Great result here. Let's have the city subsidise artificially low rents on the tax payer's dime, but not be accountable for checking if and when when OLD PEOPLE DIE. In reality, the families do not report it to anyone, including the landlord. In many cases, they just move right on in and continue to abuse the system... No wonder why taxes are so high! Audit reveals city paid $11.8 million in... [more]
Great result here. Let's have the city subsidise artificially low rents on the tax payer's dime, but not be accountable for checking if and when when OLD PEOPLE DIE. In reality, the families do not report it to anyone, including the landlord. In many cases, they just move right on in and continue to abuse the system... No wonder why taxes are so high!
Audit reveals city paid $11.8 million in housing subsidies to dead people
Read more: http://www.nydailynews.com/ny_local/2011/09/26/2011-09-26_city_paid_12m_rent_subsidy_to_dead_audit_reveals_shocking_waste.html#ixzz1Z4HgQxOb
Even the dead are scamming the city.
A shocking new audit from city Controller John Liu discovered that city bureaucrats paid out $11.8 million in rent subsidies in recent years to nearly 4,000 people too dead to enjoy them.
Instead, their landlords or relatives cashed in.
"There's no excuse for losing this much money - management lapse, willful fraud or otherwise," Liu said in a statement.
His office turned its findings over to Manhattan District Attorney Cy Vance Jr. to determine if any crimes were committed.
City officials say they've already recouped $3.3 million of the posthumous profit - and vowed to collect the rest as soon as possible.
They say they had spotted some of the errors even before Liu flagged the screwups - and began implementing safeguards to make sure the dead are never again on the city dole.
"For more than a year and a half, Finance has been engaged in a comprehensive effort to overhaul the entire ... process," said Owen Stone, a spokesman for the city Finance Department.
The problem emerged from a popular program called the Senior Citizen Rent Increase Exemption Program, which helps low-income elderly tenants pay their rents.
Tenants 62 or older who live in rent-stabilized or rent-controlled apartments and make less than $29,000 a year can sign up for the benefit.
It essentially freezes their rents and gives their landlords a tax break to cover the lost income.
Those landlords or the family members of the deceased are supposed to notify the city within 30 days if participants move or die.
Instead, the landlords of 3,801 tenants who were in the grave - some for as long as a decade - continued to cash in on the tax credits.
Liu's auditors discovered that from July 2009 to November 2010, those landlords pocketed $11.8 million in bogus tax breaks.
In some cases, it may have been greedy landlords at fault. In others, it may have been friends or family members of the deceased who wanted to enjoy low rents - and never reported the death.
"We acknowledge that we could do more than rely on landlords and family members to inform us of a tenant's passing," Stone said.
The Finance Department, which took over control of the program from the Department for the Aging in September 2009, insists it's now on top of the problem.
The department plans to run monthly verifications of participants, checking their names against the master death list issued by the Social Security Administration.
The city is also tightening internal controls to make sure it has accurate Social Security numbers for all participants.
But Liu says the program could have been expanded to help more needy seniors if the bogus benefits had been identified sooner.
"The Department of Finance and landlords may try to pass the buck, but it is the senior citizens who could otherwise benefit from [the program] who are losing out," he said.
eeinhorn@nydailynews.com
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Response by Wbottom
almost 15 years ago
Posts: 2142
Member since: May 2010
waste yes, but pennies, given the overall size of the program, and given the urgency that we not put old people out on the street due to development and gentrification---you do care we not do that, right?
or are you one of the gop town hall types who could care less?
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Response by SunnyD
almost 15 years ago
Posts: 107
Member since: Jul 2009
Your headline is pretty misleading. It's the landlords who continue to reap the benefits.
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Response by Bill7284
almost 15 years ago
Posts: 631
Member since: Feb 2009
SunnyD; You are right. It is the landlords and should not be another excuse to beat up on the elderly. Correct me if I am wrong, but when someone is deceased, doesn't the doctor/coroner have a certain time frame to contact Social Security so that number is not used by scammers? By catching the landords reaping this benefit the fees alone should replace the 11 million that was lost. In the meantime, it sounds like the city has found a way to identify the guilty.
