Curious what you think of rent stabilization

I could live with #1. Of course if a family member moves in 2 years prior, etc. then that is a co-tenant of record.
#2 could work but we have to up the property taxes of the owner by he same amount.
#3 is fine too but them the property taxes, sewer bills, etc have to also increase 10% per year. Also the landlord has to pay a minimum wage increasing 10% per year.
#4 eliminate courts? No. Landlords can't be trusted.
Also no changes unless all violations are cleared and fines paid.

I would be in favor of phasing out rent stabilization and ending it completely. Here are a few ideas to reform it:

- end succession rights
- put time limits on it
- reset rent to prevailing market rate periodicially
- make entry into program a lottery
- institute strict income limits with yearly check of tax returns
- don't allow people with second homes to participate

We can talk all day about the unfairness but until the voting bloc of people mad because they are getting cheated is bigger than the bloc of those who get benefits, our populist politicians are only going to keep expanding the laws.

The best chance of ending it in my view is by getting a court to rule in a way, or a local body pass a regulation that makes it so unsustainable that state or higher government has no choice but to fix it. That or if investors stop building only billionaire units and flood the boroughs with enough new smaller units to end the technical "housing crisis". Chance on both of these are close to nil.
Thoughts?

Let's fix unfairness in salaries and wealth too. And be sure that everybody owns real estate in equal proportion: one man, one unit of property. (The ladies can form an auxiliary social organization.)

Or if you really can't handle a fair system based on total equality for everyone, let's make it height-based.

I'm so happy we're on the road to fairness.

And who better to propose fairness than a greedy obsessor who bought his apartments on the cheap because of the DHCR-overseen rents?

Reminder: we have rent regulations because the free-market approached failed. Epicly. (But not so much as in Detroit, Chicago, Baltimore, Philly, etc., where they failed to the point of near-obliteration of the cities themselves, which didn't have the foresight to implement rent-regulations in the long term. Guess which cities did? Just draw up a list of thriving US cities and there you go.)

by now, all owners know what they bought into. any significant changes are windfalls to those owners. whether or not there is any benefit beyond that is subject to debate.

there are so many examples of government programs that benefit very few...

As Alan noted, rent regulation was the reason NYC was able to to sustain a middle class when most other cities lost it entirely. Today, rent regulation is all that stands between New York being a city of six and (more and more) seven figure condos and NYCHA housing (where they are no trying to build condos). Yes, end succession rights unless the "successor" can prove s/he never left home except for college or military. But keep the seniors, and many younger people as well (maybe not the "I arrived five minutes ago from Omaha on Daddy's dime and now I'm going to drink organic coffee and make the world mine through social media" set but for them too bad, so sad) in the affordable homes for which they have worked hard, built families and been the backbones of communities. Only in New York can the last be said about renters--because of the security of rent regulation.

And yes, NYC landlords purchased properties based on their value with rent-regulated apartments, .

At this point its sort of mental masturbation because as pointed out most properties were purchased with RR baked in, and now it would just be a windfall. I tend to agree on the social issues side that it saved NYC. And now I really doubt deregulation would create a decrease in rents in Manhattan or Prime Brooklyn (which is pretty much what everyone here cares about) because vacancy rates are so low the market would simply absorb deregulated units at normal rate.

All the successor proposals are essentially what the succession rules are now, anyhow. It's not like a long lost cousin in Alabama can simply succeed a lease.

walk me through your math on this "windfall" to landlords if stabilization goes away.
Wharton and MIT have both done studies that are specific to NYC stabilization. They both independently conclude that rents go down in NYC if we eliminated stabilization. And conceptually to me it seems like common sense that rents go down because supply of bedrooms goes up.

More than half of rental apartments are market rate - and many stabilized apartments rent for market, near market and even above market. It's clear market rate rents go down with the elimination of stabilization and it's clear that some stabilized rents certainly will go up. But overall, rates go down which in the end hurts landlords as a whole. It's the reason we still have stabilization. Because the big Midtown based landlords would get crushed if stabilization were to go away.... so I just don't get your math..

I'll add that as a landlord - should I reap a "windfall" from the elimination of stabilization I'd be happy to pay it back via property taxes. I'm not looking to get rich off the elimination (I'm looking to get rich, but I don't need to get rich that way) - what I'm trying to do is fix the problem. I'd actually pay money if I had the power to not renew the lease of tenants who pee in my halls, or sell drugs, or break my front door lock, or who are always late on their rent, or who play loud music and make life hell for their neighbors, or who hoard, or who have 10 people living in a one bed, or who get their apartment raided and have illegal guns confiscated, or who have OCD and call our office for the most minor infractions, or who call about heat when their apartments are 72 degrees.... you get the idea....

but the main reason to eliminate stabilization is that it's too expensive to oversee and most of the benefits goes to wealthy Manhattan tenants - most of the burden is born by 20 somethings with tens of thousands of student debt....

