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- [00:09]
A
Hello, and welcome to another episode of the City Journal podcast. I am your host, Rafael Mangual, a senior fellow at the Manhattan Institute and contributing editor of City Journal. And I am so excited to be joined by two of my wonderful colleagues and friends. We have Judge Glock, who just might have the coolest name in all of public policy think tank land, and Adam Lahote. Welcome to the show, gentlemen.
- [00:33]
B
Thank you.
- [00:34]
C
Thanks so much for having me.
- [00:35]
A
Well, I'm excited to talk to you guys in particular because I'm kind of using this week's episode to air out my grievances about public policy. And it seems like after Zoram Lamdani's been elected, he has kind of taken the mandate to mean that now is the time to push the envelope on the most insane ideas that he can come up with. And two that have caught my eye that I've been dying to talk to you guys about is, one is this idea of no longer doing homeless encampment clearances, and the other is giving nonprofits the first right of refusal to buy up housing. And so we'll talk about those, too. But I want to start with this idea of not clearing homeless encampments, which just, like, absolutely blows my mind. And, Judge, this is one of the main reasons I wanted to have you on today's show, because, I mean, this is an issue you've worked on for a while, but it just seems to beg the question, like, who actually wants this? You know, I've been living in New York my whole life. I've never met anyone who actually doesn't want homeless encampments in public spaces cleared. I mean, what's the constituency for this?
- [01:44]
C
Yeah, this is something that has always baffled me a bit about this. The. The anti encampment clearance crowd, because it is minuscule. Like, this is. You talk to your average citizen and they are frothing at the mouth about these things, and you talk to a small number of politicos, and they see this is totally normal, acceptable, that these camps are just gonna be in public parks and streets indefinitely. I always cite, when I was living in Austin, the city council unanimously withdrew the rules on criminal penalties for street sleeping and street line and camping. Unanimously. And in this, I wanna say it's about a D +50 city, something like that. The vast majority of voters then voted to reinstate the criminal penalties. Like, this is something that your average voter, of course, is totally understanding of things. It's the most rational thing in the world to ban street camping, street sleeping. And for some reason, a couple Wild eyed homeless advocate fanatics convince politicos that no, it's okay, you don't actually and shouldn't actually take any action against people when they just set up a pup tent in a public park and live there indefinitely.
- [02:54]
A
It's absolutely wild. I mean, and again, you just going back to the Austin example, it reminds me of last November, not this past November, but a year ago during the presidential election cycle. One of the things that I wrote about for City Journal was some of the state level ballot initiatives that passed that seem to go against the grain of criminal justice reform. And one of the ones that I highlighted was a ballot initiative passed overwhelmingly by voters. I think it was 80% support in the state of Arizona that would actually give residents the opportunity to apply for a tax abatement. It created a private right of action wherever the government failed to clear homeless encampments, among other public, public order offenses. I mean, Adam, like when. Why is it that New York seems like just hell bent on unlearning lessons that everyone else around the country seems to have already learned?
- [03:48]
B
Yeah, well, I think what's driving this mindset is the idea that simply clearing these homeless encampments is just going to move them elsewhere. But that really overlooks the fact that New York does have a right to shelter. So if you're homeless, if you don't have a place to stay, the state and the city will provide a place for you to say that's not the case in other cities. You have this in Europe as well. You have, you walk down the street and you see just hundreds of tents and it creates these really uninhabitable zones where you can't bring your families. It accumulates. And I think this ignores the fact that there is a big detrimental outcome to the public at large. If you have one tent, it's not going to be causing that much of an issue. But if they start to accumulate and you have 10, 15, 20, 10, then it starts to bring, it starts to bring. Drug dealers will go to those zones and the problem really starts to accumulate. I think what, what this overlooks, what his proposal overlooks is the fact that New York is a state where we have right to shelter and that if you are, if you don't have a place to stay, the state already has provisions to give you one.
- [04:54]
A
That, that's, that's actually a really important point here because, you know, for a long time, especially out out west, part of the rationale for allowing people to encamp was, well, unless you have a place to put them, then they have a right to live somewhere. Right. But in New York, as you point out, they actually do have a right to shelter, and we have plenty of shelter space for these people to go to. And so the question is, is like, given that, isn't it better? Wouldn't you want people to be put into shelters as opposed to just hanging out on the street, particularly in the winter months, living in tents? How is the shelter system not better?
