“Death by a thousand cuts” is a useful expression.
In New York real estate, it applies to many things, from rent-stabilized buildings to the overall health of the housing market.
Each cut is tolerated because by itself it is not fatal, but the cumulative effect is.
For the politicians and regulators inflicting the wounds, the pain of each one is seen as worth it because of some theoretical benefit. No one considers them in totality.
Take Local Law 152. In the name of preventing explosions, it forces hundreds of thousands of buildings to have a licensed master plumber inspect their gas piping every four years.
Although inspections cost $600 to $1,100 apiece (mostly because of the paperwork involved), outrage at the 2016 law has been limited. It’s just one more cut.
What upsets people is the collective burden of mandates such as Local Law 152, Local Law 11, Local Law 429 and Local Law 925.
These all have a safety benefit, but no one knows how small it is because the City Council doesn’t do a cost-benefit analysis before voting on anything.
It’s not because studies cost money. It’s because they would force Council members to confront uncomfortable questions. Is $10 million too much to spend to save one life? What about $50 million? Or $100 million?
Most would say, “You can’t put a price on human life.” But you can. In fact, it’s fundamental to regulation and policymaking.
Requiring expenditures on things that save few lives actually costs lives — because it prevents that money from being spent on something else, such as affordability.
Think of people in crowded apartments who died of Covid or are undernourished because they spend too much on rent. Unlike fatalities from gas explosions, deaths from high housing costs are hard to count.
One reader did some math on Local Law 152. (Disclosure: Over five years the law has cost my four-unit condo building $1,200.) He noted that most of the city’s 300,000-plus three-family buildings are heated with gas and thus subject to the law, but single- and two-family homes are not.
“The boilers are functionally identical to the ones in one- and two-family homes and the piping systems are similar,” he wrote. “Inspecting these buildings is around $1,000 every four years, which means roughly $75 million [per year] transferred from small landlords/families to the master plumber council.”
(Support from plumbers’ unions helped get Local Law 152 and other bills enacted.)
If these bills were truly effective, their costs would be offset by lower insurance premiums because they would significantly reduce the number of gas explosions. But explosions are extremely rare and thus a non-factor in the cost of insurance.
“I can’t imagine that Local Law 152 is remotely cost-effective considering that the similar one- and two-family buildings are fine without it,” the reader wrote.
And why did lawmakers exempt those buildings? Not because of any cost-benefit analysis.
Rather, elected officials do a political analysis and conclude that owners of buildings housing the fewest people are more important to their re-election than multifamily owners. The dividing line between these two types of buildings is set by the state’s Multiple Dwelling Law.
Suturing these cuts one by one — that is, getting legislators to amend or roll back measures like Local Law 152 — would be hard. Perhaps an entire class of injured buildings could be healed at once by changing the Multiple Dwelling Law. Someone should do an analysis of that.
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