Rents would definitely go down (from what they would be otherwise) if a million stabilized apartments were returned to the market. If you look at a graph of the distribution of rents in NYC, it is clearly a 2-tier system, as opposed to a single normally-distributed graph.

Whenever the vacancy rate ticks up, we see a levelling off or slight reduction in rents. Ending rent stabilization would create a larger vacancy rate, significantly lowering prices, and allowing marginal renters who have been priced out to enter the market.

Removing the barriers to creating new housing supply and improving transportation would also go a long way towards alleviating the problem. There is no reason why housing in NYC should be so much more expensive than in other major cities.

> More than half of rental apartments are market rate

Actually I believe only 39.1% of rental apartments are market rate. That's one reason that the rent is so high--everyone must fight for that 39.1% of the market, so they get bid up.

As usual I agree with Alan Hart and c0lumbiac0unty. Furthermore I have no idea why we would trust a study from MassTech.

But people who have bought property recently for investment, need the high rent to cover their mortgage and other costs....if the rent went down, they would not be able to cover the current cost of their property

Let alone Edith Wharton ... her characters are exactly the ones who would replace 20 real people living in a 7000sf brownstone with a solitary family of five (as has been the real-world trend when those units are deregulated).

I love those "studies" by dismal scientists with ideological axes to grind. They completely ignore the actual deregulation in lots of cities (Boston, Cambridge, Frisco, etc.) where -- SURPRISE! -- rents skyrocketed as controls were removed. And those cities -- London, Moscow, Tokyo -- where there are no rent regulations.

I especially love that they assume a steady rate of occupancy by headcount in the free-market world. Good socialists, allocating space fairly. Maybe banks will be able to pay lower wages to investment-banking figures once they move a few of them straight from the frat house into (someone else's) Granny's classic six. And Bill and Melinda and their two kids can move into a 1300 sf three-bedroom as well. Fair.

Fortunately, Jazzman is concerned with the costs of compliance mechanisms. Fortunately, he can lobby for those costs to be borne directly by landlords. Taxpayers' superhero!

Here is a link for the windfall at the more simple residential level:

http://streeteasy.com/building/23-east-81-street-manhattan/4

Prime location and building, condo, full floor, etc, at ~1K / sq ft. Low price reason? RR tenant, so there's a huge discount. The price has baked in the fact that the buyer may not see the unit for his/her entire life. If RR goes away, the value of that unit doubles and that's the windfall. Some would argue that was just part of the risk/yield on investment the buyer assumed, but the reality is everyone knows RR is not going away with the gesture of a hand.

All the studies are kind of garbage and you can find just as many supporting opposing views, as noted above. If you look at hard and proven empirical evidence, though, you'll see cases like prime Boston area where deregulation had no impact on rental prices.

Ugh Edith. That screeching voice. Archie!

all the argument in this tread that it is a windfall to the landlord are mute. again - if you're right and there is a windfall we are assuming for this argument that the windfall is given to all residents as the landlords would pay an increased property tax.

So let me restate my question - if rent stabilization were to be phased out over years by adding a 10% annual rent increase - noting that ANY WINDFALL TO THE LANDLORDS would be paid to the City via increased property taxes - would you support the 10% annual increase (which will ultimately phase out stabilization and the need for HPD, DHCR, a separate housing court etc and would allow landlords to evict bad tenants/neighbors)?

They are definitely not mute.

you have created a hypothetical that has no basis in reality.

how could the windfall to the landlords be calculated in any real world scenario?

why should the city receive this benefit rather than the tenants who are being displaced?

for every scumbag tenant, how many scumbag landlords are there?

>So let me restate my question - if rent stabilization were to be phased out over years by adding a 10% annual rent increase - noting that ANY WINDFALL TO THE LANDLORDS would be paid to the City via increased property taxes -

so you propose that rents across the city increase as a way to fill budget holes? Exactly how much money does the city need? Raising taxes and raising the cost of living on ordinary New Yorkers is not the solution.

>why should the city receive this benefit rather than the tenants who are being displaced?

Exactly. As you can see, my politics are spot on with c0lumbiac0unty.

The solution to whatever problems rent stabilization might cause is obvious: restore all apartments to Rent Control.

Either that or we should make all of the existing apartments larger.

