What’s behind New York’s sky-high rents?

Make Me Smart February 24, 2023 Transcript

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Kimberly Adams 

Guess it doesn’t hurt to start off with Jasper action. Hello, everyone. I am Kimberly Adams, and welcome back to make me smart where we make today make sense. Kai is out today and so joining me for economics on tap is the wonderful Sabri Ben-Achour. And thanks for being here Sabri with all of your plants.

Sabri Ben-Achour 

Thank you for having me back. And thanks, everyone, for joining us on the podcast and the YouTube live stream for economics on tap.

Kimberly Adams 

Yes, today we are going to do some news fixes, have some drinks, take a little break, and then we’re going to play our very fun game half full/half empty, but first Sabri tell me what you are drinking. It’s water isn’t it?

Sabri Ben-Achour 

What’s that?

Kimberly Adams 

I was like it’s water isn’t it?

Sabri Ben-Achour 

No no, it’s a it’s a muscle milk. I’m too I’m too lazy to cook so I just make some of these. This was my smoothie from earlier today.

Kimberly Adams 

That’s a large portion.

Sabri Ben-Achour 

Yeah, yeah, I forgot to clean it. So now it just has dried smoothie in it.

Kimberly Adams 

No, it looks like there’s some liquid smoothing in there in the bottom still.

Sabri Ben-Achour 

Let’s say sludge really? What about you? What are you drinking?

Kimberly Adams 

So I was listening to Kai’s story the other day about the business that made the big investment in non alcoholic drinks. And did you hear that? Well, one of the things they were saying is that they make their cocktail sometimes with like part booze and part non alcoholic spirits. And so I decided to try making a Manhattan today using my de-alcoholized bourbon and my vermouth and so this is this is gonna be interesting. It tastes different, but it’s still good. It’s Manhattan-ish. All right, well, then let’s move on to our news fixes Sabri, since you’re the guest, why don’t you go first?

Sabri Ben-Achour 

Oh, yeah, sure. Okay, so, um, I saw this article in Curbed in New York Magazine. It’s called “New Yorkers never came flooding back. Why did rents go up so much? Getting to the bottom of a COVID era real estate mystery.” And I will tell you, I have I have the, like reading attention span of one of my plants. Like I honestly am terrible. But this was a long read. And it was a good read. And basically, to sum it up, the author writes that, you know, we kept on hearing about all these people flooding back to New York and you know, washes of people coming back and so rents, of course, naturally skyrocketed. And he was like, “Well, I actually looked into the population data and found zero evidence of people flooding back. And in fact, if anything found, like a lot of evidence for people trickling out still.” And so then he was like, “Well, why are the rents going up so much?” And what he found were, what he suspects I should say, is that a it’s something called warehousing where landlords withhold units, and this is probably more than like luxury buildings, they withhold units from the market, keep them vacant, just to create an artificial scarcity of supply so the rents go up. And and the other thing is this algorithmic rent setting business that apparently DOJ is investigating were, like, you have a bunch of landlords using the same quote unquote, algorithm. And it’s the same effect as if they all got together and said, “Hey, let’s like coordinate on setting the rent to like the maximum price.” They don’t do that. The computer does it for them is the allegation. So anyway, it is a crazy read crazy read. I mean, he goes into like the sewage data to try and confirm this alleged population growth that he does not find evidence for. It is wild and I highly recommend.

Kimberly Adams 

Yeah, but what are they going to do about it though? Like?

Sabri Ben-Achour 

Yeah, great question. I mean, there is some apparently there’s some legislation in the New York legislature to stop this practice of quote unquote warehousing, you know, where you keep properties vacant? Feel like it’d be very hard to prove that. You know, you’re intentionally keeping something vacant as opposed to like, what if people just don’t want to rent it? But I don’t know what the mechanism for sussing that out would be? Yeah. And then DOJ is investigating that algorithm software thing. So, what about you? What’s your newsfix?

Kimberly Adams 

I have two actually. I mean, I know there’s been a lot of coverage about the anniversary of Russia’s invasion of Ukraine. And, you know, it’s terrible. It’s awful. And I was looking, Gallup has a really interesting collection of various polls, related to where we are in the war. And it’s just a bunch of fascinating charts in terms of, you know, Americans supporting the war versus not. Republicans think that the US is doing too much to help Ukraine, Democrats do not. Ukrainians view on how… on continuing the war with Russia, based on region, and also, you know, how much faith they have in their country and institutions. It seems like everybody’s kind of buckling in for a long conflict. But also, it was interesting that a majority of the people in Ukraine, see NATO and EU membership in their future, which is kind of like one of the things that was an issue at the beginning of this. Like Russia didn’t want, you know, Ukraine and NATO and in these other groups, so it was just an interesting collection of charts. Now, the other oh, go ahead.

Sabri Ben-Achour 

No, I was just, I mean, it was just gonna note remark on the, you know, the politicization of it. I saw, you know, how the sort of approval of the spending is starting to starting to break down along party lines. And it’s just sort of like, I mean, is there anything that does not get politicized these days?

