Introduction: The Importance of Housing Security and Community Stability 1138 I. Understanding Neighborhood Change 1141 A. Theories and Evidence on Neighborhood Change 1141 B. The Role of Policy 1145 II. Understanding Housing Options Through a More Expansive View of Tenure 1149 A. Informal Tenures 1151 B. Affordability-Protected Rentals 1152 i. Rent Stabilization and Rent Control 1152 ii. Federal Subsidy Programs 1155 iii. New York City Programs 1156 C. Open-Market Rentals 1158 D. Third Way Tenures 1159 E. Mixed-Tenure 1160 F. Homeownership 1160 Part III: Neighborhood Types and Where Low-Income Households Live 1161 A. Data and Methods. 1162 B. Results 1164 Part IV: The Potential Impacts of Rent Stabilization 1168 A. Not Losing Low-Income Households 1173 B. Ongoing Displacement 1174 C. At Risk of Gentrification 1174 D. Ongoing or Advanced Gentrification 1175 E. Stable or Ongoing Exclusion 1175 F. Super-Gentrification or Exclusion 1176 G. Ways to Work with Rent Control: Tenant Protections, Decontrol Thresholds 1177 i. High-Rent Vacancy Decontrol 1177 ii. Increased Tenant Protections 1178 iii. Code Enforcement and Other 1178 Conclusion 1179 Appendix I: Typology Methodology 1181 INTRODUCTION: THE IMPORTANCE OF HOUSING SECURITY AND COMMUNITY STABILITY
For many decades, economists and planners have debated the value of rent control, staking out opposing sides of the debate with results that are mixed. (1) For the most part, the literature adopts a conventional approach to assessing the effectiveness of rent stabilization ordinances, asking, for a particular city with rent control, how many renters are protected and affordable units preserved, and whether the ordinance dampened housing production. (2) The conclusion is usually that there are some winners (typically long-term residents) and some losers (particularly low-income newcomers). (3)
Yet, it is entirely possible that impacts of rent stabilization vary by neighborhood. Neighborhoods differ in terms of their mix of housing and their trajectories of change. Some are homogeneous communities of single-family homeowners, untouched by rent stabilization. Others have a mix of building and tenure types--for example, apartment buildings with renter occupants may act as a more flexible housing supply. Some are high-income and exclusive, gradually losing their low-income residents without replacement. Others are low-income and gentrifying with new affluent residents. Still other low-income areas are simply churning low-income residents. These differing contexts offer varying degrees of stability and security for their residents.
In a diverse, rapidly changing low-income neighborhood, rent stabilization may cause fewer residents to move out, intensifying competition and increasing rents for the few housing units available. (4) In an exclusive neighborhood populated primarily by affluent residents, rent-stabilized units play a similar role in terms of slowing exit rates, but without creating the same kind of pressure on the other units. Given high land costs in these areas, these units also may become the only feasible way of preserving affordability. At the same time, there may be pressure to convert housing units, whether in single-family homes or apartment buildings, from rental to homeowner tenures.
Neighborhood dynamics also vary depending on regional context. Rent stabilization ordinances are enacted city by city, likely resulting in spillover effects in neighboring municipalities. For instance, to the extent that stabilization reduces churn, and thus housing supply, adjacent communities may experience a surge in demand--and prices. (5) This may then result in conversion from homeowner to rental units, or simply an increase in exclusion as low-income in-movers are priced out.
This Article shifts the analytic lens from examining the effectiveness of rent stabilization ordinances at preserving affordability and supply to surveying how they work in different neighborhood contexts throughout a diverse region--the 31-county New York metropolitan region and its 20 million residents. The analysis provided in this Article develops a typology of neighborhood change, using United States Census data, that demonstrates the extent to which low-income households are being displaced from both low-income and moderate-to-high income neighborhoods. It then couples this typology with estimations of the potential number of rental units that would be affected by rent regulation. This Article finds that over 1.2 million units could potentially be protected; about three-quarters of these are currently affordable at the regional median household income. (6) The majority of the neighborhoods potentially most affected by rent regulation are low-income (i.e. those with a median household income of less than 80% of the regional median). (7) Most of these neighborhoods are either currently undergoing processes of gentrification, displacement, or both; or have vulnerabilities that place them at risk of such change. (8)
By analyzing how rent control works across a variety of neighborhood types, from gentrifying to exclusionary and from majority renter to homeowner, this Article provides a new perspective on how renter protections maintain stable and secure communities. Whether or not rent stabilization ordinances work to preserve affordability, they may play an important role in helping low-income residents achieve other goals, such as upward mobility or a sense of community, while also supporting cities in their goals for local diversity, inclusion, and fair housing.