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Response by stevejhx
almost 15 years ago
Posts: 12656
Member since: Feb 2008
"Let sick people die."
-- Ron Paul
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Response by MAV
almost 15 years ago
Posts: 502
Member since: Sep 2007
SunnyD, you obviously do not have a clue of how it works.
The "benefit" which you speak of is not a benefit at all. Getting paid by taxpayers rather than your tenant (and every 6 months, at that) is not a benefit. It is rather a burden of all taxpayers to partially subsidize an artificially low rent.
As a landlord, I am not surprised that there is abuse in the RS system. As a taxpayer I am appalled that the government is subsidizing senior citizens' rents and then never checking to see how long they live.
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Response by MAV
almost 15 years ago
Posts: 502
Member since: Sep 2007
bill7284, if the government actually checked things like rent subsidies against SS#'s like they do food stamps, they would indeed weed out a lot of bad apples. They obviously have no desire to do so though...
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Response by mutombonyc
almost 15 years ago
Posts: 2468
Member since: Dec 2008
Bill7284 AKA MidtownerEast;
One person;
"Two" usernames;
Needing double the attention;
SMH; LOL;
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Response by Wbottom
almost 15 years ago
Posts: 2142
Member since: May 2010
MAV, betcha it turns out that, in most cases where senior tenants in this program have died, where LLs have continued to collect the subsidy, the LL has known and in fact rented anew to an unrelated, new tenant---let me know when you hear more on this
and fraud of this type of backstop for the poor is disgusting, but it's often minimal when compared the the scale of the program--and the good it does--without food stamps here and now, many ex-middle class families would be starving--i like that my taxes feed these families--food stamps for booze/cigs makes for good right wing soundbitery tho
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Response by West81st
almost 15 years ago
Posts: 5564
Member since: Jan 2008
MAV: Consider this simple scenario...
1) Tenant dies.
2) Landlord leases apartment to new tenant, with rent raised by maximum permitted vacancy increase.
3) Landlord continues to collect subsidy, although new tenant pays full legal rent.
A landlord with real chutzpah might even try to deregulate the vacant apartment and collect a free-market rent while continuing to collect the subsidy, figuring that DHCR doesn't share information with the agency that issues the subsidy checks.
If you think this scenario is impossible, you haven't had much contact with City government.
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Response by West81st
almost 15 years ago
Posts: 5564
Member since: Jan 2008
Wbottom: You beat me by about twenty seconds.
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Response by Wbottom
almost 15 years ago
Posts: 2142
Member since: May 2010
you said it better--and without the bleeding heart toss-in--i cant help myself
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Response by stevejhx
almost 15 years ago
Posts: 12656
Member since: Feb 2008
There is lots of abuse of rent regulation, but dead tenants ain't one of the Biggies. I know of a number of people with rent regulated apartments in Manhattan and multiple other dwellings around the country - South Beach, Fire Island, even Arkansas....
If you can afford a second (or third) home, you shouldn't be getting the benefits of rent regulation, and rent regulation - because it limits mobility and the available supply - actually drives up rents and property prices for the unregulated. It is inherently a misguided system, as are all systems that partially regulate an industry, such as Medicare: subsidizing the few has a very high cost on the many, who are doing the subsidizing.
There are only two solutions: full regulation, or full deregulation. Full deregulation doesn't work, so ... SOCIALISM, HERE WE COME!
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Response by jordyn
almost 15 years ago
Posts: 820
Member since: Dec 2007
Note that this subsidy is only very tangentially related to rent stabilization in that the apartment in question has to be stabilized in order to be eligible. Calling it stabilization abuse fails demonstrates a significant ignorance of both programs.