- [05:36]
C
It most definitely is. And again, most any sensible human in America understands that, except for this small crowd that is again, convinced a bunch of radical politicos, that camping outside is a human right. Again, even if you have shelter, like you pointed out, I've actually testified and worked on a bunch of bills and actions across states, across the Western United States. And every single time when I've been trying to advocate for, hey, you need to actually work to clear encampments, people say, well, there's insufficient shelter space. Where are they going to go? I mean, I point out they usually did have alternatives, that there are shelters in other places. Sometimes you can set up special, like, camping areas if you truly don't have any other place to go. But New York doesn't have that. It absolutely has a right. And the people who are outside are there because they want to be outside. And one of the main reasons they want to be outside is that shelters have rules, including rules on drug and alcohol use and so forth, and they don't want to abide by that. So if you're going to allow people to camp outside, and we've seen this time and time again, you're going to have more people camp outside instead of take the shelter option. And we've seen that in places like Austin and Phoenix and elsewhere when they've stopped enforcing, more people move from the shelters out onto the streets, and you're gonna have, frankly, more people dying of overdose and drug abuse and alcohol abuse and so forth. There's just no way these, these people are better off in a public park relative to a shelter. And as Adam pointed out, too, that impacts all New Yorkers. It's not like New Yorkers have.
- [07:13]
A surplus of public space on which to park, in which to hang out to every. This is all very valuable and you're effectively privatizing it. You know, Mondami and these radicals rail against privatization, but you're saying, hey, basically anyone who sets up a pup tent can now effectively occupy that land indefinitely.
- [07:29]
B
Yeah, it's also a really expensive way if we're going to treat these as shelters. If we're Going to treat the subways as shelters. This is also a really, really expensive way to do so than to, than just to provide an actual shelter and say that you have to go to this zone and you need to follow the rules if you're going to go there. Because it, not only, not only is it immensely expensive to maintain these parks and to maintain the subways, but then it also dissuades other residents and citizens in this city from using those services. So not only are we having to run the services themselves, but then there's also the economic impact that they then have to. They then can't get to work. It's far more unpleasant. You need to patrol that. It has a double impact, a hundred percent.
- [08:14]
A
I mean, I'll give you an example actually of that, that very same thing. It was back when I was still living in the five boroughs and went down into the subway station and there was a, you know, a homeless guy who was sleeping. And I mean, the smell was like biohazard level. And I remember I got down into the station, the smell hit me in the face like, you know, a Mike Tyson left hook. And I looked up at the little monitor to see how long until the next train. It said 14 minutes. I said, I can't breathe this in for 14 minutes. And then I took an Uber. And then rather than take this up, I just took an Uber for, you know, the rest of that day. I came back in an Uber, I went in an Uber. And so, you know, the city obviously loses out on that. And I'm sure that I took that memory with me into how I took the subway or didn't take the subway into those decisions in the future. But Judge, I mean, you brought up a really good point, which is that, like, one of the reasons that these people don't actually want to go to a shelter is that they want to be outside. And that the reason they want to be outside is because the shelter has rules. And you mentioned drugs and alcohol. And that, actually, I think, is an important point to make because it seems to me that people have just gotten it completely ass backwards when it comes to this issue. They, they cast homelessness, even the word homelessness, right? Like, they cast this issue as nothing more than a lack of a house. And if we just gave these people housing, then they would all not be homeless anymore. And the reality is, is that people end up on the street not simply for want of a house, but because they are deeply antisocial, seriously mentally ill, and oftentimes some combination of that with the fact that they are addicted to drugs and alcohol and have been unable to maintain a job and live a normal pro social life, which is how they ended up on the street in the first place. So much so that they will actually turn down the rational choice, housing in order to be able to continue to inject in their tent, you know, or booth or do you know, however it is that they choose to ingest the drug of their choice. And it's like this is, this is what the Mamdanis of the world don't understand by casting this as a housing issue. Housing is not treatment. An apartment is not treatment if someone's on the street because they cannot help but put needles into their veins and fill those needles with heroin and that that's what their life centers on. Giving them an apartment isn't to change that. Right. You can give these people a free house, as was given to a distant relative of mine, by the way, and they'll be back on the street in no time.
- [10:46]
C
Right?
- [10:46]
A
I mean, I. I had a distant relative who's now passed away a few years ago. She was very mentally ill. She was paranoid schizophrenic, bipolar, and addicted to drugs. And she would end up on the street all the time. And the city's answer to her problems was like, we're going to give her a subsidized apartment in a great building in the Lower east side. Like, I tweeted this out earlier this week, but it was like the kind of place that people will, you know, pay $6,000 a month for without blinking in a beautiful building next to a great park. You know, I mean, she probably slept in that apartment one week a month in total, if that. She was on the street constantly, turning up in hospitals, turning up in jails, you know, in homeless shelters. Why? She wasn't homeless, but she was just too sick to know that there was anything wrong with her. And so she would spend her time out on the street because that was where her crowd is and where she felt comfortable and where she could, I.
