In last week's New York Times, I found a fascinating article about Congressman Charles Rangel and newly released information about his home in New York. I was particularly interested because Rangel's home actually consists of four rent stabilized apartments in Harlem.
As many of you may not know what rent control and rent stabilization is, here is a quick primer. From Wikipedia: "Rent control refers to laws or ordinances that set price controls on the renting of residential housing. It functions as a price ceiling." Actually the original premise of rent control is founded upon good intentions; the idea being that in a city we should be able to provide a stock of affordable housing for lower income families. If only good intentions won the day!
So let's consider a number of things. How likely is it that Congressman Charles Rangel heads a low income family? Well, according to the NYTimes article, his net worth is somewhere between $566k and $1.2 million. Not Bill Gates worthy but certainly not low income. How did Rangel come to acquire not just one rent-stabilized apartment, but FOUR? Certainly there is some sort of income requirements in order to qualify for rent stabilized apartments? Nope. Actually there isn't. So how does one acquire one of these coveted apartments? According to my friends that live in New York City, there are three ways that one acquires a rent stabilized apartment: inheritance, by knowing someone, or by paying what is referred to as "key money" (which, while illegal, is not uncommon). And so how likely is it that low income families acquire rent stabilized apartments through these means? Almost never.
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