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Response by SunnyD
almost 15 years ago
Posts: 107
Member since: Jul 2009
@MAV
Actually, I do "have a clue of how it works." As much as you seem bent on decrying the Rent Stabilization system; this is really about landlord abuse of the SCRIE program. The idea that landlords are "getting paid by taxpayers rather than your tenant" simply is not factual. SCRIE protects Seniors from rent increases. It doesn't mean that they no longer pay rent. The owner of the building then receives a credit against their real estate taxes from the City of New York. And, your getting paid "every 6 months" rant is a bit dramatic, as well. Lastly, while there are no automatic succession rights to SCRIE benefits; there are circumstances where surviving household members are found to be eligible for a transfer of the benefits. Not everyone who takes over a unit is out to get "You!" Landlords have plenty of recourse if they believe that someone is improperly occupying an apartment. The article you cite depicts building owners who continued to reap tax credits on units that no longer housed eligible tenants. They are the abusers! I'm sure that you are relieved to know that the City is on it's way to recovering millions from these greedy jerks. See?! You're going to get your tax dollars back after all. Oh, and at the risk of sending you completely over the edge... There's also a program called DRIE. It protects the Disabled from facing exorbitant rent increases, too. Oh, the humanity!!
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Response by rmrmets
almost 15 years ago
Posts: 93
Member since: Oct 2008
Before we pass judgement on the matter, let's ask Faye Dunaway her opinion of rent control and rent stabilization.
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Response by julia
almost 15 years ago
Posts: 2841
Member since: Feb 2007
the tenant before me was rent stabilized and paid $665.00 a month..after he/she died he raised the rent to $2500. THe greed of LL's would surely check death certificates filed with the city, state or other agencies..they know exactly when people have died, they probably know when people are going to die before they actually do..let's now feel too bad for LL's.
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Response by MAV
almost 15 years ago
Posts: 502
Member since: Sep 2007
w81/wbottom, forgive the ignorance of this honest owner. I didn't realize that was a scam dishonest owners could/would pull. Not worth the risk/karma for a couple hundred a month, imo.
Sunny, you have further proven my point, and you are in fact the one ranting. Yes, it is factual. The SCRIE portion of the rent is paid for by TAXPAYERS. I never said they no longer pay any rent ("partially" was the word I used referring to the SCRIE portion). I also never said anyone was 'out to get me' (hmm, ranting and paranoid....OK then...)
Please tell me about these 'plenty of recourse' options when you take your head out of the gutter from that below the belt ending to your last post. For the record, I do not have a problem with SCRIE, or even RC/RC for that matter, as long as there is verification (on both sides) so the system does not get abused.
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Response by SunnyD
almost 15 years ago
Posts: 107
Member since: Jul 2009
@MAV
Is this you NOT ranting?! You're funny.
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Response by dealboy
almost 15 years ago
Posts: 528
Member since: Jan 2011
Can someone outline a hypothetical example of a 1BR rental?
List the market rent, and then list what the rent controlled price would be,
and what sort of benefit the landlord gets..
I always wondered about rent control, and always assumed the LL was getting screwed by renting out his $3000 apt for $800 (for example) I'd like to see how the LL end up ahead by going with a rent controlled tenant.
Can someone provide some realistic numbers for an example? Thanks.
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Response by MidtownerEast
almost 15 years ago
Posts: 733
Member since: Oct 2010
Mutombo -- I know you were trying to be erudite, but I am not Bill and I don't have multiple handles (unlike some of your friends). LOL SMH WTF
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Response by financeguy
almost 15 years ago
Posts: 711
Member since: May 2009
There is no "subsidy" in rent stabilization. Landlords are guaranteed by law a "fair" return -- even if they overpaid in the first place.
Rent stabilization simply fixes a major problem in the residential real estate market that hurts both landlords and tenants: landlords have not been able on their own to come up with a lease form that (1) h gives tenants security that they can live in an apartment long term if they pay the rent without being gouged by landlord's taking unfair advantage of the monopoly power that a long term tenant gives them and (2) allows landlords to pass through cost increases in the long run and (3) has the landlord absorbing the risk of short term fluctuations in costs.
