mommy, are we poor?

Dahlink, tell that little scamp, "With a momma like me, you are rich, rich, RICH !" xox

lovely notion, and now she even thinks it. those younger ones can be tough, though.

A friend in Los Angeles was looking into sending her daughter to an elite private school & we both had some trepidation that the values would get skewed. As it turned out, she'll be going to a new local science academy & none of us will have to deal with the 'elite' thing. Whew.

Keep up the good work, AR - on the home front, I mean.

drdrd, sadly i think it's just the degree that you deal with. we have plenty of children who economically and in terms of housing would be considered something other than upper class. nobody at THIS school would gossip about them.

but they would gossip about somebody who didn't seem to be living "up to their means." or an IB father who drops his child off to school (must be unemployed!!).

and from what i've heard that's true everywhere. people constantly second-guess the decisions of others, in an attempt to justify their own.

that was my real point. it's not just the elite issue, although you really need to be vigilant. it's part of this whole issue that you are defined by where and how you live. people assume that you aren't being prudent, that you're poorer than you are. and that had become so baked into our perceptions that it aided and abetted all this overconsumption. nobody wants to view themselves as less than they perceive themselves, at whatever rung.

and thanks.

What's the deal with Peter Cooper?

NEW YORK - (Business Wire) Debt service reserves for The Stuyvesant Town/Peter Cooper Village loan are likely to run out by the end of this year, according to recently completed analysis by Fitch Ratings. In this scenario, a default on the loan is likely if an equity infusion or recapitalization does not take place.

i guess they are underwater?

i heard the reserves were supposed to run out in September. they only put down something like $57 million on a $5.4 billion loan, i believe (don't quote me, memory's fading with age). i think there was a lot of emotion involved, dreams, new visions, and all that. i doubt that will extend to providing additional capital.

maybe the new landlord will do a better job with the washing machines. but i've gotten used to sending the laundry out.

Aboutready, One friday evening we had our two grandkids (cousins) over to swim at our apartment in gramercy. later while eating dinner, 5 year old grandson D. says to his 4 year old cousin C., "you know, Chloe, i can swim faster than you." And chloe answers, "yes, Dilyn, but my apartment's bigger". I thought that was hysterical and probably pretty typical of the values kids pick up whether you like it or not.

Interesting thanks for the update.....This is an interesting story. The fact that the owner can get so into debt as to compromise the services they are required to offer residents. Is this regulated at all?

rosina, that's awesome. you know, at 4 all you can do is try to talk the good talk. but from my experience, the efforts do pay off. but it's a hell of a lot of work.

here's the link. looks like they are underwater, but not due to original LTV. total loans were $3 billion (CALPERS and blackrock were in for at least a portion of the principal, but i could have sworn TS put in almost nothing). although there could be other financing not subject to this particular downgrade.

http://www.bloomberg.com/apps/news?pid=20601206&sid=asgfowEv_xUA

just a shitty investment made using shitty assumptions. by supposedly very savvy (maybe not CALPERS) financial people.

riversider, it is regulated. much of the complex is even still RS. but you can call the city and the landlord and what can anyone do? they'll just tell you someone's on the way. and they are, next week, but not today, and only one out of five washing machines are working the day before spring break.

i try to be philosophical about it all. zen. the machines had gotten so expensive that it's probably cheaper to send it out. and we can take it upstate most weekends.

Not a CMBS expert, but it looks like the loan(s) are a victim of poor underwriting in 2006 (a bad vintage year for sure)..This isn't so much an LTV issue as a DSCR issue. Suspect this is yet another example where the loans were priced assuming an optimistic pro-forma analysis. The loan would never have been made in a more prudent lending environment. Any Comercial guys with more experience want to chime in?

riversider, the projected rent roll/destabilization conversion rate was ludicrous.

their loan was based, if i recall, on double the amount of apartments being converted to market than actually happened. that bloomberg article is hysterical. "proved more costly than expected." the rates were entirely unsubstantiated by history. and the projected income stream was hugely optimistic. they had increased base rents here enormously. for some historical perspective, i moved here in 2004, my lease was $2750. last summer they were asking renewals for the same apartment to pay close to $6000. some did, but not enough.

Should be interesting to watch the renegotiation when the loan comes due.. Maybe the lenders will exchange debt for equity. This is really the down side of securitization...the guys writing the loan have no stake. The world was probably better off with the old model when Insurance companies invested directly and controlled the under-writing.

As far as the washing machines. You may be better off. When I first moved into Manhattan and rented.. It was a mad dash to the basement laundry room or risk some rude resident tossing the clothes to make room for their own. Plus the Seinfeld lost sock theory..

http://www.youtube.com/watch?v=TQbfkKJrmqA

i've become quite the puritan with age (in some ways). it seems to me if i'm sitting at my desk most of the day i could at least get some laundry done. but you're right, not being a slave to the spin cycle, as someone put it, doesn't suck.

the dead plants are becoming a bit depressing. they actually repaired some of the lawns the other day, and my husband and i were wondering if someone was coming to look at the property. when metlife was looking for a buyer this place was stunning. the comparison is a bit hard to take.

this deal will perhaps go down as the poster child for the excesses of the 00's.