- [11:38]
C
Assume, ingest drugs occasionally. Not to.
- [11:41]
A
Oh yeah, yeah, for sure.
- [11:42]
C
But that's exactly one of my favorite stats is that in San Francisco, which is obviously double down on this kind of free housing housing first mantra more than any place else in the country. 11% of all the homeless people in the city, their last address was a subsidized housing unit. They were given housing, and because of the demons they were wrestling with, they could not stay inside. And this is the way homeless advocates conflate this issue of the Hardcore, long term, unsheltered on the streets with a lot of people who need short term help and shelter is really egregious. So homeless advocates will say, hey, most homeless individuals do not have issues with drug, drugs and alcohol. Most are not mentally ill. And that's true. But that's because most homeless people are actually in shelters. They're often families with children.
- [12:34]
There are often people who are in and out of shelters for a few weeks. They need help, they get back on their feet. The people out on the street, that is overwhelmingly people with drugs and alcohol problems and mental health problems. I often cite when I was in doing a homeless count in San Antonio, they have these annual counts that every city is supposed to do every year. And I was talking to the homeless outreach individual, he's like, well, how many of the people that you work with on a day to day basis out on the streets have problems with drugs and alcohol? And he said, well, you know, conservatively, 100%, you know, it's. Everyone knows that the people out on the street are there because they simply cannot stay inside. It's not because if they had 200 extra dollars a month in rent, they would be happily housed forever. There are people that need that and the people just need a little help. But that's not most of the people on the streets. And that's not what Mandami is talking about, allowing to stay out on the streets indefinitely.
- [13:26]
A
Yeah. I mean, it also just strikes me as just incredibly unsafe for these populations. Right. I mean, you know, it's cold outside. You're significantly more vulnerable to crime. And we know that, you know, the street homeless have a significantly higher rate of victimization than the general public. You are more likely to overdose because you're going to be ingesting drugs in an unsupervised and unsafe environment. There is nothing good about that. And then on top of that, the rest of the rest of society has to deal with the negative externalities associated with allowing these kinds of public order problems to fester. And as I try to sort of put myself in the far left shoes and think about like, well, what's the steel man argument here? I think Mamdani kind of tried to make it the other day where he said, well, you know, Adam's approach to this was a failure because if you look at the data that we have, you know, most of the people that were reached out to were during these clearances didn't actually get placed in any kind of permanent housing situation, as if that should be the standard against which we measure success for a program like this. But as you mentioned, a lot of these people don't want to be and are currently incapable of living inside, let alone on their own, in. Even in an apartment that's completely subsidized. I mean, so it just seems to me that they just get this issue straight. Wrong. Adam.
- [14:55]
B
Oh, sorry. Yeah, I was gonna say. I was gonna say exactly that. I think it's a. It's a matter of priorities. And the metric should be, like, safe streets matter, because if unless you have streets where people can walk down, people can transact and do business and get from one place to another, then the city stops functioning.
- [15:14]
C
Right.
- [15:15]
B
So the priority should be how do we. How do we maximize that? How do we make sure that people feel safe to go on the streets to. They're able to get around the city as effectively as possible, and they're able to actually use the streets that they pay for, using their taxes as well as they can. That should be the priority. And if that's the metric we're looking at, we have the legal tools that we need to do this. Now, I think they've gotten that. The social crusaders have gotten the priorities all wrong. And it's like, okay, we're going to be optimizing for this very small share of the population who have been offered resources, and there are ample resources out there to help them.
- [15:58]
Like, what happens to the majority of the population who come to New York because they want to make the most of the city, and they're not able to do so because of a small proportion of very, very disruptive people.
- [16:09]
A
Yeah, it's frustrating. And that's another important point, too.
- [16:12]
C
Right.
- [16:13]
A
You just said very disruptive people. One of the arguments that I hear about why the availability of shelter space in a city like New York isn't particularly compelling to the far left is that they say, well, the shelters are violent and they're insecure. It's like, why are they violent? Is the argument that the shelter workers are beating the hell out of the homeless people who come in to live? No, they are violent because of the populations that they are serving, which is just another way of saying that these populations have problems that go far beyond a lack of a paycheck or the ability to pay rent from month to month. Right. If these places are violent and dangerous, it's because that is a common social problem within that street homeless population. And, you know, if you can't solve those. Those core issues that are really at the root. The left love to talk about root causes. Right. Like if you can't solve those kinds of root causes, like, one.
