8.8% Property Tax Hike => Iincreasing rents for all

actually no it does not mean higher rents at all. you should take some econ class what it does mean is more BK landlords

The only rents that will go up are the rent stabilization increases.

The rest is supply/demand.

Market landlords are fucked.

beatyerputz took econ. historic flush coming in nyc

I saw a brochure recently for an East Village rental building with about 3 dozen apartments, all but two or three market rate, and a rent roll of about $1.2 million. The taxes? $25,000. You wonder why pricing has tilted so much in favor of the rental market. Taxes and maintenance on a co-op/condo approach their equivalent renting value, especiallly at the low end.

Here's the econ lesson:

Current rents are a function of current supply and current demand.

Tax increases affect (non-stabilized) rents indirectly. They could increase demand (increase rents) if they fund services that make the city a more attractive place to live. Theoretically they could reduce supply (increase rents) if they lead some builders not to build because they don't expect to be able to make a profit, or if they lead some landlords abandon the building because taxes and maintenance are higher than expected rent, even at a zero value for the building.

None of these factors seems important at the moment.

Instead, the major factors will be the collapse of the bubble (which should tend to increase supply) and the recession or recovery (which will affect demand).

Current supply is artificially low due to the real estate bubble, which made owner-occupied housing far more expensive than rentals and therefore led investors to convert rental housing to owner-occupied. Moreover, the excess profits from selling to bubble-deluded owner-occupants drove land price up to levels that made rental developing unprofitable, so there has been less rental construction than otherwise. As the bubble deflates, some owner-occupied housing will convert to rental, and land prices will drop making new development profitable at lower prices.

Thus, in the next several years we can expect an increase in rental supply, tending to pull rents down.

Demand changes faster than supply and thus is usually more important in determining rents in the short term. Demand is affected by the City's economy and fashionability. If the economy stays slow, demand and therefore rents will drop.

On the other hand, if tax increases make it possible to avoid the decline in services we saw in the '70s, or if government expenditures help reduce the impact of the recession or speed recovery, they will tend to slow the decline in rental demand the recession causes.

Demand is harder to predict, since it is affected so much by the local economy, but it seems more likely to drop than increase, thus also tending to pull rents down.

Thus, increased taxes are not likely to be paid by non-stabilized renters. Instead, increased taxes will be paid by landlords out of the excess profits they've made by riding the bubble (if they bought early) or by lenders, if landlords overpaid during the bubble and cannot repay loans without bubble profits).

Dont you all realize that there will always be tight inventory of rentals in Manhattan? And as soon as the economy turns around Landlords like mysely are going to quickly and mercilessly raise rents as much as possible?

So soon you renters will be facing huge year on year rent hikes, at the same time, purchase prices on homes will be going up, lending rates will be going up so you wont be able to afford to buy and you will be getting ass raped in rent.

You will continue to pay for your mistakes in trying to time markets.

AHHHH capitalism its great when you are on top.

You misspelled "miserly"

Uh, so is this a concession that LLs have no pricing power in today's market?:

And as soon as the economy turns around Landlords like mysely are going to quickly and mercilessly raise rents as much as possible?

ah NO keep dreaming.

"Dont you all realize that there will always be tight inventory of rentals in Manhattan? And as soon as the economy turns around Landlords like mysely are going to quickly and mercilessly raise rents as much as possible? "

Yeah, that worked out REAL well for you... years of declining rents.

Nice work!

> Uh, so is this a concession that LLs have no pricing power in today's market?:

this decade's market...