Here is Tom Hagen’s Plan

Today is April 17, 2014.

On April 17, 2024, all non-free market apartments will become free-market apartments. All leases will be automatically extended (if not terminated before) till 4/17/24. On this date (if not sooner), all apartments will be eligible for market rate rents.

All laws currently in place will remain in place till that date (succession rights, maintenance requirements, reporting requirements etc.).

RST/RCT in exchange for this fixed termination date will be given a stay or a freeze on the current rent. The next 10 years, the rent will be the rent of today.

Owners of Rent-Regulated Apartments will pay additional property taxes EACH year for the next 10 years till all rent regulation is phased out. In addition, should an apartment enter the free market prior to the termination date, the taxes abatements on that unit will be phased out immediately.

Basically you have 10 years to arrange for affordable housing.

I don't think people with second homes should be allowed to remain under the protection of rent stabilization. That is just ridiculous.

Having RS rents rise 10% per year accomplishes the same as decontrol...only slower. People will be displaced from their homes of 10, 20, 50 years (or more) to be replaced by five hipsters living off Mom and Dad or an investment banker couple. Who is more valuable to our city? Sorry but housing policy is social policy, especially in New York. And to anyone who buys investment property here and doesn't realize it...caveat emptor.

Native,

No one is more valuable to the city. Next question.

Having RS rents rise 10% per year accomplishes the same as decontrol...only slower. People will be displaced from their homes of 10, 20, 50 years (or more) to be replaced by five hipsters living off Mom and Dad or an investment banker couple. Who is more valuable to our city? Sorry but housing policy is social policy, especially in New York. And to anyone who buys investment property here and doesn't realize it...caveat emptor.

While I bet we each know one person who was helped to be an academic or an artist because he inherited his parents' rent-stabilized lease, the supply of those apartments has been so thoroughly reduced over the past twenty-five years that ... decontrolling the ones that remain won't make any real difference to the rest of us.

For one thing, lots of the apartments left in the stabilization system are fairly small, so decontrol wouldn't magically generate thousands of new apartments with two bedrooms and two baths south of 96th street. (If you don't believe me, check out Table E here: http://furmancenter.org/files/publications/HVS_Rent_Stabilization_fact_sheet_FINAL_4.pdf).

But I guess it's a change of pace from talking about charter schools.

ali r.
{downtown broker}

cc/fieldchester- -

Most of the increased burden gets placed on rent stabilized tenants in Manhattan who are older and wealthy - I don't have an issue with that and in fact it's one of the points of the change - the rich should pay what everyone else is paying.
A slow decontrolling of rents flattens out the inequalities - it takes the burden off of 20 something and displaces it more even to older residents (who are also the wealthy ones).

Increased property tax revenue would mean lower income tax rates. But again - I don't think the City would get a windfall in new property tax revenue. I think their property tax revenue will go down.

Jazzman, what is your definition of wealthy?

front_porch,

I disagree and Manhattan has such a WIDE gap in median rent that it would greatly change the market.

In 2011, there were 284,089 rent regulated units. The Furman study doesn't indicate how many market rate apartments are in Manhattan. Let's assume 48.4% (Rent Regulations % total in Manhattan) of the market rate supply are in Manhattan or 411,303 apartments.

The gap between the median market rate apartment is $ 2,625.00 and rent stabilized apartment is $1,295.00 . That is a difference of $1,330.00 per month.

In you release these 284,089 rent regulated units in Manhattan the gap in median rent is so great that it would be DRAMATIC. Even if you released 10% of the supply every year (28,400), the market rate rent would dramatically drop due to the increase supply.

My guess is the average rent stabilized tenant might not be able to afford the rent if you increased it 50%.

>My guess is the average rent stabilized tenant might not be able to afford the rent if you increased it 50%.

So if you removed the average rent stabilized tenant from the market because pricing exceeded their ability to pay, how many of these apartments would find homes? How would supply meet demand? Who would be the new tenants?

But Consigliere, you're making a lot of assumptions -- one of which is that a market-rate apartment is an apple, and a rent-regulated apartment is an identical, but cheaper, apple.

But there are many different kinds of apples; for example, 121,000 of those Manhattan apartments are in "non-Core Manhattan." Now it can be argued that if you deregulate apartments in Inwood, you'll still affect the prices of apartments in Greenwich Village, but I would argue (with full apologies to Inwood) that one reason that market-rate apartments in the Village are so expensive is that the people who want to live there don't want to live in Inwood in the first place.

ali

Thanks for simplifying to apples. Most of us didn't understand when we were talking about apartments. What's a front porch? Do they have them in Manhattan or do you have to go to Inwood or C0lumbiaC0unty?