- [17:16]
There'S just a reason to be more humble right here. But number two is just like, well, if the places are violent because the populations that they serve are violent, that's actually more reason not to allow them to live on the street where other innocent bypassers might come across these individuals. And that's how you get the kinds of sensational cases that we've gotten, like Michelle go getting shoved onto the subway tracks by a complete stranger in front of an oncoming train and kill.
- [17:42]
C
It's the question. I often use the old economist joke, where the one economist says to the other, how's your wife doing? And the other economist says, relative to what? And this, yeah. Are the shelters violent? Occasionally, yes. But relative to what? Relative to being out on the streets? Of course not. We've run this experiment. We know what happens when you have massive encampments out on the street. You have unprecedented levels of violence, overdose and deaths. In la, they've allowed basically public camping all across the city at this point for a number of years. You have almost 2,000 homeless deaths a year. So what you're talking about is about five humans being carried out on body bags, almost overwhelmingly from the streets every single day. I mean, this is a charnel house. And they're saying, well, you need to allow a little bit more of this or wait until you have sufficient permanent housing. And my counter to that is always wait until when? Like, what are we talking, decades? This woman died because we're going to get, we're going to get enough permanent housing available when, 35 years from now, how many deaths are going to happen in the interim? How many parks are going to be closed off, how many overdose are you going to put up with until you've created enough permanent housing? Even forgetting that there's a million reasons you don't want to offer permanent housing to the people on the streets. First, relative to those people who are in shelters. One, because it will attract people out of the shelters. If you say, hey, as soon as we're going to do a camping clearance, we're going to give you permanent housing, people figure out what that means pretty quickly. And two, if you're going to be in permanent housing, you actually need to take a couple steps to be there. Someone who's just out on the street and hasn't gotten used to being inside, even in a shelter, they're much more likely to fail and go back out on the street again relative to someone who's worked through a shelter system for years and knows what it's like to be inside.
- [19:24]
B
I was gonna. I was. I just. To respond to that point, they're kind of wiping their hands clean. They have a difficult problem of, yes, maybe there is violence in the shelters. I have no doubt, and I have read some stories about this. But the real question is, how do we address that? Like, the fact that there is violence in shelters doesn't mean we're just gonna not have shelters and we're going to let everyone live in the streets. It's like, let's address the problem here. There is violence in shelters. There are rules as well. In order to try and stem some of that violence, you need to abide by those rules. And we're going to focus on moving as many people into those shelters as possible and make them so they are habitable. That's obviously a much harder problem to solve than just saying, okay, well, the shelters aren't adequate, so everyone's going to live on the streets, and this is going to have really, really bad consequences on the public at large.
- [20:12]
A
That seems to me to be just like a common feature of quote, unquote, progressive policy initiatives, which is that the problem is recast to its simplest possible form so that they can then be the purveyors of the simple solution that not only sounds good and easy to implement, but also places them up on the moral hierarchy. Right. And, like, this is one of the reasons why I actually appreciated Eric Adams's response to this policy proposal, because, you know, he came out and said, like, actually, no, it's not compassionate to allow people to rot on the streets in, you know.
- [20:50]
Unstable mental states, addicted to drugs and alcohol in places where they're likely to be violently victimized or hurt somebody else. Like, there's nothing compassionate about that at all. It's not compassionate for the people who have to deal with the negative externalities associated with that. It's not compassionate for the people living on the street themselves. And it really does just absolutely stick in my craw when you see this kind of stuff, because it's just like, everyone knows that we're not going to be better off for this. Everyone knows that this isn't going to solve the problem. Everyone knows that the homeless population isn't going to be better off. And yet we're going to proceed as if this is some enlightened path to go down. And it just absolutely boggles my mind. I'll never understand it. But I do want to talk a little bit about permanent housing, because that's Another area in which the Mamdani administration, which hasn't even taken office yet, seems poised to go down a pretty wild road. And Adam, you wrote a fantastic piece for City Journal about this that I want you to talk a little bit about. And the piece is about.
- [22:00]
C
What are.
- [22:00]
A
Called Community Opportunity Purchase act or the Community Opportunity Purchase act, which is pending legislation in the city council that would, as I understand it, and correct me if I'm wrong, essentially put residential housing that's on the market, give certain nonprofit organizations the first right of refusal, meaning that they get to have priority when they're bidding. And if they're outbid by a private entity, they get then the opportunity to override and match that. Which seems kind of crazy to me because I feel like as a private property owner, one of the things, one of the decisions that should be, you know, mine to make is who I sell my property to too, irrespective of how much they're paying me. You know, and this is something that we see in the private residential market all the time. I mean, I have a friend who, you know, when they were buying their first house, they were outbid, albeit not by that much. But the homeowners turned out to be the parents of a high school friend. And so the homeowners chose to give it to the nice young couple that they knew from their early childhood. And they turned down the extra whatever it was. But that was a choice that they, you know, that they made as the owners.
