the needs of renters and private enterprise landlords for generations to come.
Now is the time for landlords and tenant advocates along with long-view policy support of city agencies to find common ground and put nearsighted and one-dimensional paradigms aside that only frustrate the needed housing expansion in place of long-view, broader-in-scope planning that will facilitate the growth and development of our city so it can remain the beacon of inspiration for its inhabitants and the world.
We at Shamco Management call for a constructive debate by all stakeholders who want to create a sustainable housing policy (tenant advocates and landlords) to expand the current housing policy by proposing a shift away from the adversarial relationship between tenant advocate groups and city landlords to enable all of us to assist in-place renters and new family formations in getting higher paying jobs where possible that will sustain the future changes in the local job market.
Shamco Management’s main initiative is to provide the space for on-site seminars through a government policy supported partnership between educational institutions (city colleges), business owners (including landlords), and non-partisan tenant advocates willing to accept the realities of changing economic forces.
By teaming up with local city government to support the proposed policy agenda, together landlords and tenant advocates can begin to tackle the housing issue, including resolving the lack of exposure to higher paying jobs and ensuring a better quality of life for NYC renters while creating a healthier environment in which landlords can operate. Objectives of the initiative include:
• Provide seminars on-site at residential buildings for the types of jobs that pay higher wages including skilled labor and jobs in tech and finance that are indigenous to NYC’s current job market for higher paying jobs;
• Introduce job search skills such as resume writing, interviewing and training in core competencies required for higher paying positions;
• Hold informational sessions on the kinds of jobs out there and how to get them as well as presentations by college outreach coordinators of adult education courses and programs available;
• Offer ongoing mentoring and buddy support to ensure the best results; and
• Improve quality of life through on-site health and nutrition programs
The initiative above will only be possible if city-funded colleges (the true economic drivers of our city), tenant groups, businesses and landlords put aside their old paradigms that ignore the need for economic incentives for landlords to maintain and grow the housing stock and commit to civic-mindedness by preparing city renters for the real economic challenges of the future. By all of us working together and playing more active roles as economic drivers of the city, rather than creating temporary short-term solutions, we can provide renters exposure to the education and training necessary for the changing job market and we can all benefit.
We look forward to advancing this initiative and seeing how it can be improved and expanded upon as well as having more definitive discussions about its implementation. As the city’s economy evolves, we will all need to join forces to maximize the employment and housing opportunities for all renters.
Alan Shamah is the CEO of Shamah Properties/Shamco Management.
4 thoughts on “CityViews: Artificial Intelligence, not ‘Greedy Landlords,’ is the Real Threat to Tenants”
Pingback: CityViews: Artificial Intelligence, not ‘Greedy Landlords,’ is the Real Threat to Tenants – NewsChest Technology
Pingback: CityViews: Artificial Intelligence, not 'Greedy Landlords,' is the Real Threat to Tenants - AI+ NEWS
Pingback: CityViews: Artificial Intelligence, not 'Greedy Landlords,' is the Real Threat to Tenants - City Limits - AI+ NEWS
Public housings is the solution to combat greedy landlords. Landlords can simply raise the rent again and with stagnant wages, the cost of living will only keep going up and businesses prefer profits over paying workers higher wages, tenants will have no choice but the move out and find affordable housings.
The problem in America is GREED. Free market capitalism does NOT guarantee an increase in workers wages.
If landlords refuse to decrease rent, then it should be the government to provide public housings so poor tenants can live there for 50 years and onwards. The truth is, landlords rely on tenants, to LEECH off of them.
We don’t need landlords. We don’t need the people to rely on landlords.
Public housings is the solution. Force landlords to either decrease rent or force to sell their property if they are unable to pay off their mortgage OR find other ways to make money.