Why does NYC have 50,000 ghost apartments?

New York City faces a paradoxical housing crisis where between 25,000 and 50,000 apartments sit completely empty, known as "ghost apartments," despite the city's immense demand for living space. These units are not haunted but are instead locked away due to a collision between outdated building codes and strict rent control regulations. Older buildings require expensive renovations to meet current safety standards, yet rent stabilization laws cap the amounts landlords can charge. When the regulated rent is too low to cover the cost of necessary upgrades, property owners choose to withdraw their units from the market entirely rather than invest in improvements that would exceed their allowable income. The root of this issue lies in how price controls distort landlord incentives and tenant selection. While capping rents might seem like a way to help low-income residents, it often leads landlords to avoid building new housing because construction becomes financially unviable at artificially low rates. Furthermore, these regulations inadvertently cause wealthy tenants to sublet rent-controlled units that were intended for the poor. Landlords prefer leasing to high-income individuals who are guaranteed to pay on time, effectively turning government-subsidized housing into a windfall for the wealthy while leaving those in genuine need without access to affordable options. Even well-intentioned policies aimed at creating affordable housing have been exploited by clever landlords, further exacerbating the shortage of available units. For instance, under Mayor Bloomberg's administration, new developments were required to set aside a portion of their space as affordable housing for recent graduates. Instead of helping struggling students, some landlords placed them on waiting lists only to charge them six-figure salaries while they received rent subsidies for years. This practice highlights how market forces and regulatory frameworks interact in ways that often undermine the original intent of the laws, resulting in a static supply that cannot keep up with a growing population. Ultimately, the existence of ghost apartments and exorbitantly expensive housing is not a result of natural market failure but rather a direct consequence of government regulations clashing with the immutable laws of supply and demand. When the state dictates prices below what it costs to maintain or build properties, landlords rationally choose to stop renting out units altogether. The video concludes that these empty apartments are a symptom of "stupid" government rules interfering with basic economic principles, leaving thousands of homes vacant while waiting tenants struggle to find affordable shelter in one of the world's most expensive cities.