- [23:19]
C
Right.
- [23:19]
A
I mean, if I. If it's mine, it's. It's mine to sell. And if it's mine to sell, it's mine to sell to whom I want. So I find this idea offensive on, on just property rights grounds, but it also just strikes me as another boondoggle waiting to happen.
- [23:35]
B
Yes. Well, firstly, I completely agree just on the, on the property, private property rights aspects. I think one of the questions we need to ask ourselves is whether we really want officials in city hall double checking or triple checking, every transaction being like, oh, no. But this offer looked very similar to this one. And the nonprofit that we approved made this offer, so it should have gone there. And.
- [24:03]
It creates an opportunity for really lengthy disputes. I think that the reality. I spoke to a policy expert in Washington D.C. where a similar law has existed for over 40 years, and they just rolled back a part of that legislation because what it ends up doing is the nonprofits and even select for profit entities that operate low income housing, they have a first right to purchase. They have a, I believe, 45 days to say, yes, we're interested in buying this. And then they have an additional period of time where they can come up with the offer.
- [24:40]
No seller is ever going to just accept that first offer. They want to consider their other offers. So you're going to have, you're going to be adding several months of delay to every single transaction that falls under this law. It's been amended so that it's for certain low income or, or certain distressed properties. But you have properties that really need investment. And you're going to be delaying transactions for several months on all of these transactions.
- [25:05]
And then you're going to have a seller who's trying to make a transaction with someone, and you have the potential for a nonprofit or for another group just to swoop in and take the transaction. These delays have costs.
- [25:20]
A
Do you think the delay is the point?
- [25:22]
B
Sorry?
- [25:23]
A
Do you think the delay is the point? Right. I mean, if I know as a property owner who's trying to sell, you know, my apartment building on the market, if I know that the fastest way to get rid of it is actually to give it to this nonprofit, you know, there is a ca. There's. There's an opportunity cost. Right. Associated with extending the amount of time that the property's on the market.
- [25:47]
B
Yeah, exactly.
- [25:49]
A
And, and that's just, you know, I don't know, we're not constitutional lawyers on here, but like the word taking comes to mind, regulatory taking meaning that like this actually could reduce the value of the property on the market.
- [26:03]
B
Yeah, yeah. Well, it definitely would do that. And the other thing is you're going to have, like, what, what this means in real terms is that you're going to have an owner who feels that they're not well placed to continue managing the building. That's why they're selling it, because they don't want to keep managing this building. And you're going to have a seller who's willing to take over the building, but we're going to say, no, you can't. Like, we're going to. You have to wait several months more than is currently the case in order to do that. Now, I think the other question. I think the real point of the legislation is that they want to see more nonprofits.
- [26:34]
Operating these, these developments and these buildings.
- [26:39]
A
Why?
- [26:40]
B
It hasn't even been the case in Washington, D.C. it hasn't even been the case. Like most, most of the time it doesn't even go to these nonprofits. So the delay is really for nothing.
- [26:50]
C
Yeah. Can I jump in on Ralph's question about why this is something that does baffle me all the time. Why, why do you want a nonprofit developer, housing owner, whoever it is, running, managing these apartment complexes? Are they provably better at managing apartment complexes? Do they have better skills at it? If you have a, a concern about affordability, you can do that. You can pay someone off to make sure it's affordable. You can, you can subsidize the difference. You can do a housing voucher, whatever. You don't need to have some nonprofit housing developer run the place because we have an abundance of evidence they run it worse than regular for profit housing developers. As I often say, I got no problem with nonprofit. I happen to work for one myself. The world needs them. But the truth is everyone at a nonprofit gets paid. There's not nonprofits out there where everyone is working for free. These nonprofit, the only person who doesn't quote unquote get paid is the capital donor, the person who's providing the base capital for the nonprofit, whatever it is. These nonprofits are basically profit making organizations for the employees that work there that often pay themselves very handsomely, that have no particular someone looking at the bottom line to make sure everything's going according to Hoyle. What they have is a lot of political power and people to give them to. I always cite Willie Brown, the former mayor of San Francisco, who called the nonprofit housing developers the sacred cartel. They somehow managed to convince that city and a lot of other cities. They are these special group of people who are the only people out there who don't care about money or anything else, but they're just going to run nonprofit housing for the greater good of the community. And what you actually see is a ton of scandals that we could go in on and on and about right now that the Skid Row housing Trust recently went bankrupt and had all of these violations of rats going through the apartments, broken windows, et cetera, et cetera. Because not surprising, they didn't have a lot of particular expertise in managing buildings. They just happened to be a bunch of activists and advocates who were running housing for a while.
