The Rent Freeze Is the Oldest Arrangement There Is

Elvia is a body in 4B of a six-unit walk-up I own in Sunset Park, Brooklyn. She is 34 and a home health aide on the Medicaid wage, and the late shift gets her home at 11:40 p.m. to a living room where her 2 children are asleep on a futon she pulls out for them every night. The ceiling above her kitchen has been pregnant with the leak from the unit above for 3 months. I’ve known. I’ve done nothing. The Lord is close to the brokenhearted. I haven’t priced the distance. The rent she hands me on the first is the same rent your own tenant hands you on the first, and the lease she signs is the document you keep in your tax file — the one that fixes my income and frees my conscience in the same paragraph. Sit down. I’ll walk you through the arithmetic. You won’t enjoy the lesson, but you’ll remember it.

The editors at National Review wrote this week that Mayor Mamdani’s rent freeze will destroy the city. They cite the Swedish economist Assar Lindbeck about bombing. They mourn the landlord’s margin. They think a rent freeze is a disaster. They’re half-right. The freeze will destroy the buildings. That’s the entire point. But the editors think the destruction is a loss. It isn’t a loss. It’s a transfer.

The legal rent on Elvia’s unit is $1,237. The board froze it for the term of her lease, and at the renewal after that, and at the renewal after that, for as long as the order holds, which is the only horizon I price. My obligation to maintain the unit, by contrast, is whatever I decide it is. The board didn’t touch that line. A plumber’s visit and a patch would’ve cost me $290. I kept the $290. Across the 84 months of Elvia’s expected tenancy, that’s $3.45 a month, or $0.115 a day.

Eleven and a half cents.

That is the price of a kitchen ceiling. The lunch I bought on the day I made the decision was $14.00. The parking meter I ran over by 9 minutes on the way to the restaurant was $0.50. The meter, you’ll notice, was optional. The ceiling was not. I paid the meter. I’m keeping the ceiling.

Watch the gap, because the gap is the lesson. The $14.00 was a meal. The $0.115 a day is what a human being’s plaster falling into her pasta water while her children sleep 10 feet away costs me. The board didn’t balance these for me. The board took the balance off my plate. I’m grateful in a way I don’t have to perform.

The apostle Peter put it this way, and I’ve read it carefully:

Servants, be subject to your masters with all respect, not only to the good and gentle but also to the harsh. (1 Peter 2:18)

The verse doesn’t command me to fix the plaster. It commands her to take the wet ceiling. The board, in its wisdom, has made me the harsh master by statute. I wouldn’t have chosen it. The board chose it for me, and I accepted the choosing the day the vote came down, and I haven’t had to revisit the question.

Here’s the principle the case was only an example of. Every contract that fixes one party’s price without fixing the other party’s duty is, in the long run, a contract that prices the duty out of existence. The freeze isn’t a regulation. The freeze is a discharge. I am the long run. The man who bought the building next door in February is the long run. The woman who holds the corner is the long run. The cap rate on the block is rewarding, and I haven’t priced what an empty block is worth, because the block isn’t empty yet, and the cap rate’s the only figure I look at.

The lease in your own tenant’s hand is Elvia’s lease. The key in your own tenant’s pocket is Elvia’s key. Your own lobby is mine. The ceiling above your tenant’s kitchen is the one above Elvia’s, and the $290 you kept is the $290 I kept, and the next time the stain spreads across your own popcorn you will do what I did. You will check the cap rate. You will keep the figure. You will read Peter on Sunday and not let it touch you.

Same arrangement, larger floor. Elias is a work-order closer on the 400-unit portfolio I manage through a shell in the Bronx. He spends his shifts scraping black mold off the baseboards of rent-stabilized apartments with a putty knife, because I wouldn’t spend $14 a month on the biocide spray. The bleach he uses instead burns his corneas, and the drywall dust settles right into his lungs. I hold the management contract. The mold is on his lung tissue. The margin is on mine. The charming pre-war one-bedroom your daughter is trying to lease is perfectly safe for you, because Elias is the one breathing for it.

The N95 mask Elias needs costs $1.15. The biocide spray costs $14 a month per unit. I declined both. Across 400 units, that’s $5,600 a month. That’s $67,200 a year. I kept the $67,200. I added it to the distributed cash flow. Scripture anticipates the harsh master. It does not authorize a repair budget.

Now, the part the op-ed missed. When the rent was high, the tenant paid for the maintenance with their wallet. When the rent is frozen, the tenant pays for the maintenance with their body. The physical body replaces the financial body as the sink for the deferred capital. This arrangement predates the freeze, the building, and you. The building was always going to eat someone. The only question was whether it would eat the tenant’s wallet or the super’s respiratory system. I prefer the super, because the super’s medical bills are absorbed by the state. I have no maintenance obligation. The public’s taken it on.

The 1834 Poor Law Commissioners put it more plainly than I can:

“The situation of the pauper, after all, must not be made really or apparently so eligible as the situation of the independent labourer of the lowest class.”

They were pricing a different kind of roof in a different kind of century, but the arithmetic is the arithmetic. The relief must be worse than the work. The maintenance must be worse than the decay. So I let the mold grow. I let the pipes sweat. I make the work of living in the building harder than the work of dying in it.

Colder basement, next building. Darren is a boiler-tender on the Brooklyn portfolio I acquired last November. Same arithmetic. He spends his shifts in the sub-level welding the cracked steam pipes without the $280 asbestos abatement kit. The friable dust coats his throat. I kept the $280. I kept it again when his cough started echoing in the stairwell. Two is a coincidence. Three is when the anomaly becomes the algorithm. The decay isn’t a byproduct of the freeze. The decay is the product.

I’ve priced the decay. The buildings will fall. Someone will manage what remains. I haven’t checked the city’s procurement roster to see who bids on the rubble. I don’t need to. The quarterly distribution cleared on Tuesday. The board’s next meeting is on the eleventh. I’ve already cleared my calendar. The mold is still growing.

Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.