Kimberly Adams 

Yeah, no, there’s not. There’s certainly not. I, well, I don’t know, maybe, maybe not this next one. I hope. Fingers crossed. But seeing what what happens with teaching black history in this country? I guess not. But since we are winding down Black History Month, you know, there’s been all these sorts of honors and notations and emails and things like that. And I got an email from the US Patent and Trade Office. Yes, I’m on their mailing list because of why not? And they have a public search facility that they’re opening in Virginia, where the public can go and search patents by computer, on microfilm, go through old files. And it’s this new facility, and they’re getting ready to rename this public search facility after a patent examiner named Henry Baker. And he was… So patent examiner’s are the people who like when someone applies for a patent, they check and make sure there is an already existing patent and does it conflict and is it original and all these things. So there was a black patent examiner named Henry Baker, who worked there. I guess he lived from 1857 to 1928. And he compiled the first ever list of African American patent holders, to use it as a weapon against racism to prove the Black Americans were also innovators, and creative and just as able to come up with really interesting inventions as anybody else. But what’s interesting is that there was no easy way for him to do this because back then, and even now, I don’t think they don’t really track the race of people applying for patents. And so he basically, you know, turned to people and just started reaching out and crowd sourced this list of Black inventors to try to figure out who of inventors were Black and came up with this list himself. And I thought that was really cool. And they’re renaming the facility after him. So the press release says “Henry Baker’s story teaches us that diverse employee perspectives have always made the agency’s work better,” even back in the day, so there’s that. Yeah, I thought it was kind of cool. Well, that’s it for the news fix. We’re gonna take a quick break, and when we come back, we’re gonna play a round of half full/half empty   You’re not going to dance along to the music with me are you Sabri?

Sabri Ben-Achour 

Oh no, we would lose viewers immediately. If I started to dance.

Kimberly Adams 

I highly doubt that.

Sabri Ben-Achour 

Or someone would call it a medical emergency.

Kimberly Adams 

Okay, well, this is half full/half empty, our game where our very own Drew Jostad gives us the news topics and then we tell you how we’re feeling about them with the positive being half-full, the negative being half-empty. And remember on our last round, we’ll invite the folks on the YouTube live stream to play along and vote as well. And so Drew, let’s take it away.

Drew Jostad 

All right. The Food and Drug Administration is out with guidance that says that plant based milks can continue to bill themselves as milk. Are you half full or half empty?

Kimberly Adams 

Oh, let’s start with our plant guy. You have the biggest smile?

Sabri Ben-Achour 

I’m half empty on that. And I’m not sure why. But I just I for some reason I feel like I don’t know the those almond milkers and I wish… I love oat milk and I love almond milk. But I feel like they definitely like usurped the title of milk. Like those are not milk. They’re just kind of like, pasty or like they’re just like opaque liquids. Like they’re they’re not I guess I’ve been brainwashed by the milk campaign people but I am on Team Cow Milk.

Kimberly Adams 

What do you think we should call the nuts, liquid products whatever. Anyway, what do you think we should call them?

Sabri Ben-Achour 

Well, you know, slurry, nilk, or silk or almond oil emulsion? Those would all be accurate.

Kimberly Adams 

Oh, Lawrence Ubell says plant juice.

Sabri Ben-Achour 

Yeah, there you go. Yeah.

Kimberly Adams 

All right. We don’t have to answer this question today. We’ll turn to the audience. Maybe people will write in they came up with ideas for what to call mocktails as well. So anyway, I am half full actually, because as we saw this was just too difficult. So keep it moving. Alright, what’s next Drew?

Drew Jostad 

All right, along with partners, including JP Morgan Chase and Air Canada, United Airlines has said it’s going to launch a $100 million venture toward sustainable jet fuels. Are you half full or half empty?

Kimberly Adams 

On sustainable jet fuel? I mean, I’m half full on the project. I don’t know that I believe it. I feel like we’ve heard about initiatives like this before without much progress. And the cynic in me is wondering how real it is. But I mean, if it happens, sure. But everybody okay, everyone else on here is empty as well. “Sounds like greenwashing” “seems like marketing or media stunt.” Yeah, yeah. So that’s, that’s where I am.

Sabri Ben-Achour 

I mean, I’m half full on this. The issue that they’re dealing with is that actual hydrogen powered jets are far far far far away. Like the difficulty in you know, compressing enough and refrigerating enough hydrogen to fuel like a jet jet is a major, major technological challenge technological challenge. So, what they’re doing is it’s like, you know, this sustainable jet fuel fuel, it’s the same. It’s fuel. You know, it’s like oil. It’s what we call it because it’s the same, you know, chemical, but they can manufacture it using, you know, you can compose these compounds in a lab. And the theoretically you could do so using energy from hot green hydrogen from hydrogen from wind, from solar and you can piece together these fuel molecules still. Obviously gets burned. And I guess they can do carbon offsets or something. But I don’t actually know to what extent the the production of that fuel is using green electricity. So I think it’s I think you’re right, we’ll have to see how that plays out. But the idea is, you know, practical.

Kimberly Adams 

Okay, what’s next Drew?

Drew Jostad 

Are you half full or half empty on New York City pushing to become a tech hub?