AR, you are correct; the whole society got skewed with the spend, spend, spend nonsense - I am my THINGS !!!!!!! I'm currently reading 'The Millionaire Next Door' & it is an excellent primer & reminder about fiscal prudence. My little Italian grandmother would say, "If you can't afford it (cash pay, of course), you don't need it."

i'll pick it up. everyone should, if they haven't already done so, read Liars' Poker. i feel like i've been living at the poker table, and trying not to fall for the bluff.

AR: There's a copy of MNS about 24 inches from my nose as I type this. I'll bring it to our next gathering for you. The research is a bit dated, but the conclusions remain timely.

One clear benefit of public school is that our daughters feel squarely middle-class. They see both extremes, and appreciate having everything they really need even if they can't afford the splurges some friends can.

west81st, but for how long? that's the thing about living in an environment that is so expensive. if the better public schools only take children from families that can afford certain rents/prices, it will affect them also. and with so few private school spots, the proportion of wealthy people selecting public school spots would have shifted. and children are notorious for classification, it usually follows their parents' attitudes. it's not who is rich or not, it's who has more and is thus "better".

but that of course would depend a tremendous amount on the neighborhood. and thankfully, i sense a real attitude shift. i've even had some people praise me recently, for my savvy strategy. who knows if they were sincere, bitter, whatever, and i don't care. but i think some change is here.

i strongly considered 234. we even had an accepted offer on a loft down there in 2000. i think i chose the chelsea location as a way of eliminating my stress over the decision. the public school was not an option, and i wasn't interested in my daughter attending a special public school program.

i think 10023 said she'll send out a notice for the next gathering shortly. it should be fun.

AR, maybe you should have shown her your bank account balance!:)

My children grew up in a very diverse setting with lots of travel and a slew of eccentric characters around. They were also lucky their Mom is the owner of a very lovely brownstone in Chelsea. Both their mom and I came from "artistic" backgrounds, (I was in a fledgling punk rock band before stumbling into real estate while at City College). They both started out at West Village nursery school (where their mom had also gone, class of 1969) then onto PS3 a terrifically diverse school lead by Dr. Meltzer whom all adored.

Both kids sort of got a free pass with the private school crowd (as their Grandparents held a few Oscars and Tony's between them). It was interesting because they were quite aware of this, and for the most part the two groups did not mix, but were occasionally at the same parties. It definitely gets more interesting as they grow older, my daughter went to high school at Laguardia(High School of performing arts) where the social dynamic really gets interesting. My son went onto a small private school and it was a bit of a disaster...

I think it certainly is quite a bit more difficult for both children and parents in today's NYC. Though perhaps this is what every generation says? But in the 80's and 90's when our children were in school, the West Village for instance was a place many people were a bit anxious to live in. I also remember being at Montrachet for dinner and the UES crowd would wait in the doorway for their driver to pull right up front, afraid to wander to far.lol.

Good luck with your daughter Aboutready, your post just got me taking a stroll down memory lane. In two weeks my lovely daughter(now 21!) heads to school in LA for some additional training for a year. Even for a Buddhist like myself...it's hard to "let go".

KeithB(Formerly "theburkhardtgroup")

how lovely, and how hard!

it's certainly not a new situation, particularly in Manhattan. i just think the real estate bubble magnified it. and there are SO many issues. like the income one. what do you say to a child who knows you are living a middle class life on a larger salary? yes, you could explain the value of savings, prudence, etc. but that's so hard for a younger child to grasp. and even harder is trying to explain luck and timing. while the bank account is healthy, it certainly seems as though it should be larger given some of the concessions i've made. i don't want to criticize the choices of others (usually) to my daughter while imparting the lessons. i have no idea what choices were made, and when and why.

but who am i to complain? and that's where i ended at. so what if all the partners that were our undergraduate contemporaries were able to buy on Park Avenue, etc.? they wisely chose to go to law school a few years earlier, and had kids (or didn't, actually) many years later. yes, the timing kind of sucked, but i wouldn't trade my family for anything. and i was the beneficiary of great timing earlier, which is why we have a lovely country house.

we also travel frequently. not lavishly, usually, but quite nicely. and recently my daughter said to me, you know I'm really so lucky, aren't I? how many kids get to see Rome when they're 10?

since plenty of her contemporaries at school have been to Rome, i took it as a sign of some perspective.

You can't go wrong with lot's of love and a solid example of being a caring, loving member of humanity. You seem to have this covered, the rest will take care of itself...

keith, one day in the not-so-distant future mine will fly away also. i just hope that the possibilities for finding her new nest will be ok. good luck to yours, it is not an easy time to be a young adult.

"what do you say to a child who knows you are living a middle class life on a larger salary?"

