Physical Address

304 North Cardinal St.
Dorchester Center, MA 02124

Michael Lewyn

Michael Lewyn

  • Joined: May 21, 2025
  • Articles: 123

So Much For The Foreign Oligarchs

One common argument against new housing in high-cost cities is that the rise of global capitalism makes demand for urban housing essentially unlimited: if new apartments in Manhattan or San Francisco are built, they will be taken over by foreign billionaires in quest of American real estate, who will use the apartments as banks rather than actually living in them or renting them out. It seems to me that this argument would be more likely to be true if a huge percentage of New York’s housing was used by foreign billionaires. But a recent article in Politico New York suggests otherwise. The article says that 89,000 New York apartments are owned by absentee owners (many of whom presumably rent them out).  However, most of these apartments are not owned by Russian oligarchs or other global capitalists; for example, the co-op unit I rented a few years ago in Forest Hills (market value around $300K) was owned not by a foreign oligarch, but by the building’s former super. Presumably, the condos and houses likely to be owned by wealthy foreigners are the most expensive ones.   So how many of these units were worth $5 million or more.  Only 1554- a drop in the bucket in a city of 8 million people. And how many of the units were worth over $25 million?  Only 445. So super-rich absentee owners are few and far between, and thus probably do not affect housing supply very much.

Vouchers, Sprawl and Trade-Offs

Currently, the American public school system is a sprawl-generating machine: urban public schools are less appealing to middle-class parents than suburban public schools, causing parents to move to suburbia. This result arises from school assignment laws: because students must attend school in the municipality of their residence, residents of the most diverse municipalities (usually central cities) must attend diverse schools.  By definition, diverse schools have lots of children from disadvantaged backgrounds.  Because children from disadvantaged backgrounds often learn less rapidly than middle-class children, these schools quickly get a reputation as “bad” schools, causing middle-class parents to flee to suburban schools that are more socially homogenous. The common progressive answer to this problem is to fund urban schools more generously: this strategy has not, when tried, succeeded in bringing middle-class parents back to urban schools.  For example, in 1990s Kansas City, federal courts forced government to fund urban schools far more generously than suburban schools: nevertheless, test scores barely budged and urban schools continued to lose middle-class and white parents.  Even successful urban charter schools (such as New York’s Harlem Success Academy) have failed to bring back middle-class parents. A more market-oriented solution to the problem of sprawl-generating school systems is to break the link between residence and schooling, so that city residents would not be limited to urban neighborhood public schools. One possible option is some form of a voucher system.  Under the purest form of a voucher system, parents who choose to avoid public schools would be given public funds to pay the cost of private schools. Under such a system, parents would have little reason to avoid city neighborhoods: they could stay in the city, and their children could attend private schools for the same amount of money that they would spend on public schools (that is, zero).  Such voucher systems […]

Rent Control: A No-Win

In an otherwise excellent article on NIMBYism and luxury housing, affordable housing consultant Rick Jacobus writes: “economist Anthony Downs reviewed the published studies and found that while ‘stringent’ rent control imposed over a very long time had reduced private apartment construction in the UK, there was ‘no persuasive evidence that temperate rent control ordinances inhibit the construction of new rental housing’.” Since I am familiar enough with Downs’ work to know that he is not a flaming radical, I was a bit surprised to read this. So I looked at Downs’ paper.  Downs is generally critical of rent control, writing that while rent control transfers resources from owners to tenants, “the total net amount of benefits received by the tenants is usually smaller than the total net amount of costs imposed upon the owners; hence, rent controls are not efficient.” (p. 26). Downs adds that “the experience of the United Kingdom strikingly confirms that stringent rent controls reduce new construction of rental units in the long run…the share of all housing in the United Kingdom provided through privately owned rental units dropped by about 85 percent from 1950 to 1986.” (p. 18). Then he discusses the U.S. experience, contrasting New York City’s stringent rent controls with the more moderate controls of Los Angeles. Downs cites a Rand Corporation study that “estimated that 1968 rents under New York City’s stringent ordinance averaged 57 percent below what they would have been without controls [while] 1990 rents under Los Angeles’ temperate ordinance would average only 3.5 percent below what they would have been without controls.”  (p. 25).  This small gap “helps explain why Los Angeles has not experienced many of the adverse effects generally associated with more stringent rent control ordinances.” In other words, “temperate” rent control ordinances don’t do very much to […]

Trending now

A self-defeating argument
Texas MUD
gentrification
Only 2 Ways to Fight Gentrification (you’re not going to like one of them)
The problem with “public” transportation