Kimberly Adams 

Isn’t it already? Half full? I think it kind of is already? What? I’m guessing they want it more?

Sabri Ben-Achour 

Yeah, I mean, I’m half empty, just to be difficult. I mean, I support jobs and everything. But you know, they’re not going to build enough housing to accommodate all these people who are going to be making great salaries and will be able to afford higher rents than everybody else. And while I am glad they will be able to experience New York, it’s just you know, there, I highly doubt the housing capacity to host them will be built without the everyone’s rents going up.

Kimberly Adams 

Or people just being pushed out. Yeah, which is what often has happens. All right, Drew what’s next?

Drew Jostad 

Half full or half empty on certain brands of water bottles going viral?

Kimberly Adams 

I saw this story. Did you see one of our colleagues did it for I think it was for the website about why a particular type of bottle water bottle went like viral on Tiktok. It’s, uh, let me click on the link. I remember Hannah did this story. Yes, the Stanley. I guess it was mainly known as like a camping tumbler. And somehow they made it cool for hipsters on Tiktok or something like that. Sure. Why not? Get people to have full all the way for getting people to not use plastic water bottles? Sure. Nope. People don’t like people don’t like this as I see a lot of empties on this. Oh, okay. I sense a little hostility

Sabri Ben-Achour 

I thinks it’s hostility to Tik Tok? Probably.

Kimberly Adams 

Yeah. Okay. Oh, I see people didn’t realize we were talking about a reusable water bottle. Yes. That’s what we’re talking about, a reusable metal water bottle that is not a plastic one. So yes, that’s what we’re talking about. Okay. And are we up to the last round Drew?

Drew Jostad 

Did Sabrina weigh in on the water bottles? Gotta have some rules.

Sabri Ben-Achour 

Oh, I’m half-fully on that. Yeah, I like sustainability.

Drew Jostad 

All right. Yeah, we got the pole next.

Kimberly Adams 

Okay, everybody on the YouTube livestream, get ready and cast your votes for half full or half empty on this last round. But let’s go Drew!

Drew Jostad 

Okay, this one might take a little bit of a setup. But there’s a new feature on some Samsung smartphones, called “custom voice creator” where you can create a clone of your own voice with a quote unquote, AI. And then if somebody calls you, you can type in a text message and have your voice clone read it to the person who’s calling or say it in your voice. Are you half full or half empty on this type of thing?

Kimberly Adams 

I’m going to reserve judgment until people vote but I also have my face. So I mean, I’m still dealing with the bitterness of of having that Siri voice that sounds like me, so doesn’t really matter in my account. Lets see. Well, how are we doing on voting? We have 166 votes. So oh, King Cat points out “It’s great for the handicaped for accessibility.” That makes a lot of sense. Yeah. I’m gonna say I’m half empty, because I don’t know… But now that I’m thinking about the accessibility thing, you know, for people who are visually impaired that’s, I guess useful, but those folks usually already have screen readers anyhow. So yeah, I think this is kind of useless feature and dictation. Yeah. So half, I’m gonna go half empty. What is the poll? Yeah, most people. What about you Sabri?

Sabri Ben-Achour 

Oh my god I am half full because this sounds so chaotic and ripe for disaster. And I just can’t wait to see. I just can’t wait to see the chaos unfold. It sounds like one more step into our dystopian future. And I just, I’m just popping the popcorn every time.

Kimberly Adams 

You know, I can imagine, you know, those difficult conversations that you don’t want to have, like when the person who you’re trying to ghost pr whatever text you and you can just like, send them a message, or they call you and be like, “actually, I don’t want to talk to you anymore,” but do it in your own voice. And so you didn’t technically ghost them. But, you know, yeah, you’re planning… I can see it in your face. You’re planning all sorts of ways to exploit this. You do love mess, don’t you?

Sabri Ben-Achour 

Yeah, that’s why the rest of this room is not shown in theZoom. Among other reasons.

Kimberly Adams 

Okay, well, so you said you’re half full because because you want the chaos.

Sabri Ben-Achour 

Yeah, exactly. Yeah. I’m a chaos monkey

Kimberly Adams 

Okay, well. Chaos monkey correct. On that note, that is it for today. Thank you Sabri. We are going to be back next week. And in the meantime, please do keep sending us your thoughts and comments and questions, your suggestions about what we could call the nut derived fluids, I guess other than nut milk. This is gonna go badly. And then or if there’s a topic that you would like for the make me smart deep dives on Tuesday or question for what do you want to know Wednesday? We have all of the options or you can give us your answer to the make me smart question. All of those things you can send to us at makemesmart@marketplace.org or you can call us. We’re at 508-U-B-SMART.

Sabri Ben-Achour 

Make Me Smart is produced by Courtney Bergsieker. Today’s episode was engineered by Charlton Thorp. Drew Jostad wrote the theme music to Half-Full/Half-Empty. Antonio Barreras is our intern.

Kimberly Adams 

Yes and the team behind our Friday game is Mel Rosenberg, Emily Macune and Antoinette Brock. Marissa Cabrera is our acting senior producer. Bridget Bodnar is the director of podcasts. And Francesca Levy [LEE-vee] is the executive director of Digital. We survived! Yay!