But this is exactly why you give young children piggy banks, and little cash gifts for them to fill the bank with, and then when they're a bit older you give them a small allowance. It's to teach them the balance between saving and spending, to hold out for the toys they really want to buy themselves, but not (on the other hand) live in miserly deprivation. And while teaching, you present your (excellent) example as a model.

Little Miss Aboutready is then able to learn from family experience, coupled with the news stories she hears/reads/sees these days about the economy, and can really come to grasp both personal financial planning and the gossip she might hear at school about __________'s parent getting laid off ... as well as understand the plight of the laid-off working class people worldwide.

And hopefully when she's older, it'll help her understand the balance between pursuing lucre and having quality time with friends, family, and herself. Budgeting time along with cashflows.

You did right, you did good.

When my sister was walking along the beach with her then-3-year-old daughter:
Kid: Mommy?
Mom: Yes, 3-year-old daughter?
Kid: Where do you get the money?

ah, a couple of years ago our daughter's head room teacher called and informed me that her work hadn't been quite as good as usual in a couple of subjects (fifth grade, during time period of huge multidisciplinarian project). i think she was rather taken aback when i told her that she really couldn't expect my daughter's best efforts in every subject every day. i explained that i was trying to teach my daughter time management, and didn't expect her to have a stroke at 11 so that she could get everything perfect.

she never called me again. our daughter got a glowing report.

Hey, aboutready, I don't have kids, but here's a suggestion - "If we were poor, my dear child, I would love you just as much as I do now, and I would hope that you, my dear child, would love me as well. Is there something wrong with being poor? You are in that expensive school to learn, not to be 'friends' with people who talk about who's 'poor' and who's not, so I'm sorry if you may feel a little unhappy in this horribly elitist school, but your Daddy and I want you to have the best education the world has to offer, and because we love you, we think it's the best thing for you, even though you will never have real friends in this school."

Or, you could try this - "Okay, my dear child, why don't we get rid of the country house. That way you won't have to compare it with your evil little friends at that lousy school we're slaving away to put you through, okay?"

If that doesn't work - "You tell your snooty little sorority rush week friends that that inferior country house is going to pay for your college tuition someday!"

But if it comes to this point: "How would you like it if I pulled you out of that snooty finishing school for future M-R-S'es and put you to work at McDonald's? I think you should have to pay for your own GED later on when you realize the value of a day's work and a high school diploma!" then, please, please, please, there's help for you somewhere. If not, create a new self-help group, "Mothers of Private School Students Anonymous."

Your story is great!

sadly my daughter constantly frets about how she will manage parenting and a career. she swears she will never hire a nanny. oh the optimism and dreams of youth. i'm glad she's a thoughtful creature, but not so glad that the model i provide both distresses her and sets a standard that she shouldn't have to worry about attaining.

Did Little Miss Aboutready read "The Nanny Mafia" by Tom Wolfe?

not yet. she just finished Grapes of Wrath though. and i hid "The Price of Motherhood." I think she has read "The Nanny Diaries." there's no in-between for Little Miss Aboutready. But at least she doesn't like teen trash. No It Girls or A-List around here.

http://www.theonion.com/content/news/socialites_without_borders_teach

"That is not how we eat a deviled egg," said volunteer Yvonne Chantecaille, playfully knocking the protein-rich appetizer from an elderly villager's hand. "We do not gobble it up. We savior the complexity of flavor profiles, and leave the garnish around it alone."
"Also, we do not bring up how a senseless genocide ravaged our family, leaving scores of dead as far as the eye can see," Chantecaille added. "Not even over dessert."
Due to Rwanda's widespread unemployment and limited access to basic necessities such as food and clean water, Socialites Without Borders made it their top priority to rebuild the nation's confidence. The volunteers reportedly boosted the self-esteem of poor Rwandan farmers by referring to them as "organic agriculture tycoons," while women suffering from Hepatitis A were touched up with foundation to conceal their jaundiced appearance.
"See—all better now," said Roberta Furlein, wife of steel magnate Michael Furlein, applying makeup to the face of a sickly Rwandan woman. "A little bit of color was all you needed."
Furlein, who has donated more than $20 million to improve living accommodations for Columbia University students, blamed the sub-Saharan nation's education system and illiteracy rate for many of its current problems.
"Reading is so important to bettering yourself," Furlein said. "No one here seems to ever look at New York Times style section, or even Vogue for that matter."
Added Furlein, "It's scary, but I don't think people even knew who we were."

Nice article, AR. Reminds me of the infamous Red Shoes Incident in Marcel Proust's "A la recherche de temps perdu," third volume, "The Guermantes Way."

I'd go so far as to call plagiarism.

shall have to pick up the proust.

It's when the other little girl in the sandbox says, "Your shoes aren't Indian Walk T-Straps ... your shoes are *garbage*!" and her nanny eggs her on.