Jazzman,

Not all older people are wealthy or even comfortable. Many seniors live below the poverty line and many more receive SCRIE benefits because their household income is below $29K. I don't have the numbers at my fingertips but I'm guessing more seniors in rent regulated housing ( even excluding NYCHA and 202 units) have incomes beneath the market median than above it. If rent regulations are removed where are these people supposed to go? Their earnings are not going to increase. To homeless shelters?

Jazzman, how many of your rent regulated tenants do you consider wealthy?

NativeRestless - I would support the continuation of the SCRIE and DRIE programs - the poor elderly and the disabled should be housed by the taxpayers.
Certainly the median income of the elderly will be below the Citywide median because so many are retired and not working (thus they have little income). But the median net worth of the elderly is SIGNIFICANTLY higher than the median net worth of Citywide residents. Income is only one metric that should determine a persons ability to pay rent.

Note that, BY FAR, today's elderly are the richest generation in the history of our country and, BY FAR, 20 somethings are the poorest generation. Our housing policy favors the rich/elderly and shifts the housing burden on the poor/20s.

fieldschester - my definition of wealthy is someone who makes more than $100k/year or someone who has $300,000 of investments. All of these people can/should pay market rents.

My properties are mostly in Harlem/Bronx -I don't think any of my tenants in the Bronx are wealthy - but note that most of them pay close to market rate.

In Harlem I would say about 33% of my stabilized tenants live in households where the income is more than $100k year - few of them would have wealth of more than $300k. I would say about 33% have the government pay their rent. And the rest work but make less than $100k/year.

I think it's important to note that landlords realize that if we were to deregulate everything we would need to keep most of our tenants in place. There are 3,000,000 people living in stabilized housing. 20 of our 50 states have populations with fewer than 3,000,000 people. If we were to just kick every stabilized tenant out we could never fill our vacancies. Where would the 3,000,000 new tenants come from? How would we ever renovate that many apartments?? How would the City ever process that many building permits etc etc.

The change would have to be gradual. It obviously would create a lot of construction jobs as old, tired apartments (forsaken in some cases) would need to be renovated but there are limits on the amount of skilled workers. We just don't have enough electricians to renovate even 100,000 units in a year let alone 1,000,000. But there will be displacement - the dirtbag tenants will be the first to go though...

Front Porch

No two apartments are identical apples but all apartments provide a solution to hunger (SHELTER). So you release these apartments into the supply in Manhattan and demand is not adequate to snatch up the additional supply.

If you deregulate apartments anywhere in NYC you will have some effect on the supply. Anytime you increase the supply, you effect the market (to some degree). As for your example. I don’t know how it is theoretically possible to only deregulate part of an area and not the whole area (Inwood v. Manhattan) but let’s assume that this could be done.

Currently Inwood and the Heights has a median split of MR $ 2,065 v RR $ 1,150. Again we have a great difference (almost double) between the two $915.00, releasing all these 56,173 Heights/Inwood apartments will greatly impact the local area.

Why the people of Greenwich Village who currently rent in the area may not jump on these cheaper apartments, the people in Harlem and the UWS may take advantage of these cheaper apartments. So what you will have is some people migrate north (UWS & Harlem) to snatch up these apartments because they’re nearby compliments to where they live at a cheaper price. This migration will in turn create less of a demand in UWS & Harlem because some have migrated. Eventually the prices in UWS/Harlem may drop due to the drop in demand. Perhaps people in other areas will then move to UWS & Harlem because they were previously unaffordable. These 56,173 apartments released into Inwood has a greater impact than you would think.

Eventually someone will move out of Greenwich Village because they will take advantage of a cheaper apple. Why the new apple may not be identical, it provides a solution to hunger (SHELTER) at a cheaper price.

what happens to all the people who legitimately can't afford their own higher rent? not the cheaters, not the rich people, not the second home owners but the real people who can't afford the clearer higher rent?

Consigliere, I agree with your hypothetical that that's the way deregulating rent-stabilized apartments *ought* to work. If we were in an Econ 101 class, you'd get an A.

But that scenario assumes that all other variables are equal, and they're not. The strongest evidence we have for that is the Furman Center's note that over the past 30 years, more than 230,000 apartments have exited the rent stabilization system.

If the hypothesis that deregulation lowers rents were true, then having that many apartments move from a stabilization status to a market-rate status should have lowered everybody's rent.

But over the past 30 years (roughly the amount of time I've lived in NYC) rents haven't gone down, they've gone up.