- [28:57]
A
Yeah, I mean this just kind of gets at the core of like why I've always called myself a conservative, which is that I actually just trust the free market a lot more. I mean, you know, like there, there is, there is something to be said for a profit motive actually motivating people to do a job better than someone who isn't, who doesn't stand to profit from doing that job. Well, I mean that incentives are real, they exist and I believe in them. It's not like Santa Claus. Right. I mean.
- [29:27]
This is something that just used to be simple, used to be widely accepted, and now we seem to just be backpedaling on this for its own sake. And the question is, it's like, why? I mean, can you think of another sector of the economy that is dominated by nonprofits that runs better than it did when it was dominated by for profits? I mean, I cannot think of one.
- [29:49]
C
Well, the substitute here is what happened is that basically the nation went down the public housing route for 40 plus years from the Great Depression and to the.
- [29:58]
A
And it's like, well, look at a NYCHA housing project in New York City and tell me if that's the place that you want to live.
- [30:03]
C
No, because there's no reason the government was, quote, unquote, a better housing manager than the private sector. And we all know that. And this is why, you know, big public housing projects across the country were blown up, were turned into rubble because the government was so bad.
- [30:16]
A
In the briny green in Chicago.
- [30:20]
C
Yeah, Prude igo over in St. Louis, on and on and on. These things became rubble because they were such unmitigated disasters. And the nonprofit housing sector was basically supposed to be the big substitute for that. We're not going to have publicly run stuff. We're going to have a private group that's subsidized by the public sector run all these lower income housing units. And I'll admit it's probably better than having the actual politicos in the city of Chicago run housing. That's probably a superior alternative. But why does it have to be a nonprofit? Like, why does it have to be all these groups that actually are mainly powerful because of political subsidies and political influence who get to run them? There's no reason. And they're bad at it.
- [30:57]
B
Well, let me add here, there's another aspect of this bill, and this is what has happened in Washington D.C. you have lawyers who will approach a set of tenants when the building goes up for sale. And I'll say, by the way, do you realize that you can form a tenant association and you can extract concessions from the owner who is trying to sell their buildings and you can veto the sale unless they give you cash. Sometimes it is like literally straight cash. Other times it might be payment in kind. They might say like, okay, you need to redo the entrance hall or you need to make changes to the building.
- [31:37]
But it's used as a form of extracting concessions from the owner of the building. That's what, that's what's happened most of the time. And I have no doubt in my mind that for some of the sponsors of the bill, that's exactly what they intend.
- [31:51]
C
They. Yeah. As part of the long term intention to turn rental housing into a property, house, property. Right. For every tenant that lives there. I mean, that's effectively what all these cities with rent control are doing. This right of first refusal, this extra subsidy is if they get converted. All these big cities are trying to make tenants the effective owner of that unit as soon as they stay there for a certain length of time. And that's why you also have, you know, I was doing an article about California where you have all of these groups, squatters squad and others. Their whole job is to drive people out of these buildings. They've been effectively given a property right into it and that apartment owners can't kick them out. And that's, it's expropriating to Ralph's point, that basically the actual owners of these apartments.
- [32:37]
A
And it's infuriating. Right, because it's like, why, why should they get this benefit?
- [32:42]
B
Well, the other thing is this, this isn't cost free, right. The money that, towards these concessions and towards the lawyers that are, that are and the nonprofits that are rallying them up, that's money that could otherwise be going into investment. And the buildings don't maintain themselves. I think the big fallacy is to believe that landlords just aren't really doing anything. They're just, it's just like a parasitic role and that all they're doing is collecting rent. In reality, there's a massive amount that goes into running a building. Okay. You need to redo the roofs every 20 years. You need to. There's so much upkeep that goes into doing it. And then there's that. You need to manage the debt effectively. It's not, it's not free. It's no, there's no guaranteed profit. And we know that because even, even a lot of non profits are now underwater, not able to meet their debt. And so like there's a lot that goes into, into doing it. And the more that goes towards lawyers, the more that goes towards administrative overhead for these nonprofits. That's money that could otherwise be going towards either new housing or improved housing. And we're not, we're not getting that.
- [33:50]
A
The question, one question I have is like, okay, so let's say, you know, some of these properties get taken over by some nonprofit. Say the nonprofit goes under, goes bankrupt. What happens to the property?