Or was that from "The Nanny Mafia"? I always mix up Great Literature.

i get it now.

they're viscious creatures, both young children and sometimes nannies. such a culture they have, kind of like parents. the lazy ones all glare at the active ones at the playground, and the active ones feel superior. i've met superb nannies, btw, as well as parents. but this is both funny and sad to watch.

i once was at the monkey bars at a west village playground (is there one totally consumed by traffic at Bleecker?) when a nasty little oversized 5-year-old kept shoving kids out of the way. i approached and calmly said you'll have to wait your turn. he literally turned as red as a beet and shouted three inches from my face no i will not. and started to shove my daughter. i put my hands up on the bar on either side of his to prevent him from progressing, and two seconds later his nanny was up in my grill saying she was going to call the police and report me for child abuse. she said she had been watching the whole time. i asked, then why have you been sitting on your sorry ass (more politely, kids were present) and not here dealing with the little terrorizing shit? call the police, please, i'd welcome it. we can make bail and i have an attorney in the family. she picked up the terror and left.

There's that, but the story was more about the (English) nannies terrorizing and judging their employers ... among other things. Late 1960s. From either The Tangerine-Flake Streamline Baby, or The Pump House Gang, both great compilations of little pop psychology vignettes, from before Tom Wolfe became a Dirty Republican, or at least didn't flaunt it in public.

The playgroung at Abingdon Square, or the obverse of that Square, I forgot what it's called.

Besides, the nanny in your story probably assumed you were another nanny, and she was stomping her foot and puffing through her nose, preparing to lock horns with you. Funny how we've returned to the 1960s, when mothers were ostracized from the playgrounds, except on nannies' day off ... that's in "The Nanny Mafia" too; everything is.

i'll have to read. my caregiver was a bit of a bitch as well, to me but not our daughter. and they're clever, those ones. they know how much you value good care for the kid, and i had friends who reported back to me. no nannycam, but i was truly envied by the others. and my daughter was flourishing, learning two languages, happy as could be.

but me? amazing what a strong ballsy woman will take from a caregiver. i remember this one: "well, you look nice. of course your options were limited with your current weight. maybe next year." or "isn't it lovely that little miss aboutready thinks of me as more than a nanny."

and i provided plenty of affirmation, and money. my child mattered. but the availability of qualified caregivers is not so great. mine had a top degree from her country, felt we were "not quite the thing" but we were willing to pay "quite the thing" wages. what she gave up in prestige (she took the position as a temporary stopgap measure, or so she said, and when i decided to go back to work i begged her to continue), i gave up in pride.

Serious question - Why, if you believe so strongly in renting vs. owning, would you want to buy for your daughter? Why not just leave (give) her the money and have her rent whet she wants and might not otherwise be able to afford?

ph41, i fully believe that there will be a decent time to buy. just not today for me. and at that time i'll have to decide how to utilize our resources.

different cities will have different time periods. i'd like to retire to seattle, san francisco, santa fe or rome. the first two, at least, will be major victims of the bubble, and not just housing. one of the attractions of seattle, for example, is no income tax. will that last? and depending on when and how this plays out given our flexibility we might just mostly travel. who knows. but if i found a great deal somewhere (and i've only idly started looking, just to create a base of knowledge), i'd like to be able to move on it. i might sell the upstate house, for example, and buy a different discretionary property that may or may not pay for some of its costs in rentals.

but the ultimate gift it seems to me to my child would be some place to live. it would be in trust. the reason i would do this in NYC now rather than just the money is that i think there will come a time when the opportunity here is compelling. and i doubt that i will have the cash to go after everything at once (although with this bubble reinflation maybe, because if i have another however many years to save, only sort of a joke), so i might consider buying her place as our place to live. but even that i wish to postpone as long as possible.

i don't want my kid to think that life will be totally provided for her. but i don't want her to have student loans, i don't want her to not have any ability to not explore non-high-paying jobs, i don't think she should necessarily have to live in charlotte to achieve that, and i want her to work hard for HER goals, and have them be productive and fulfilling but not necessarily high paying. i only have one child, the financial costs for us won't be tremendous, and she'd get it anyway in the end. there are different ways to succeed. different paths.

btw, i lied. not intentionally. but rational thought had me considering the sale of the upstate place. won't happen. so would have to use cash, which i could, but i'm competing against someone's 95 year old grandma these days for cash hoarding.

and i know it's not the best investment practice, and i just lost a ton of money, according to steveF. so what. i made a ton last go around, and i've heard that the mutual funds where our money sadly must rest, have seriously underperformed, so fine.

You might give up the upstate place eventually. We used to have a country house,(took our laundry up there also) but, when we bought our current apartment, which is very spacious, and has outdoor space, we really stopped going there a lot. At which point, the house started having problems, as underused places do.

You might actually find a place in the city where you have the space to feel as at home as you do in the country. Sometimes, that is why you buy.

ph41, i'm not an over-the-top bear. and i have owned in the city, a couple of times. but there is a very real possibility that my recently renovated property will revert to a $2700 rent.

and even barring that, when you don't have such a huge timeline, you lose some interest. particularly long-term thoughts. if you have the funds, those long-term thoughts will have you spending three months in the seychelles every year. that might not be realistic, but to people who have had to deal with the bubble, that might just seem fucking grand.

