Desperate All Over

When it comes to housing, the nation's largest and wealthiest city lives in an Alice in Wonderland world. Mostly since World War II, federal, state and city governments have underwritten some $8 billion worth of housing construction in New York City -- enough to accommodate the entire population of, for example, Baltimore or Cleveland. Yet at the same time, New York's housing scarcity has not only persisted but worsened. In the hard marketplace of supply and demand, that means soaring rents.

Tenants by the thousands are fuming at raises in their rents as leases come up for renewal on Sept. 30, the traditional date for residential lease expirations. Many landlords, says Frederic S. Herman, the city's commissioner of rent and housing maintenance, are demanding "increases of 40%, 50% and 60%--and a few in excess of 100%." In scores of instances, the exorbitant hikes amount to nothing less than an old-fashioned eviction. "It's frightful. I can't find anything that I can afford," says Patricia Oberle, a young Manhattan medical secretary. She has been looking since February for another place to live because the rent on her present one-bedroom apartment in an elevator-serviced building on the upper East Side is about to jump from $235 to $315 a month.

Moving Out. Rents are currently climbing in several major U.S. cities. Increases of 8% to 10% have become commonplace this year in Washington, Pittsburgh, Miami, San Francisco and parts of Los Angeles. For the U.S. as a whole, however, rents have risen only 4% since 1966, according to the Bureau of Labor Statistics. New York, however, is a very special case. There the apartment shortage and the rent squeeze have become so bad that many office workers, professionals and young executives are reluctantly moving out to the suburbs, an exodus that bodes ill for the city's struggle to retain its middle-class population. President William J. Molloy of Molloy Bros. Moving & Storage, the largest affiliate of Allied Van Lines in the New York area, reports a 25% increase this summer in families moving out of Manhattan. "Business is so heavy we can't handle it," says Molloy.

The furor over soaring rents involves only one-third of New York's 2,100,000 privately owned apartments. The rest remain subject to rent control, to which New York (alone among major U.S. cities) has clung since World War II. Landlords of rent-controlled apartments are every bit as unhappy as tenants of uncontrolled units. Squeezed by rising costs for taxes, labor, maintenance and anti-pollution equipment demanded by the city, increasing numbers of owners are simply abandoning structurally sound, though rundown, controlled buildings. By owners' estimates, some 12,000 buildings containing 350,000 apartments have thus been left to rot in the past few years. Landlords are so upset at the shrinkage of their profits that last week eight organizations representing 25,000 owners begged the city to buy their buildings at "bargain-basement prices." Said Leon A. Katz, spokesman for the group: "Business is so bad that we want to get out. We're absolutely desperate."

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