(In the commercial market, where tenants are larger and better able to take on (3), the standard lease solves (1) and (2). In the residential market, it solves none of these).
Rent stabilization creates by law almost precisely the lease that landlords and tenants would agree to if they trusted each other not to cheat. That is why the only landlords that oppose it are short-term small time profiteers who see a one time opportunity to profit at the expense of tenants and the system as a whole -- and why it is virtually impossible to find ANY city without some form of rent stabilization has a successful middle class rental market.
Without rent stabilization to solve these problems, tenants with choices choose to imitate rentals as closely as they can in the coop and condo market, despite the obvious inefficiency of (1) extremely high and unnecessary transaction costs, (2) placing the risk of market bubbles and plunges on undiversified investors who are less able to bear it, and (3) meetings and amateur boards attempting to replace market driven professionals.
ois allocate some of the difference between the price that landlords would be willing to accept and the price that tenants would be willing to pay -- a monopoly rents that would not exist in a competitive market -- to tenants. And instead of landlords. Since th
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Response by financeguy
almost 15 years ago
Posts: 711
Member since: May 2009
Hm, let's try again with fewer typos.
There is no "subsidy" in rent stabilization. Landlords are guaranteed by law a "fair" return -- even if they overpaid in the first place.
Rent stabilization simply fixes a major problem in the residential real estate market that hurts both landlords and tenants: landlords have not been able on their own to come up with a lease form that (1) h gives tenants security that they can live in an apartment long term if they pay the rent without being gouged by landlords taking unfair advantage of the monopoly power that a long term tenant gives them and (2) allows landlords to pass through cost increases in the long run and (3) has the landlord absorbing the risk of short term fluctuations in costs.
(In the commercial market, where tenants are larger and better able to take on (3), the standard lease solves (1) and (2). In the residential market, it solves none of these).
Rent stabilization creates by law almost precisely the lease that landlords and tenants would agree to if they trusted each other not to cheat. That is why the only landlords that oppose it are short-term small time profiteers who see a one time opportunity to profit at the expense of tenants and the system as a whole -- and why cities with successful middle class rental markets virtually ALWAYS have some form of rent stabilization.
Without rent stabilization to solve these problems, tenants with choices choose to imitate rentals as closely as they can in the coop and condo market, despite the obvious inefficiency of (1) extremely high and unnecessary transaction costs, (2) placing the risk of market bubbles and plunges on undiversified investors who are less able to bear it, and (3) meetings and amateur boards attempting to replace market driven professionals.
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Response by huntersburg
almost 15 years ago
Posts: 11329
Member since: Nov 2010
Wow, what a way to start the day with a good dose of MidtownerVirginEast and financeguy.
waste yes, but pennies, given the overall size of the program, and given the urgency that we not put old people out on the street due to development and gentrification---you do care we not do that, right?
or are you one of the gop town hall types who could care less?
Your headline is pretty misleading. It's the landlords who continue to reap the benefits.
SunnyD; You are right. It is the landlords and should not be another excuse to beat up on the elderly. Correct me if I am wrong, but when someone is deceased, doesn't the doctor/coroner have a certain time frame to contact Social Security so that number is not used by scammers? By catching the landords reaping this benefit the fees alone should replace the 11 million that was lost. In the meantime, it sounds like the city has found a way to identify the guilty.
"Let sick people die."
-- Ron Paul
SunnyD, you obviously do not have a clue of how it works.
The "benefit" which you speak of is not a benefit at all. Getting paid by taxpayers rather than your tenant (and every 6 months, at that) is not a benefit. It is rather a burden of all taxpayers to partially subsidize an artificially low rent.
As a landlord, I am not surprised that there is abuse in the RS system. As a taxpayer I am appalled that the government is subsidizing senior citizens' rents and then never checking to see how long they live.
bill7284, if the government actually checked things like rent subsidies against SS#'s like they do food stamps, they would indeed weed out a lot of bad apples. They obviously have no desire to do so though...