Again, ar, serious question. Where do you invite people over? To country house or city apartment?

And this includes your husband's partners in the firm.

that's a funny question. both. although i've only been to a couple of partners' homes, and only a couple have been to our place. and it's not a question of prestige or embarrassment, but there has been a marked shift in emphasis the past 10 years. actually i can just about date it, 1998. before then there was so much more of this sort of thing, the partner of the group hosting everyone for the christmas party. i don't know if it changed because everyone got so busy, or someone sent out a memo saying stop this shit because the peons will become jealous because no matter how much we pay them they'll never do as well as us. and his firm is really so not that type. even his over the top prestigous previous firm wasn't that type.

the apartment is beautiful, really. i don't like parquet, and i haven't bothered to swap that out, but the rest is lovely. high ceilings, lots of natural light, views of tree tops. and i only have one kid. it would be kind of sad with three, but it seems fine with one. and this complex hosts some VERY wealthy people.

also, my kid's friends really love us. we almost always take one travelling with us, and they are quite willing as they enter the teen years to go upstate without complaint. i've heard that's kind of rare, but it makes the experience a very positive one. sure it might change, and i'd reconsider the upstate place. but i don't think it would change how i feel about pcv. i'm working very hard to impart certain values to my child, and in the process i really had to look inward. and i find it's pretentious to judge myself or others based on where they live. it would be ridiculous to compromise to an extent that you become uncomfortable, but i'm not even close to that. my apartment presents like one that would cost me much more to buy. and it suits my needs. washing machines notwithstanding.

you'd be amazed at how many people suddenly claim to respect that.

you'd also be surprised at how appreciative some clients are at ANY signs of thrift. my husband has a number who, while they haven't been over (that just wouldn't happen), are very miserly. he has no problem telling some of the richest people in the world where he lives. why should i?

It is just interesting that you seem to have decided that your upstate house is really your "home" and not your place in the city, where you spend most of your time. And even though you've said the house is probably not worth now what you paid for it, you have no regrets about not simply renting a weekend place years ago, rather than buying it. Economics do not seem to play a part in your thinking about the house now. And that is the way many people feel about buying a home in New York city, even if that home is an apartment, and not a house. Many people want to be able to stay in one place without worrying about whether the rent will continue to go up, or whether the landlord will decided to stop renting, or whatever else may happen.

Also, another quick question. Somewhere else you said the PCV is "still regulated" and some apartments are still "RS". How are PCV apartments regulated, if not RS?

After we sold our country house (thank god in 2006), my husband said he will never own a second home again - would rather just go and rent something for however long we want to (Italy for months, etc) - figuring that the purchase, maintenance, and ongoing worry are way more than the cost of renting whatever we would like.

i don't disagree enitrely. but you have to consider the risk factors and relative values. i chose to sell a place and buy one that cost less than a third but was three times the size. 1300sf for a million, 4000 sf for about $350k. the risk of the latter was much less, and provided much greater return (emotionally) for the value.

and when i did the trade, i got a "nicer" apartment in a less "cool" neighborhood. same size. total cost for car, apartment, garage and house was equal to condo cost.

i don't think of the upstate place as my home, actually. there are times i despise it. it's a lot of work. but i focus somewhat there because i have more to do, renovations wise. i just spent about $10k buying a new refrigerator and adding some kitchen cabinets to my PCV apartment. it's my home, and i love it. and i am so over whether or not anyone else claims that i live in a project.

And the second question re: regulated?

i'm pretty certain that the 15-year price trajectory in PCV is manageable. i am 90% certain that i will have paid less, both in terms of price, and in terms of stress.

i don't really care if it becomes RS. and actually, i'm becoming fairly certain that my rent is above what i could get elsewhere. but i really LIKE this rental, and i'm not worried that the lease won't be renewed. the only dilemma i would have is if they took it condo, but then i'd clearly buy it for the kid. for now, i love the mobility. who knows what we're going to want to do, or where we'll want to live, when our daughter graduates from high school. and that's less than six years away. the market kind of forced my hand, but i think in the end i rolled with it fairly well. and i'm not saying my way is the only way. not at all.

I still don't understand - are PCV rents regulated by the city? Even if the apartment is no longer rent stabilized? You seem to indicate that there is some sort of 15 year time frame in which rents on older (pre-sale) leases, even if over $2,000, are regulated in terms of increases - is this the case?

it's an unusual situation, and it's currently being litigated.

the tenants are arguing that the apartments were incorrectly removed from the rs program. there are different rs programs, and different terms. but in this situation they are saying that the $2000 threshhold wasn't relevant. met life, and then TS, took advantage of certain tax benefits that are given to landlords for large improvements. under the terms of that program, the tenants are claiming that the landlord was not legally able to destabilize apartments. the apartments would return to RS status, and somehow determination would be made as to what their value was upon destabilization, and then the regular increases allowed by the board calculated. rents would not top out at $2000, they would go above that, but would be lower than today. the landlord could also be liable for treble damages, which in my case would be huge.

it's complicated. all i can say is on a certain level i understand why the washing machines don't get repaired that quickly.