Most prices of things have gone up over 30 years.

FP,

I am talking about unleashing the supply of RR units rapidly not gradually like it has been since 1981. If you release all these units over the next 10 years it will have a tremendous IMPACT on the market.

ECO 101....perhaps there are many variables for why the market in NYC (rent) has gone up.

As for other reasons why the RENT has gone up

Today more people rent than own (more demand),
The population is greater now than 30 years ago (more demand),
Inflation ($1.00 in 1981 is worth $2.60 in 2014),
Increase cost of operations (i.e. gas),
Job market in NYC is very good (people like to live nearby work) as opposed to other areas,
NYC is safer now, more attractive to families.

I appreciate the talk but I think it would be best to agree to disagree. We likely won't agree on this hypo.

"what happens to all the people who legitimately can't afford their own higher rent? not the cheaters, not the rich people, not the second home owners but the real people who can't afford the clearer higher rent?"

They do what everyone else in America does: they move to a more affordable home.

"what happens to all the people who legitimately can't afford their own higher rent? not the cheaters, not the rich people, not the second home owners but the real people who can't afford the clearer higher rent?"
I'll answer your question with a question. Where do all of the 20 somethings who were born and raised in NYC go when they tire of living in their parent's apartment? Or where do all of the market rate renters go when their market rate rents are raised by $800/month (as discussed earlier this week on Curbed I think -regarding market rate rents in FiDi).

This notion that rent regulation saved NYC is so ridiculous it is laughable. It is nothing but a desperate attempt to justify leaching off of others. Just saying.

so...there is currently a group of market rent tenants who are adversely affected by the system. the answer is to ignore the impact of removing hundreds of thousands from their current protection in the hope that somehow this will prevent increases in market rents?

does that really make any sense?

"They move to a more affordable home." Where? Kansas? Because affordable housing here is, as everyone knows, so abundant. The people who work at your local Starbucks and pick up your garbage have to live somewhere, and there isn't enough space in the boroughs, much less affordable space. Maybe the wealthy can learn to compost on their terraces, and burn their paper goods in burn barrels.

The real answer, of course, is that the solution to affordable housing is a massive investment in rapid transit infrastructure and service, so that underutilized areas of the City (southern Queens, for example, or Harlem) are linked 24/7 via very frequent, fast, grade-separated trains to the more happening areas.

That'll never happen.

In fact, because of the widespread destruction of elevated lines (grade-separated) and streetcar rails (at grade, but now impossible because massively increased car traffic makes them no-go), New York has much less rapid transit than it did 75 years ago.

LICcomm, sorry to see you've returned to StreetEasy.

Show me a list of cities with sustained rent regulations, and one of cities without. And then indicate which are thriving today, and which are at death's door. If you find it laughable, perhaps you might consider whether you're a mental defective.

alanhart - I miss your point - the cities with rent regs are growing at a significantly slower pace than those with rent regs. Sure they aren't NYC yet but they are closing the gap.... NYC's population is up 4% since 1950. The country's population doubled in that same time frame. What am I missing?

CC -regarding those who are negatively affected - we're talking about millions of free market tenants vs hundreds of thousands of stabilized tenants (who are mostly wealthy). The math seems simple. Why spend hundreds of millions to secure these apartments for the wealthy and at the same time negatively affect more people than not?

And - I'm suggesting a 10% annual increase in stabilized rents not to prevent market rate rents from going up too fast, I'm suggesting it because the current system is inequitable. It favors the rich over the poor and costs hundreds of millions while doing so - Also because stabilization protects dirtbag tenants who no one wants as their neighbor.

aboutready - you can find a one bed for less than $1,000 within a 30 minute commute of Midtown. And you can get to/from that job for a bit more than $100/month. The idea that Starbucks couldn't find employees if stabilization were to go away is a nonstarter. (generally I appreciate your posts - this one seems unusual for you)

There are 5 one-bedroom apartments in Queens and 6 in the Bronx listed on SE for $1000 or less. I realize that in the boroughs/uptown many apartments are not listed on SE, but to suggest that there are plenty of such units available for a large group of displaced tenants is misleading at best. And within 30 minutes? Sure.

In all of upper manhattan, which is more likely to have SE listings, there is one.

Alan- seldom right and wrong again. Boston deregulated years ago. Houston, Dallas, Charlotte, Phoenix, plenty others- no rent control.

Detroit's awful liberal tax, liberal policing, liberal pension policies and corrupt liberal government destroyed that city, but Alan points to no rent control. After all these years he is still obtuse.

