Video summary
The video addresses the paradoxical issue of "ghost apartments" in New York City, where between 25,000 and 50,000 units sit completely empty despite a severe shortage of housing. These vacant properties are not abandoned due to neglect or lack of demand, but rather exist because of restrictive rent control and rent stabilization laws that cap the amount landlords can charge. Older buildings require significant renovations to meet modern building codes, yet when these regulations prevent landlords from raising rents high enough to cover renovation costs, they choose to lock their doors and remove the units from the market entirely rather than invest in necessary upgrades.
Price controls, while intended to help low-income residents, inadvertently distort the housing market by discouraging new construction and encouraging strategic behavior among property owners. When landlords are restricted to artificially low rental rates, they often avoid building new units because alternative investments yield better returns. Furthermore, these regulations lead to a mismatch between policy goals and reality; instead of leasing subsidized apartments to those who need them most, landlords frequently rent them to wealthy individuals or professionals who can easily afford market rates but benefit from the subsidy, while actual low-income tenants are pushed out.
The transcript also highlights how clever landlords exploit affordable housing mandates by placing recent graduates with no income on waiting lists, thereby securing long-term subsidies for themselves while earning six-figure salaries. The speaker argues that the resulting landscape of ghost apartments and unaffordable housing is not a natural market failure but rather the direct result of government regulations colliding with the immutable laws of supply and demand. Ultimately, the video concludes that these policies have destroyed NYC's housing availability by removing inventory from circulation and preventing landlords from maintaining or expanding their properties, leaving the city with thousands of empty units in a desperate need of shelter.
Read the full video transcript
Let's talk about ghost apartments, not
Hana departments which can usually be
fixed by garlic or napal. No, ghost
apartments are empty units in New York
City [music] just sitting idle. There
are between 25 and 50,000 of them.
That's right. In a city with so much
housing demand that I used to live in a
bunk bed inside of a haunted closet,
there are between 25,000 and 50,000
unoccupied apartments. All because of
dumb New York City laws. Older
apartments require renovation to be up
to snuff for New York's complex building
code. But New York also has rent control
and rent stabilization measures which
cap how much landlords can charge. When
landlords can't charge enough to afford
renovations, they don't. So they just
lock the door and take the apartment off
the market 50,000 times. Now price
controls capping how much landlords can
charge you for rent may sound good.
However, if you put that price too low,
landlords won't build new housing units
because they can just make more money
doing other stuff. As New York City's
population has grown, its housing supply
has not. Higher demand and a relatively
static supply has increased prices.
When the government tells landlords they
can only rent stabilized apartments at
artificially low prices, landlords
think, "Uh-oh, that sounds like poor
people. Poor people who may not pay me
my rent." So landlords don't lease their
rent control apartments to the poor
people the regulation's trying to help.
They rent it to somebody like me in a
suit who could have afforded it at
normal prices anyway. That the
landlord's confident will actually make
the rental payment. The end result is
not that the little guy gets the helping
hand. It's that a dude in a suit gets a
subsidy they didn't need. Under
Bloomberg, new apartment buildings had
to set aside a portion of their units as
affordable housing. So clever landlords
would take those graduates that had no
money coming right out of graduation,
put them on the list, and then those
same folks would get rent subsidized for
years, all while making six figures.
Ghost apartments and expensive housing
units are not a market failure. They're
just stupid government regulations
colliding with supply and demand. And
supply and demand is never optional,
just like ghosts.
[music] Hey, you want a shot at a
million dollars? Okay, great. Take this
threeinut quiz on why America is less
affordable.