Bill7284 AKA MidtownerEast;
One person;
"Two" usernames;
Needing double the attention;
SMH; LOL;
MAV, betcha it turns out that, in most cases where senior tenants in this program have died, where LLs have continued to collect the subsidy, the LL has known and in fact rented anew to an unrelated, new tenant---let me know when you hear more on this
and fraud of this type of backstop for the poor is disgusting, but it's often minimal when compared the the scale of the program--and the good it does--without food stamps here and now, many ex-middle class families would be starving--i like that my taxes feed these families--food stamps for booze/cigs makes for good right wing soundbitery tho
MAV: Consider this simple scenario...
1) Tenant dies.
2) Landlord leases apartment to new tenant, with rent raised by maximum permitted vacancy increase.
3) Landlord continues to collect subsidy, although new tenant pays full legal rent.
A landlord with real chutzpah might even try to deregulate the vacant apartment and collect a free-market rent while continuing to collect the subsidy, figuring that DHCR doesn't share information with the agency that issues the subsidy checks.
If you think this scenario is impossible, you haven't had much contact with City government.
Wbottom: You beat me by about twenty seconds.
you said it better--and without the bleeding heart toss-in--i cant help myself
There is lots of abuse of rent regulation, but dead tenants ain't one of the Biggies. I know of a number of people with rent regulated apartments in Manhattan and multiple other dwellings around the country - South Beach, Fire Island, even Arkansas....
If you can afford a second (or third) home, you shouldn't be getting the benefits of rent regulation, and rent regulation - because it limits mobility and the available supply - actually drives up rents and property prices for the unregulated. It is inherently a misguided system, as are all systems that partially regulate an industry, such as Medicare: subsidizing the few has a very high cost on the many, who are doing the subsidizing.
There are only two solutions: full regulation, or full deregulation. Full deregulation doesn't work, so ... SOCIALISM, HERE WE COME!
Note that this subsidy is only very tangentially related to rent stabilization in that the apartment in question has to be stabilized in order to be eligible. Calling it stabilization abuse fails demonstrates a significant ignorance of both programs.
@MAV
Actually, I do "have a clue of how it works." As much as you seem bent on decrying the Rent Stabilization system; this is really about landlord abuse of the SCRIE program. The idea that landlords are "getting paid by taxpayers rather than your tenant" simply is not factual. SCRIE protects Seniors from rent increases. It doesn't mean that they no longer pay rent. The owner of the building then receives a credit against their real estate taxes from the City of New York. And, your getting paid "every 6 months" rant is a bit dramatic, as well. Lastly, while there are no automatic succession rights to SCRIE benefits; there are circumstances where surviving household members are found to be eligible for a transfer of the benefits. Not everyone who takes over a unit is out to get "You!" Landlords have plenty of recourse if they believe that someone is improperly occupying an apartment. The article you cite depicts building owners who continued to reap tax credits on units that no longer housed eligible tenants. They are the abusers! I'm sure that you are relieved to know that the City is on it's way to recovering millions from these greedy jerks. See?! You're going to get your tax dollars back after all. Oh, and at the risk of sending you completely over the edge... There's also a program called DRIE. It protects the Disabled from facing exorbitant rent increases, too. Oh, the humanity!!
Before we pass judgement on the matter, let's ask Faye Dunaway her opinion of rent control and rent stabilization.
the tenant before me was rent stabilized and paid $665.00 a month..after he/she died he raised the rent to $2500. THe greed of LL's would surely check death certificates filed with the city, state or other agencies..they know exactly when people have died, they probably know when people are going to die before they actually do..let's now feel too bad for LL's.
w81/wbottom, forgive the ignorance of this honest owner. I didn't realize that was a scam dishonest owners could/would pull. Not worth the risk/karma for a couple hundred a month, imo.
Sunny, you have further proven my point, and you are in fact the one ranting. Yes, it is factual. The SCRIE portion of the rent is paid for by TAXPAYERS. I never said they no longer pay any rent ("partially" was the word I used referring to the SCRIE portion). I also never said anyone was 'out to get me' (hmm, ranting and paranoid....OK then...)