There is plenty of affordable housing in the boroughs. That is just more nonsense from those who don't want to feel like the leaches they are. Remove the rent controls and overall rents in General will decrease. Those favoring it are hurting most of the renters in this city.

I know we can all agree that rent stabilization should not benefit a family where one of the spouses is an equity partner at a top law firm, making enough money that the other spouse working would be uneconomical. Imagine that, it costs more money to work than the benefit of working , that has to be a top earning household, and certainly that family shouldn't benefit from rent stabilization.

>CC -regarding those who are negatively affected - we're talking about millions of free market tenants vs hundreds of thousands of stabilized tenants

Based on the proportions you laid out, 1 stabilized tenant for every 10 market tenants, it doesn't seem in a city as large and diverse as NY that the stabilization (which means a discount, not free) is likely to have much impact, other than potentially at the very margins, on the market rate tenants. But getting rid of stabilization will definitely create a windfall just for the rent stabilized landlords. And maybe some people who use and just get a windfall for free even though their husbands are equity partners at top law firms.

Where's General?

Where's nwt? I think the average household in the city pays well over what is considered an appropriate percentage of take-home income. And it isn't for luxury, those landlords won't allow it. But the slumlords do and will. Perhaps there's a solution. Regulate the maximum percentage a landlord can accept in a tenant.

fieldchester - I'm not saying that total population is 10 stabilized to 1 market - I'm saying those negatively affected are 10 to 1. If you eliminate stabilization is really hurts 300,000 people or so (and a large percentage of them are wealthy and afford to pay market rates like the rest of us) and it really helps millions.
And again I disagree that landlords would get a windfall and if they did I would be willing to give it all back in increased property taxes.

But it seems you would at least be willing to put some income caps on the current system. Interestingly I've asked many people at the City how many apartments are deregulated each year because of the high income rules. None will answer. I've asked if it's more than 10 per year and they won't respond. It definitely leads me to believe that the high income rules are so narrow and so difficult to enforce that fewer than 10 units per year are deregulated because of high income. Why do we allow millionaires to keep stabilized units??

aboutready - I look at setups for building that are for sale in the Bronx on a daily basis. I constantly see market rate apartments (or more often stabilized apartments with preferential rents) that rent for $1,000 or less. Sure maybe $1,100 month for a one bed is a better number but still $1,000/month is correct - further the rent would be lower if stabilization were eliminated. But let's not get stuck in the weeds here - your conclusion was that Starbucks couldn't find employees - my conclusion is that yes they can.

but of course you just made that all up. how do you know how many stabilized tenants are wealthy?

aboutready- landlords don't set market rates - if they did then why did we lower rates by 20% during 2009 and 2010. If I put an apartment on the market for $2,000 and 5 kids apply for it and one of them begs me to rent it to him for $2,200 am I being greedy to rent it for $2,200? Market rent are market rents no matter what I do.

Further regarding percentage of income and affordability. Again, income is only one metric to use to judge affordability and often when people publish this data they produce garbage. They speak only of one person's income not household income. Here are some people who skew affordability data. 1. Retired people -they have small income but a big balance sheet. 2. Trust fund kids with no income but cash. 3. Roommate shares/dual income households. 4. students - we have a huge student population.
I find that most of my market rate tenants could afford to pay more (but only if they have roommates).

The solution to lower rents is more bedrooms. That's why I think eliminating stabilization helps.
I also think we should legalize basement units - my hope is that on May 1 De Blasio will announce as part of his housing plan that safe basement units can go through a DOB process to legalize them.

And I think we must, must, must build more market rate apartments.

During the boom years Las Vegas (a town of 2MM) was building 35,000 units of housing each year. Eventually they overbuilt and housing prices crashed. We build about 12,000 units of housing each year but we probably lose just as many as people combine units together (especially in co-ops and with townhouses). I can't find a net number in housing units data - but my guess is we have about the same number of units today as we did 365 days ago.

I think Furman does a pretty credible job with the data. And it says you are wrong.

cc - we know that in 2011 the median income of stabilized tenants in core manhattan was $57,780 and that there were 162,000 stabilized units in core Manhattan and that there are 2.5 people per apartment - I'm extrapolating from that data.
Greg David of Crain's has written some articles on this in the past - a brief search couldn't find them.

how do I different from the Furman data - I looked it up - they are ambigious as to whether Table D uses household income or not - but they admit they don't control for the items I suggested above that skew the data - they say "Table D compares the median income, median rent, and share of tenants who are rent burdened for market-rate renters versus stabilized renters. There is no income test for tenants seeking to rent a stabilized apartment, so some people who enjoy the benefits of rent stabilization are not low-income households. Across the city, however, stabilized units are home to lower income households than market-rate units. The average difference in incomes across the two groups ranges from just over $8,000 in Brooklyn to $50,000 in Manhattan. Part of the income difference likely stems from the fact that rent-stabilized units have more householders over 65 years old than market-rate units.

