Small Landlord Supports Bigger, Wealthier Families

Sounds like an editorial from "Off The Wall Street Journal". Or Crain's. So which is is it: parody, or delusion?

good article too bad no one is going to read it

pretty realistic actually...

msg of letter:

please change rent control/stabilization laws now. this will provide me an instant windfall. i bought the buildings i own, which have rent/control/stabilized tenants, at prices that consider cap rates which assume continual stabilized rents. if i can get those laws changed, through whatever stories i tell and means i can exploit, my buildings will increase in value instantly and appreciably.given i get a windfall if you listen to me and do as i say, i am a very credible source.

what a fucking joke!

I agree with yikes.

...Or, leave the system in place and have a city with a housing stock that is literally falling apart due to almost 100 year old laws and 100 years of artificial pricing. Waht do you think is going to continue to happen?

I love it when the RS leaches use "Landlords will make money" as the reason why we should not get rid of RS, esp when its the only reason. The fact that they only have that to stand on is pretty telling itself...

There's nothing I disagree with in this article.

mav--there is plenty of logic for the rent stabilization laws. And I dont qualify for rent stabilzation, thanks--in case that would define me as an RS leech (sp). So I have no dog in this hunt.

and last i looked we dont "have a city with a housing stock that is literally falling apart due to almost 100 year old laws and 100 years of artificial pricing'. In fact the housing stock looks pretty well to me, in general.

But, hey, youre a landlord, so you do very much have a dog in this hunt--you own buildings bought cheap, bc you have RS tenants--if you can throw those tenants out or jack their rent apprciably, you will experience a windfall. any mystery that they're RS leeches to you?

next time buy a higher-end building, with no RS tenants. You'd have no windfall option if the laws change, but then we wouldnt have to hear your self-serving RS leech rant.

and be a big boy, RE mogul. take care of your buildings, RS or not.

I agree with yikes, and like yikes I'm not subject to rent stabilization nor am I eligible.

RS has been a bonanza for tenants who were able to get into the program. It can easily add up to hundreds of thousands of dollars in benefits over a lifetime plus possible buyout. Economically it has many of the same characteristics of owning. It's catnip for politicians because it allows them to buy votes without actually having to fund a government program.

Unfortunately, this program has many hidden costs and side effects. As we all learned in economics, price ceilings are harmful to the proper functioning of a market.

1. Has discouraged construction of rental buildings for decades. Hence lower supply and higher rents than we would have had if RS did not exist. What developer in his right mind would want to build non-luxury rental housing when the threat of being stabilized exists?
2. Higher rents for market-rate tenants due to half the rental supply being off the market. There are essentially 2 rental markets in NYC, which can be seen if you graph the distribution of prices. The RS increases have not kept pace with inflation. This has resulted in anomalies such as the avg monthly rent for a stabilized unit in Manhattan being 1200/month less than market.
3. RS not based on need, so some people using the program who can afford market-rate rent.
4. Encourages fraud such as tenant renting apartment out to friends and relatives while having primary residence elsewhere. The fraud is worse the further below market-rate the rent.
5. Most people do not have access to the RS program, because the apartments often don't go to market when they become vacant, but rather to friends/relatives of departing tenant or broker. In other posts, I suggested a lottery system similar to the 80/20 program to mitigate this.
6. Violation of landlord property rights. Not all landlords are evil--as with any other profession, there are good and bad landlords. It is essentially taking private property for public use without compensation.

Rent regulations were promulgated BECAUSE there was a severe housing shortage, and more so of non-substandard housing, under the free-market system that preceded it. That's the reality, without ideology or 2-axis economic theory.

1. Rental building construction is encouraged by high rents. New apartments are not forced into rent regulation. Your argument is that rent regulation causes high market rents. Therefore you believe that rent regulation encourages development of new apartments. There is no other logical output from those inputs.

2. Half the rental supply isn't "off the market". It's occupied. There are essentially thousands of markets in NYC -- divvied up by area, housing type, amenities, interior paint colors, whether livestock can be kept openly, etc. You make no case for wildly overpriced market rents being the correct and appropriate numbers ... you merely show the effects of a housing shortage. That's exactly why profiteering was stopped in the first place.