- [34:02]
Does it go, I mean, does the government thing get demise depends on the dollar.
- [34:06]
B
It would likely go to the debt to the creditors.
- [34:09]
C
Sorry. And I think it definitely depends, and I couldn't generalize on this, but usually the nonprofit inherits it with some sort of permanent lien or easement or whatever. It would be in this case to say, you have to keep the rents at X, Y and Z level. And there. And that's. But that makes, again, it really hard for someone to buy that because this is what happened in the Bronx in the 1970s and so on, when the value of the property was lower than the cost of maintenance. People just let them burn to the ground.
- [34:38]
A
Literally.
- [34:40]
C
Literally let them burn. Let them burn to the ground. Because they said, hey, we're not going to get any return on that. They used to say, you knew it was a landlord fire because it started from the top floor, which gave people time to run out. But that made perfect economic sense for a while. And, like, if they keep pushing landlords, that's what's gonna happen.
- [34:58]
A
And to give people a sense of just how common that was in the Bronx in the 1970s, there's this sort of iconic moment in New York City sports history where during the 1977 World Series, as you know, is typically done in these big national sports casts. There's like a blimp camera that was focused in on Yankee Stadium from up above and then zooms out. And as it zooms out and captures more and more of the Bronx, all you see are these buildings on fire. Pepper throughout the screen.
- [35:27]
And the announcer whose name is escaping me at the moment, Howard Cosell. Howard Cosell. Howard Cosell says, ladies and gentlemen, the Bronx is burning. And it becomes this kind of like. I think that was the title of an ESPN original series.
- [35:41]
B
And that's a book as well.
- [35:42]
A
Yeah, yeah. I mean, it just became this moment where, like, New York City was sort of solidified as the national symbol for urban failure and blight. And it's like we're just going down the same path and recreating the conditions for these kinds of insane rules. And I just. I cannot. I cannot see the rationale for it. And it makes me want to pull what little hair I have out of my head. So the question I have for you all is just, you know, is there any cause to be optimistic at all on the housing front, or are we just going to be looking down the barrel of a series of failed experiments and that we just have to hope that it doesn't get as bad as we think it might?
- [36:26]
C
Well, I guess the short answer is we can hope that most of the burdens that New York City puts on landlords and others will be more minimal than we expect. You know, D.C. and San Francisco and Prince George's county and a few other cities that have done similar sorts of laws have not been totally frozen in their rental markets because of this. It's been a clear detriment. It's limited affordable housing stock, it's led to less maintenance, et cetera, et cetera. But the cities are enough of a draw that the housing market goes on. And this is the difference between New York Today and the 1970s. As long as we can keep the crime under reasonable control and the other standards of living reasonable, there's a high demand to live here. Now again, you let enough homeless campments proliferate, that gets a little more questionable. But unlike the 70s, there's a lot of people want to live in D.C. and there's a long way for those housing prices to go down before you actually start torching them.
- [37:25]
B
Yes, I think there are reasons to be optimistic. There is a growing awareness that part of the, part of New York's extremely high rent burdens are caused by an undersupply of new construction. And the city has passed laws to try and improve that. They passed it if yas which aims to upzone and to massively increase construction construction across the city. I think there's a lot that we can work with and we have the academic. I think the other thing to be optimistic about is that we have an understanding of the economics. Right? There's, there's a rich.
- [38:03]
Amount of urban economic literature that contains all the answers. So we just need to start applying this and hopefully if we do that we can create a city that, where housing is more affordable. As a, as a. I always like to think about it as a percentage of incomes because obviously, obviously our incomes are a lot higher in New York City. So we're trying to bring down the proportion of incomes that we spend on housing. And the only way we're going to get there is by continuing to increase that supply.
- [38:32]
C
Can I just say one thing quick? It's like the. One of the things drives me nuts about kind of the left Yimbys here is yes, they want to legalize housing to make it possible for more people to build housing, but not legalize earning an income from those houses. Housing necessary. Like it's great if you rezone to allow more people to build, but if you actually are going to make it impossible to earn money, nobody's going to build you need both sides of it and they refuse to admit.
- [38:55]
B
Great point. Yeah, but this is a great point. It's also, you could have a society where 100% of people own their homes, but there is an economic benefit to being able to rent. If you're a student and you're coming here for a couple of years, you don't want to buy a home, it is beneficial to have at least some portion of the market for rent. And so if we're going to prohibit that, that, that actually is going to result in worse outcomes.