You do realize that the RS program includes all of the newer 80/20 buildings where middle income can hit the six-figure range? Where landlords receive huge benefits to develop? If you have any innate sense of statistics you'll be able to parse out the truth.

Great, kick out the elderly. They'll be able to relocate to Kansas. RS units, of the truly inexpensive sort, are quietly disappearing. It's probably one of the reasons the population hasn't been growing more in NYC. People can't afford to live there.

Do the math for the Starbucks employee. With a roommate. He/she is just one medical deductible away from ruin unless there is a fair amount of savings or a reliable back-up. And don't get me started on all the companies that don't employ full-time so that they don't have to pay benefits. $350 a week, that's some high living.

Your solution is basement units?

>You do realize that the RS program includes all of the newer 80/20 buildings where middle income can hit the six-figure range? Where landlords receive huge benefits to develop?

Aboutready, are you smelling windfall?

>Do the math for the Starbucks employee. With a roommate. He/she is just one medical deductible away from ruin unless there is a fair amount of savings or a reliable back-up. And don't get me started on all the companies that don't employ full-time so that they don't have to pay benefits. $350 a week, that's some high living.

And then there are the people who take government benefits not intended for them.

fiedschester - basement units are part of the solution and I hope De Blasio announces it as part of his plan. The number most often used is that we can build/legalize 100,000 basement units rather quickly. In the downturn there were about 10,000 vacant units. Adding 100,000 new legal units moves the needle. It's part of the solution for sure.

Note that In the "basements" of all of my buildings if you went out the window you would actually step down not up. I even have a buildings where the DOB rejected my application for additional units because they were basements. But these units actually were 30 feet off of the ground. There was a fire escape in place should someone need to get to the ground. (the building was on a hill). These units can be made safe. Supers live in the basements of buildings all over the City. You don't hear new stories of them dying in fires....
These spaces would be cheap and provide A LOT of affordable housing.

Fine. You get the basement unit.

"Great, kick out the elderly" You've missed some of my posts it seems - I've said the poor elderly should stay AND they should stay on the taxpayer's dime - the rich elderly can stay if they pay market rate like the rest of us.

I don't support 80/20 programs nor 421 A etc. All housing should be market rate and no subsidies are needed.

"If you have any innate sense of statistics you'll be able to parse out the truth."
No need to go there - why would you attack me?? I've had many conversations with you over the years. I can't remember ever attacking you personally. If I'm wrong tell me I'm wrong and give a reason. But calling me an idiot is pointless. This isn't Fox News vs MSNBC...

Housing is a real problem in NYC. I started this thread seeking input on my idea to spread the burden more equitably. Right now too much of the burden is put on 20 somethings and too little is born by rich rent stabilized tenants. If people support rich people keeping their stabilized units then they have to realize that this puts unneeded pressure on poor 20 somethings.

We disagree. And I never intended to call you an idiot. As you have pointed out the numbers are not easy. But the solution to the housing problem in NYC isn't the relatively few RS units that are below market rate.

You have yet to support your claim of a material adverse affect by "rich RS tenants" on the market. You can't quantify it because most of those inflated RS numbers are from the 80/20 programs, which I do support but not necessarily with their current guidelines. You have zero proof for your assertions. Most RS properties in the boroughs, for example, rent at below their RS allowable rate. You really are talking about a small number of units in prime neighborhoods.

you keep harping on rich stabilized tenants. you cite some stat about median income that has nothing to do with rich people.

good luck.

>No need to go there - why would you attack me?? I've had many conversations with you over the years. I can't remember ever attacking you personally. If I'm wrong tell me I'm wrong and give a reason. But calling me an idiot is pointless. This isn't Fox News vs MSNBC...

The people you want kicked out, or priced out of their homes, does that rise to the level for which it would be permissible to call you an idiot? You do realize that your policies, and actions of people like aboutready, have real consequences to real people?

>Right now too much of the burden is put on 20 somethings and too little is born by rich rent stabilized tenants. If people support rich people keeping their stabilized units then they have to realize that this puts unneeded pressure on poor 20 somethings.

Are you a fan of Obamacare? Because that puts unfair burdens on 20 somethings.

> the 80/20 programs, which I do support but not necessarily with their current guidelines. You have zero proof for your assertions.