Part I of this Article provides an overview of the literature on neighborhood change, with a focus on the various forms of neighborhood ascent, from gentrification to exclusion. (9) Part II examines the variation in types of tenure across neighborhoods. After a brief discussion of the methodological approach to analyzing census data, Part III constructs typologies of neighborhood change across the 31-county New York metropolitan region (10) and examines how they relate to the location of renter households. Part IV examines how rent stabilization preserves affordability across different neighborhood types. Finally, the conclusion offers thoughts for further research and implications for policy.
UNDERSTANDING NEIGHBORHOOD CHANGE
Part I.A begins with an overview of theories and evidence about neighborhood change across a variety of communities: from cities to suburbs, and from low-income to high-income to mixed-income communities. Part LB then discusses different policies that have been implemented to stabilize neighborhoods, such as fair share housing, inclusionary zoning, and rent stabilization. It concludes with an examination of existing literature on how these policies, including rent regulations, perform in different neighborhood types.
Theories and Evidence on Neighborhood Change
Understandings of neighborhood change have developed over time. The invasion-succession model of the Chicago school has long dominated scholarship about neighborhood change--it describes a process by which lower-income residents residing in the inner core of the city invade the outer rings and gradually succeed the higher-income residents. (11) Theorized during a period of rapid growth in the city of Chicago, this model describes an influx of immigrants or increase in incomes that will spur the succession process. (12) New competition for land causes shifts in concentric rings or zones, with residents sorting themselves by socioeconomic status into neighborhoods. (13) With the Chicago core increasingly occupied by high-end commercial uses, developers constructed new neighborhoods on the periphery, attracting higher-income residents ready to leave their aging properties in the urban core. (14) Just as they began to provide a lower quality of shelter, these housing units filtered down to lower-income groups, who often overcrowded into the units and hastened their decline. (15)
Whether or not through invasion-succession, the majority of metropolises end up in a pattern of concentric rings or zones: the innermost ring occupied by the commercial and residential renters able to pay the most, subsequent rings occupied by households of a mix of incomes, and the most affluent households occupying the outermost ring. (16) Pockets of concentrated poverty remain and, in some regions, have increased. (17) However, the diversity of many neighborhoods in the urban core is increasing, perhaps due to neighborhood ascent. (18) Somewhere between 14% and 20% of neighborhoods actually ascend in socioeconomic status each decade, and though the majority of these are white suburbs, diverse minority and immigrant core neighborhoods are increasingly likely to see higher incomes as well. (19) Some of this change is due to upgrading by incumbent residents. (20) Another reason for this change is best characterized as gentrification, a form of revitalization that is depicted by both an influx of new investment and an inflow of new people, typically of higher educational and income levels than the original residents, into low-income neighborhoods. (21)
Neighborhood change in the suburbs has garnered relatively less attention from scholars. Some have noted the rise of the polycentric region, where cities on the edge of the traditional urban core contain new concentrations of jobs surrounded by housing. (22) This new centering attracts new upper-income residents, resulting in suburban neighborhood ascent or gentrification. (23) Recent observers are likely to note the decline of the inner-ring suburbs. (24) However, instead of zones of homogeneity, today's inner-ring suburbs appear increasingly diverse. (25)
Neighborhood change also occurs in affluent areas, which may increasingly exclude low-income households as housing becomes more expensive. Despite pockets of diversity, economic segregation has generally increased since the 1970s, and is associated with increased...