What standing do the RS tenants who were displaced by luxury decontrol have in that legal case?

http://nymag.com/realestate/features/53797/

and, from the fitch-related article (which seems to be a bit off, i'm fairly certain it is an appellate division decision that has made its way to the court of appeals).

http://finance.yahoo.com/news/Fitch-Stuy-TownPeter-Cooper-bw-2171103816.html?x=0&.v=1
In March 2009, the New York State (NYS) Supreme Court overturned the sponsors' motion to dismiss claims surrounding the deregulation of units. A week later, the NYS Court of Appeals ordered a stay on this decision pending a hearing by the Court of Appeals. During the stay, the sponsor is required to deposit the differential between legal stabilized rent and market rent collected from tenants into an escrow account. The sponsor does not have use of these funds while the stay is in effect. The current balance of this escrow account is approximately $10 million and the estimated monthly deposit into this account is $2.5 million.

The timing on the resolution of the court case is uncertain and oral arguments are expected to be heard, by the NYS Court of Appeals at the earliest, in September. A ruling by the Court of Appeals will not necessarily resolve the litigation, as the ruling could send the case back to lower courts. While a final outcome for this lawsuit may not occur for several months or years, Fitch believes the ultimate value of the properties will be, in large part, determined by the lawsuit's resolution.

I am still trying to understand how you were able to sign your renewal lease for $4,000, while other tenants (by your report) were offered renewal leases for comparable 2/2 apts for $6,000, and moved rather than renew. That is a HUGE price disparity, obviously in your favor, and not in favor of market rate tenants, so you must be under some form of rent control. (or in this case protected by on-going litigation).

i don't know how the restitution will be handled, but the case has been brought on behalf of current and former tenants.

under the rent stabilization law the RS status resides with the apartment. except for that deregulation process. someone who signed yesterday, i believe, would have the apartment revert to RS pricing. although TS voluntarily discontinued adding new units to the destabilized pool.

So the rest of New York would be de-controlled at $2,000 with the income limits as defined, but Stuy and PCV would not? Don't think that will fly with the rest of New York - sort of reverse discrimination and tenants who have be de-controlled elsewhere will probably put up an enormous stink (and rightly so).

no, i have a winter rental. my neighbor moved in in august. last year it made a huge difference.

Aboutready, Did you move out of manhattan?

Re_Pro- PCV is Peter Cooper Village in Manhattan.

i'm seeing young ones move out in huge numbers. in the elevator yesterday, three 20 somethings, younger side.

"How long did it take you to move?"

detailed discussion of why it took 7 hours (two stops, two people, not one, more stuff).

"Well, i told them five hours. I've got enough money in my account for five hours."

my husband and i were amused, and then he said why the hell is she hiring movers if that's all the money she had. oh the kids these days.

Hard to believe a "winter" lease vs. a "summer" lease is worth $2,000 or 1/3 leas than market - and the kids might not have moved if they were paying the rent you are.

Was skimming the blog, so you live in a 4000 sqft at PVC for 350k?

ignore this person
report abuse i don't disagree enitrely. but you have to consider the risk factors and relative values. i chose to sell a place and buy one that cost less than a third but was three times the size. 1300sf for a million, 4000 sf for about $350k. the risk of the latter was much less, and provided much greater return (emotionally) for the value.

you need more detail. i sold a condo, moved to PCV, and bought a place upstate. i wasn't trying to mislead.

ph41, i agree. but the last summer in particular TS went crazy on the rent increases. and you have to recall my apartment was renovated 5 years ago. it doesn't look like the ads. no stainless steel appliances, etc.

anybody notice the huge amount of ad space placed here by TS in the last couple of days? ph41, they were trying to game this summer's market. they quit with the concessions in an attempt to stabilize their pricing, and didn't offer reductions for renewals, or at least i haven't heard of any. it didn't work.

AboutReady, I know you weren't trying to mislead. Do you think Mahattan's RE prices have stablized or will it still depreciate? You seem to know much about finance. Did you use to work in the financial industry?

largely self-educated. i have lots of time!! my real area of knowledge is actually legal, and during that horrifying 10-year stint as a legal assistant i learned a ton about specific financial-related concerns (accountants' and D&O liability, i actually did the update for the PLI D&O coverage manual, underwriting and reinsurance, etc.).

as to your question, there's still a ton of excess money in the system. i don't think it can be productively absorbed, so i feel that prices are still being "bubbled."

long answer short, with current economic conditions i don't see how the price levels are justifiable, or maintainable. if and when they'll be allowed to drift to their natural market level is anyone's guess. i think affordability right now should be everyone's number one concern. if it doesn't feel fairly easy, don't do it.

aboutready - please take the following comment with a sense of humor, because that is how it is intended. It is a good thing that the partners in your husband's firm (and you and your husband) don't invite the firm's lower level people at holidays, etc. Because, they might wonder why the equity partner is living in an apartment and apartment complex that was originally intended for New York's working class (i.e. the lowly peons) at a rent they cannot duplicate. They COULD understand your living on Psrk Avenue, but the PCV thing might cause a weird sort of reverse class resentment.