Really aboutready? You support it but not based on the current guidelines? What kind of ridiculous doubletalk is that? What are the guidelines under which you would support the 80/20 program? Give us details, since you want details from Jazzman to prove his assertions.

Sure. I think the 20 should have lower income requirements to make it truly affordable, and as that won't be palatable to those in the manhattan 80, we need to start building more of these buildings in the boroughs, perhaps with bus/van service to the subways.

Not such a difficult concept, really.

Your preference for the 80/20 program is something that you acknowledge won't work, so therefore you have another proposal completely outside of the 80/20 program?

> the relatively few RS units that are below market rate

- in Manhattan, nearly half of all rental apartments are rent-stabilized
- Even before the spike in market-rate rents over the past year, rent-stabilized rates were, on average, $1,245 a month cheaper

(source: http://www.nytimes.com/2012/07/08/realestate/rent-stabilized-apartments-ever-more-elusive.html?_r=0 )

>were, on average, $1,245 a month cheaper

See, not such a big amount in a big city.

> See, not such a big amount in a big city.

$1245 per month is a nice chunk of change, nearly $15k per year tax free. Several nice vacations per year.

It's not a savings of $1245 that would otherwise have been spent on the apartment. It's quite often $1245 that the tenant and his or her family doesn't have to spend in the first place. No vacations.

> It's not a savings of $1245 that would otherwise have been spent on the apartment.

Rent stabilization is not income based. The income limit of $200k only kicks in once the rent reaches $2500 per month.

cake

You realize that the rent stabilizee could have purchased his or her apartment, but at the time (and today) had certain rights that are his or hers and not anyone else's. Certainly government shouldn't be taking from them to give to another private party. And today's landlords know exactly what they bought in to, so they shouldn't benefit. We can take property from one for the benefit of another - do you agree?

> had certain rights

The right to a cheap apartment in Manhattan? What else do people have a right to?

Hi Alan. What do you think about Aboutready's attempt to make this her issue after actually being one of the biggest takers? Did you see how she tried to put herself on the side of the tenants by pointing fingers but then couldn't even support her own position?

>The right to a cheap apartment in Manhattan? What else do people have a right to?

People?

We are talking about specific individuals. Not "people". Leasehold interests are real interests.

> No vacations

Hold on, didn't AR take some vacations?

Yes, I'm sure Aboutready's April vacation is upcoming if she didn't already take it, and soon she'll have her May vacation and then look forward to her extended summer vacation. Aboutready isn't friendly on this issue. At least Jazzman's position is consistent with his money.

2008. Apartments are leaving and entering the system daily.

And MANY of those RS apartments are in the 80/20 programs.

Where have you gone recently, fs? Or should I say hsf?

Another aspect of rent stabilization is that it is actually anti-tenant. It in effect prohibits market-rate renters from bidding for rent stabilized units.

For example, there is a stabilized 750 square foot 1-bedroom on the UWS that rents for 1400/month. I would like to bid higher than 1400 for that apartment to improve my living conditions but am prohibited from doing so.

>Another aspect of rent stabilization is that it is actually anti-tenant. It in effect prohibits market-rate renters from bidding for rent stabilized units.
For example, there is a stabilized 750 square foot 1-bedroom on the UWS that rents for 1400/month. I would like to bid higher than 1400 for that apartment to improve my living conditions but am prohibited from doing so.

You can't "bid" for a lot of apartments. The existing tenant has rights.

aboutready, pretend you are advising hubby in a big litigation. He needs to explain himself. Gobeldygook like your last post - it's hard to understand let alone reply to.

You're also prohibited from buying the 3 bedroom apartment that sold for $250,000 in 1996, some things are just luck.

And you could move to Stamford, or Harlem,, if that need were so pressing.

>You're also prohibited from buying the 3 bedroom apartment that sold for $250,000 in 1996, some things are just luck.

Good point aboutready. If only your behavior were consistent.

> You can't "bid" for a lot of apartments. The existing tenant has rights.

What about the right of the landlord to rent his property to whomever he or she chooses? What about my right to bid for a private rental apartment? These are not publicly-owned properties.

> You're also prohibited from buying the 3 bedroom apartment that sold for $250,000 in 1996, some things are just luck.

There is no prohibition involved there. Everyone is free to bid for the apartment in your example. It is up to the seller to accept or reject someone's bid.

>What about the right of the landlord to rent his property to whomever he or she chooses?

The landlord bought the apartment without those rights attached.
Certainly we don't want the government to give extra rights to a party by taking away from another.