28/1/20: What Doesn’t Work in NYC Probably Won’t Work in Dublin

As Irish politicians talk rent controls, here is some interesting evidence from NYC's recently passed rent control rules (since June 2019): https://reason.com/2020/01/27/totally-predictable-consequences-of-new-yorks-rent-regulations/.

  • Sales of apartment buildings in NYC fell by 36 percent in 2019, and that the total spend on purchases fell by 40 percent. Not all of this is down to rent controls changes - NYC is grossly over-supplied in the premium segment of the market and traditionally large-ticket buyers are staying out of the market (Russian and Middle Eastern money) or selling (Russian and Chinese) due to geopolitical and legal ownership threats.
  • "The prices investors were paying for rent-stabilized units—where allowable rent increases are set by the government and usually capped at around 1 or 2 percent per year—fell by 7 percent." More direct evidence for less than 6 months of new rules being in force.
  • "... landlords are reportedly cutting back on the money that they're putting into the buildings that they do own... [as] 69 percent of building owners have cut their spending on apartment upgrades by more than 75 percent since the passage of the state's rent regulations. Another 11 percent of the landlords in the survey decreased investments in their properties by more than 50 percent." More direct evidence things are not going in the desired direction.
  • "The new law's limits on recouping the costs of renovating apartments mean it is often more  financially feasible to leave old apartments vacant."
  • The lower end of the market is probably most hit: "The Commercial Observer reports that the new rent laws are encouraging small- and mid-sized landlords to exit the market entirely, writing that "many property owners have woken up to a world where their buildings are worth 30 to 50 percent less than they were a year ago."" 
  • And another quote: "Middle-class and working-class neighborhoods, ... would be at particular risk."
Thoughts on why this should work any differently for Ireland are welcomed in the Irish mainstream-populist media.