Please tell me about these 'plenty of recourse' options when you take your head out of the gutter from that below the belt ending to your last post. For the record, I do not have a problem with SCRIE, or even RC/RC for that matter, as long as there is verification (on both sides) so the system does not get abused.
@MAV
Is this you NOT ranting?! You're funny.
Can someone outline a hypothetical example of a 1BR rental?
List the market rent, and then list what the rent controlled price would be,
and what sort of benefit the landlord gets..
I always wondered about rent control, and always assumed the LL was getting screwed by renting out his $3000 apt for $800 (for example) I'd like to see how the LL end up ahead by going with a rent controlled tenant.
Can someone provide some realistic numbers for an example? Thanks.
Mutombo -- I know you were trying to be erudite, but I am not Bill and I don't have multiple handles (unlike some of your friends). LOL SMH WTF
There is no "subsidy" in rent stabilization. Landlords are guaranteed by law a "fair" return -- even if they overpaid in the first place.
Rent stabilization simply fixes a major problem in the residential real estate market that hurts both landlords and tenants: landlords have not been able on their own to come up with a lease form that (1) h gives tenants security that they can live in an apartment long term if they pay the rent without being gouged by landlord's taking unfair advantage of the monopoly power that a long term tenant gives them and (2) allows landlords to pass through cost increases in the long run and (3) has the landlord absorbing the risk of short term fluctuations in costs.
(In the commercial market, where tenants are larger and better able to take on (3), the standard lease solves (1) and (2). In the residential market, it solves none of these).
Rent stabilization creates by law almost precisely the lease that landlords and tenants would agree to if they trusted each other not to cheat. That is why the only landlords that oppose it are short-term small time profiteers who see a one time opportunity to profit at the expense of tenants and the system as a whole -- and why it is virtually impossible to find ANY city without some form of rent stabilization has a successful middle class rental market.
Without rent stabilization to solve these problems, tenants with choices choose to imitate rentals as closely as they can in the coop and condo market, despite the obvious inefficiency of (1) extremely high and unnecessary transaction costs, (2) placing the risk of market bubbles and plunges on undiversified investors who are less able to bear it, and (3) meetings and amateur boards attempting to replace market driven professionals.
ois allocate some of the difference between the price that landlords would be willing to accept and the price that tenants would be willing to pay -- a monopoly rents that would not exist in a competitive market -- to tenants. And instead of landlords. Since th
Hm, let's try again with fewer typos.
There is no "subsidy" in rent stabilization. Landlords are guaranteed by law a "fair" return -- even if they overpaid in the first place.
Rent stabilization simply fixes a major problem in the residential real estate market that hurts both landlords and tenants: landlords have not been able on their own to come up with a lease form that (1) h gives tenants security that they can live in an apartment long term if they pay the rent without being gouged by landlords taking unfair advantage of the monopoly power that a long term tenant gives them and (2) allows landlords to pass through cost increases in the long run and (3) has the landlord absorbing the risk of short term fluctuations in costs.
(In the commercial market, where tenants are larger and better able to take on (3), the standard lease solves (1) and (2). In the residential market, it solves none of these).
Rent stabilization creates by law almost precisely the lease that landlords and tenants would agree to if they trusted each other not to cheat. That is why the only landlords that oppose it are short-term small time profiteers who see a one time opportunity to profit at the expense of tenants and the system as a whole -- and why cities with successful middle class rental markets virtually ALWAYS have some form of rent stabilization.
Without rent stabilization to solve these problems, tenants with choices choose to imitate rentals as closely as they can in the coop and condo market, despite the obvious inefficiency of (1) extremely high and unnecessary transaction costs, (2) placing the risk of market bubbles and plunges on undiversified investors who are less able to bear it, and (3) meetings and amateur boards attempting to replace market driven professionals.
Wow, what a way to start the day with a good dose of MidtownerVirginEast and financeguy.