This Megabank Lawyer Pays Lower Rent Than You For No Good Reason

There's a brief and enraging—to New York City's renting class, at least—aside in Constance Rosenblum's Sunday New York Times Real Estate piece about committed couples who live apart. In describing Michael Kenny and Ingrid Doyle's two-apartment love affair, Rosenblum mentions that Kenny, a 62-year-old "lawyer with Citigroup," has for years held on to his "rent-stabilized two-bedroom in a rehabilitated tenement on West 116th Street in South Harlem...for which he pays under $2,000 a month." Let me put that in context.

1) "Under $2,000 a month" is a very, very low rent. The median rent in Manhattan is more than $3,000 per month. The average two-bedroom apartment in Harlem is $2,539. Michael Kenny pays a below-market price for his housing.

2) Rent stabilization is a very complex and arbitrary set of codes in New York City that, among other things, prevents landlords from sharply increasing rents on certain qualified units. It was explicitly designed in the 1960s to ensure a stock of affordable housing in the city for working families.

3) Michael Kenny is a senior vice president at Citigroup. He attended Harvard Law School and graduated from Brown University. According to GlassDoor.com, Citigroup pays its senior vice presidents in the New York City area anywhere from $114,000 to $280,000, with an average annual compensation of $184,511.

Michael Kenny does not need rent stabilization. The median income in Manhattan—the number that half of Manhattan's workers are above, and half are below—is $67,000. Michael Kenny's compensation exceeds that by a minimum of 70 percent, and perhaps by more than 300 percent. Given his occupation as a corporate lawyer for a $155 billion global banking conglomerate and his pedigree as a graduate of two Ivy league schools, he is by any measure a verified member of the city's elite.

And yet he pays less than $2,000 per month by virtue of a set of regulations designed to prevent landlords from sharply raising rents on people who are, by birth or by circumstance, excluded from that elite. There are 1,025,214 rent-stabilized units in New York City, constituting nearly half of available renting stock. While there are no reliable numbers on vacancy rates or turnover among rent-stabilized units, we know that Manhattan's overall vacancy rate is between 1 percent and 2 percent, and that tenants in rent-stabilized units hold onto their apartments, on average, for twice as long as occupants of non-stabilized apartments (they'd be stupid not to; Kenny has been in his since 1997).

All of which means that there is fierce competition for the apartments specifically designated for people who would otherwise be priced out of the market. Last year, the Times reported on how difficult it is to find one:

“I have people all the time who come to me and ask me to find them a rent-stabilized apartment,” said Alexis Fleming, a broker at Citi Habitats. “I tell them good luck. It is a needle in a haystack.”

In seven years, she said, she has rented just seven stabilized apartments.

More than 10 years ago, New York magazine chronicled some of the more egregious injustices the rent-stabilization scheme promotes:

A not uncommon story is that of the couple who live in a brownstone on East 87th Street owned by a client of real-estate lawyer Howard Stern. The couple maintain a rent-stabilized one-bedroom for $821 a month — which has allowed them to purchase a spacious retreat in Columbia County. "The wife keeps her driver's-license address and car registration upstate to take advantage of lower insurance rates," Stern says. "The husband maintains his driver's license and makes sure he votes in Manhattan to take advantage of rent regulations." They're the archetypal Manhattan couple, fingerpicking the system with the delicacy of a Segovia. "And the law permits it," Stern adds. "Holidays and weekends, they go up to their country home, which is in effect subsidized, because their rental is nowhere near what the market rate would be."

Indeed, property records show that, as of two years ago, a Michael A. Kenny who lives on 116th St. in New York also owned a (relatively modest) 4,270 square-foot bungalow in Chicago.

Michael Kenny should live where he wants, and pay whatever is required. (Check that: He, like all Citibank executives, should be housed on Randall's Island for re-education after their bank is nationalized and returned to THE PEOPLE.) But any system of rent regulation that affords a Citigroup senior vice president 16 years of artificially cheap housing while throwing people who make far less money at the mercy of the market is perverse, backwards, and hopelessly out of date. Whatever scant, ham-fisted, bureaucratically fucked up help this city is willing to help people who aren't rich and powerful should be directed exclusively at the people who aren't rich and powerful.