- [39:18]
A
100%. I mean, there is a rental market for a reason. I mean, there are some people, I was one of them for a time, did not want to yet buy a house. It didn't make sense for me. I wanted the flexibility of renting because there was a certain level of uncertainty, right. Like when I decided to go to law school in Chicago, I made that choice in about a month's time, right? So I only had a few months, you know, to tell my landlord that I was going to be ending the lease early and give him time to find another tenant and then, you know, go and like, I wanted the freedom to make that choice. It wasn't until, you know, I got to a certain point in my life where I realized, okay, well, now it's time, you know, to buy a house and I'm ready to do that. You know, for, for a lot of people, it's just financial, right? I mean, you can make the argument that at least under some circumstances, you know, paying rent is actually a better way to preserve your, you know, long term financial health, right? If you were to invest your down payment and, you know, maintenance costs that you would put into a private house, if you just invested that in the market and, you know, you had a decent rent, you know, that pool of money might do better in the market than it would if you put it into a single family house out in the suburbs somewhere.
- [40:31]
Which can become a drain on the family's fisk. I know very well as someone who's dumped a ton more money than he expected into his house relatively recently. So, yeah, I mean, these are just things that people don't get. And I think kind of the lesson here for progressives is that I want the public to understand just how much hubris undergirds their sort of policy positions. I mean, the idea that we can solve these super complex social problems with very simple solutions, it's just silly. It's never been proven. Right? Whether it's poverty or homelessness or addiction, these are Problems that have kind of plagued every society that's ever existed. I've never known it to not exist anywhere in which humans have lived. And so the idea that we just have the permanent solution and that someone, some 33 year old, 34 year old incoming mayor is going to figure it all out for us just strikes me as is silly. So last time I saw. We're all remote now, but last time I saw you guys was at the Christmas party, which was a lot of fun. And we're coming up on the holidays, so I feel like ending the episode just with a little bit of holiday cheer. I'm curious as to what your holiday plans are. What are your little traditions that are fun? I'll tell you, for my part, it's going to see the Rockettes, which we do every year, and that's coming up for us in a couple days, which we're excited about. We got two small kids for whom the Christmas spectacular is just absolutely. Magic. Magical.
- [42:02]
C
So.
- [42:02]
A
So I'm looking forward to that.
- [42:04]
B
Yeah, I am going to go and see the Rockefeller tree, which I haven't done yet.
- [42:10]
C
Is it.
- [42:10]
A
It's lit.
- [42:11]
C
Yeah, yeah, yeah, yeah.
- [42:14]
B
But yeah, I'll be doing that. That's my, that's my New York holiday tradition. And then I usually spend Christmas with my family.
- [42:20]
A
Nice.
- [42:20]
C
My, my family's a bunch of grinches and so forth. They're like, my, my parents have bought a tree in decades or whatever. But no, I'm trying, I'm trying to be more of good holiday cheer. And this year we're doing something. You might get a kick at this. First time ever. We're traveling abroad. We're going to Dominican Republic for Christmas. Of all. I know, I'm looking, I'm excited.
- [42:38]
A
All right.
- [42:38]
C
I can't wait. I've never been.
- [42:40]
A
It's, it's. You're going to have a blast. I can't wait to have a blast. That's. That's great, man. I haven't been in a long time. Actually. I need to go back. I need to go back and I'll.
- [42:50]
C
Tell you how it's looking.
- [42:52]
A
Yeah, no, my, my parents were just there. My sister was just there. I just. It's hard for me to make the trip with the kids.
- [42:59]
But. No, I gotta go. Well, that's exciting. I'm looking forward to hearing about that. And if you need any recommendations, I'll get my family to send some your way. But you're gonna love it. It's a beautiful island, great food, better people, awesome music.
- [43:13]
C
I'm looking forward to it.
- [43:14]
B
And brush up on your Spanish as well.
- [43:16]
A
Yeah, man.
- [43:16]
C
The rest. I'm the only person in my family doesn't speak Spanish. My like 5 year old, 7 year, they all got mastered it. I picked Deutsch, of all things. The language you're least likely to use with other humans, actually.
- [43:27]
A
Well, it depends on what resort you go to, actually. I mean, the Dominican Republic, international destination. I mean, last time I was there, there were people from Sweden, from Denmark, from all over the world. So it's a fun place to be. All right, well, we are coming up on time, so I'm going to leave it there. Thank you so much for lending us your brains and your wonderful insights. It's always a pleasure to chat with you guys. For you all watching and I hope you enjoyed the episode. Please do not forget to like, comment, subscribe, ring the bell, set the alerts, do all the things on the socials, boost us in the algorithms. We've been getting more and more questions and comments from you guys, which we love. Maybe we'll do an episode just responding to some of that, but until next time, you've been watching the City Journal podcast.