they know when he made partner, and that we moved here before that. and they have been trying to buy also. some live in Queens, whereas they probably would have lived in a Gramercy or UWS apartment 10 years ago. one just had a kid and converted a small office to a child's room. 10 years ago he would have moved. and he'd love to move, but he bought in 2006 and hasn't been able to save enough to afford the cost of the transactions and a larger apartment, even at a very decent salary without an extravagant lifestyle. that things are overpriced and that some people have been paying a huge price to keep up appearances is hardly a secret.

you have literally no idea how many partners and doctors live here. my husband's best friend from college grew up here, dad is a partner, parents still live here. i knew an equity partner at my firm in 1995 who had been here for years. told me he had thought about moving, but why bother. it was so cheap.

I agree with you. I am in the financial industry and the comps in general are far worst than 2006-2007 peak. 2008 comp was just horrendous for most people. 2009 looks about the same from a comp perspective. Not sure about other sector or industry comps, but the financial are still fairly bad. I can't see how RE prices for NYC will rise. The trump tower apartments are still very pricey, bought in 2003 for 750 persqft. I don't think it is trading at 750 sqft yet which I think anything above that sqft price is ridiculous. FiDi, my gosh, I really don't understand why anyone like it down there. To each its own, there is no community there and nothing to do. It is like a deserted town with visiting foreigners. Do you know if other industries have suffered similar income slide? If so, I can't see how Manhattan's RE prices can stay at its current level.

PC is hardly a slum. I suppose everything is relative, but I just walked along 20th St. from the so-called greenway (still more sidewalks and parking lots with joggers' lanes than a true greenway) Friday night and the lush green grass and trees at PC made it seem opulent to me. I understand that it was long a privately-owned RS complex that people waited for decades to get apartments in, and I agree that the so-called upgrading to luxury status was pushing the envelope too far too soon, but most people living anywhere in the five boroughs can find something to envy about PC, so I don't think law firm partners have to hide their addresses. Besides, smart money gets the most bang for its buck possible, and if a law firm partner can find more space in PC for $4,000 than CPW, logic dictates......

Aboutready, I haven't read this entire post, but I think I got the gist.

1. I used to be in Biglaw. There are easier ways to make money. You guys maybe feel poor due to how much of your blood, sweat and tears Biglaw sucks out of you for your salary.

2. Sounds like you are a single wage earner household. At least in our UWS preschool, the only SAHMs are with crazy rich finance husbands or they have trust funds. Most of the parents are dual income professionals, each pulling in a 200K-500K salary. We all know the trend this country has taken from single income to dual income families. It has it's own, unique impact in Manhattan.

3. Poor is relative. Focus on what you have. I know a family who have private school and college paid for by family for all their kids. Live in a 5K square foot colonial on one of the best streets in Greenwich and their HHI is about $800K. They feel poor compared to their neighbors (justifiably so given what I hear people spend on parties, vacations, household help, etc.). Try and get some perspective. You are giving your daughter a very unique and special experience growing up in Manhattan. There are so many plusses from it. The huge negative is there will always be lots of folks who make tons more than you.
You will forever live a relatively middle class life in Manhattan.

i agree with most of what you write, UWSer.

but i don't think the point that i was making came across that well. now that i no longer worry about finding a place to buy, i feel quite well off, and by any other standard we really are. it was THE sole determining factor that made me feel a bit poor. and my husband landed a great job with a ton of control over his hours, so although he works hard, he has his self-respect. as a partner you'll never be at the top, but with one kid it's not that bad. i don't care about the jewels, the furs, the parties, would HATE that scene. my daughter is currently being transferred from the 10 room duplex to the hamptons for a few days of fun with another rich family. as my husband says, it's great to have rich friends. just not when they inflate housing prices.

i only regret buying that condo in 2001. just should have moved to PCV and bought the place upstate then. what i was saying was what you are saying. it's all about perspective. so the gist is that i like this option. not the opposite. it was just a story posted to begin a discussion on perspective.

RE_PRO, things aren't looking so peachy in the law. although recent numbers were better than i expected, but i suspect they are that way because of cost cutting. i don't see much growth, although there was some jubilation when Sidley actually asked some associates to start EARLY. maybe they just got a huge bankruptcy matter?

"what do you say to a child who knows you are living a middle class life on a larger salary?"

How about nothing?

It's really none of your child's business how much money his parents make, or their financial choices. And there's nothing wrong with telling him that.

I think two words are woefully underused by today's parents: "NEVER MIND".

As one of my Silicon Valley friends once said to me, "today was the day I had to sit down with my daughter, who goes to one of the best private schools in town, and explain the difference between millionaires and billionaires."

It's a teaching moment. Not a bad time to crack open the book of Ecclesiastes either.

ali r.
{downtown broker}

big difference between Rich & Wealthy..

http://www.youtube.com/watch?v=kglXIoiXDFM

"what do you say to a child who knows you are living a middle class life on a larger salary?"

uf, boy are we back to Matt's definition of what middle class is?

your income doesn't allow you to prevent your daughter from feeling poorer than her class mates, even if you spend it all. the issue during the bubblilicious years might have been exacerbated by the fact that most $ went to your daughter's peers types of families. as i see it, this is a choice you made long time ago when choosing schools. in this regard is better to chose a place where the kid is about average so that she doesn't feel poor nor envied for having more than most.

regarding to what to tell, it depends on how you plan to provide her with financial education. a kid doesn't need to know all the details (nobody does), but knowing that her parents just cannot afford certain things that others have is useful info to have. you could include a lesson of discretionary versus non-discretionary (and how subjective that border is) in the talk.

"i only regret buying that condo in 2001. just should have moved to PCV and bought the place upstate then."

why? don't get it. thought you really nailed it securing its appreciation.

Admin, Since when is rich defined by what you choose to spend your money on? Often we learn those that spend the most have the least. Until a few years ago I drove a rather old car that I had grown fond of(or used to more accurately).

A garage attendant seeing me come home in the 13 year old car said one day," you must have money". I didn't understand at first and then he continued, "The people with money know how to spend wisely and save"

matt: send us the link to your book on child rearing. should be a fascinating read.

rich or not is decided by what people perceive that you earn. if your kid is among higher earners than her parent, don't blame her for feeling poorer. we feel richer or poorer with respect to our surroundings.

you can think "i'm richer, i just don't spend it like that" all you want. but "The people with money know how to spend wisely and save" works only after the EARNing it kicked in. unless you inherited a big deal or are very old (hence compounding did the trick)... a youngish parent has to EARN it to play at the same league as the higher class. sure you can drive an old used car towards your $10 million hamptons retreat. that's call eccentric, not "penny wise".

what's a SAHMs?

"The huge negative is there will always be lots of folks who make tons more than you. You will forever live a relatively middle class life in Manhattan. "

life is much more than an F1 race towards becoming the highest earning household. if you have your needs/wants covered, why caring that others make more? some make more, some less. that's all.

"what's a SAHMs"

A housewife. Today, they prefer the more politically-correct term of "Stay At Home Mom".

stay at home mom.. people need to take it easy with these acronyms..

stay at home mom.

yes, life is so much more.

my husband was talking to a very senior partner at a top 5 firm the other day. they've worked together on a couple of cases and have become friendlyish. he asked my husband where he lives. he said PCV, decided to sell the condo and rent in 2004. senior partner, damn that was smart. but if you're interested, i know a guy who has to sell his place in Tribeca, just lowered it to under $2,000,000. my husband said thanks, i'll keep it in mind.

"i know a guy who has to sell his place in Tribeca, just lowered it to under $2,000,000"

lol, law during the day, REwhore during the night? in NYC, we will always talk about RE, no matter how the mkt is doing i'm afraid.

"Most of the parents are dual income professionals, each pulling in a 200K-500K salary."

UWSer, how much does the 2nd earner gets to keep after taxes, FICA, nanny and the like? did the math with myself and decided to step back from the labor force while having kids. the numbers weren't enticing % wise plus 0 time flexibility and slave-type vacations (less than 1 month with kids is too little imho).

"You will forever live a relatively middle class life in Manhattan."

Unless her HHI is less than $75K, she's clipping coupons, never eating in restaurants, never taking cabs, and taking vacations that only involve subway trips to the Bronx Zoo or Coney Island, she's NOT living a "middle class life in Manhattan".

so according to you Matt, here in manhattan if you don't have to look for food in the trash but you still count coins to pay your bills, you are middle class?

No.

I'm saying that Middle Class -- here in NYC as in the rest of the country -- is having a household income of under $75K ("upper middle" is incomes under $162K).

Therefore, the "middle class lifestyle" is how families making under $75K live. I doubt most people on this board can even fathom how these people live -- I suspect most of them would drop dead if they couldn't afford their cabs, Whole Foods, manicures, and "nannies".

In Manhattan if you want to save an live well you need 500K plus... Otherwise you compromise.

"Living well" is relative and subjective.

So is "saving".

There are plenty of under-75K families doing both just fine.

Still lots of comparisons of money figures here and trying to determine who's "poor" etc.

Amount of money does not a person's worth make. Children need to learn that.

cc, it's probably a very good thing to teach your children how to swear with panache, or just plain anger, depending on the circumstance.

life skill.

lowery, you got it.

ar: i'm pretty sure that we did...they both know how to handle themselves--far better than i do.

cc, awesome. congrats.

PRICE CHOPS Coming It will make all this chatter so irrelevant Huge Wealth Decline ahead if you Own.

Ask Folks in Sunny Foreclosed California about these issues..

price shops are coming? I don't think so:

Contract Signings Rise, and Deal-Watchers Exhale

http://www.nytimes.com/2009/08/30/realestate/30august.html?ref=realestate