3. Rent regulation was not instituted to provide for lower-income people. It was instituted to regulate rents on older apartments in multiple dwelling buildings. In the late 1990s, landlord lobbyists succeeded in winning legislation that invades the privacy of RS tenants and evicts them if income criteria isn't met. So now they're claiming that RS doesn't serve the needy, as if it was intended to.

4. Market rate encourages greater fraud. Try not bribing all the management and maintenance staff and four sets of architects and engineers if you want to so much as sneeze in a market-rate building. Try not hiring an "expeditor" if you have any alterations. [I wish I could use several sets of quotation marks on that one.]

5. Everyone has access to RS apartments. Get off your ass, work the streets, work your networks, chat with superintendents, pay some asshole an inappropriate rental agent fee, check the obituaries, expand your search to other neighborhoods, lower your expectations for granite counters and the like.

6. Landlords have the rights granted or denied to them by the laws of the jurisdictions in which they operate. Nobody is forced to own rental property in any particular place. Those lucky enough to inherit it are entitled to sell it (if the property is in good legal standing, of course). When and how did the property become private, by the way?

In short, don't believe what you read on those crazy bumper stickers plastered beneath the gun racks on F150s driven by Liberian morons. There are very few property rights. Keep your front lawn mowed to 3/8 - 5/8 of an inch, like it or not. Tough noogies.

apts which can command >2500 per month are not subject to RS laws.

this alone throws a wrench in most of your points. There are few rich people who want to live in an apt which wont command 2500/mo!

Fraud? pls, it's minimal to meaningless. in fact, the further below market the rent is, the more closely the tenant is vetted in the hope that it can be proved they no longer qualify--LL's can request tax returns even at this pt to insure household income doesnt exceed limits. LL's with older RS leases watch very carefully for violations by tenants which would allow eviction or RS to be nullified.They get a windfall if they can invalidate RS status based on income occupancy etc.If anything dirty goes on it's usually on the part of LL's who have been known to move drug gangs into building to terrorize RS tenants into moving, among other illegal tactics.

LL's can increase RS rents by cost of any renovations/48. This incents to renovate, esp if new rent can exceed the 2500 threshold to go off RS. And evil LL's (not all of them--not mine--great company) hire their bro-in-laws to do work at excessive rates to game this feature of the law and get leeway to raise rents to market rates.

it's just laughable that you think developers are chomping at the bit to build rental properties where units cant command rents of 2500/mo or greater.

get rid of RS and theyll be building 1500/month apts all over the city! ha!

Yes, I am a LL, although I have very few RS apartments. My "dog is this race" is not only for my own profit (shame on me, right?), but also in being the one who gets the phone calls and emails from the other tenants in my buildings, who have to live with some of the things which go on. I have hundreds of tenants in a pretty good cross sampling of Manhattan, and I deal with all of them directly. When I say that RS tenants are the only ones who benefit from the system, I have a pretty good inside perspective.

As for our housing stock, I would love to show you the difference of a RS apartment and a regular one. Have you seen the stats on energy consumption/pollution of older nyc buildings vs new ones? Do you know how many development sites are stalled indefinitely because of 1 or 2 RS/RC tenants? It is often times mind boggling to see what is out there, but I realize very few people see it from the inside like I do.
Furthermore, your statements are offensive. I have never once thrown a tenant out. In fact, I help older (and other) tenants out in ways which you could not imagine unless you were in nyc property management . Nothing was bought "cheep" unless you are comparing higher prices of today, when I am still trying to buy, and in a few years you will tell me today's (historically high) prices are cheep. Your assumption that I don’t take care of my buildings cannot be further from the truth. I would challenge you to find many buildings as clean, which have hallways repainted as often as mine, whose staff is as well taken care of, and whose tenants are as happy.

Not every LL is bad, just like I know not every RS tenant is bad. I just have the data to know the %'s

>some of the things which go on.

Such as?

I purposely left out examples, even though I have an arsenal full, as I believe no true progress will be made on this (or any) debate by looking at the individual examples, because everyone does has their own dog in the fight on some level. We are a city of millions of individual examples. However, we must weigh in on the pros and cons of the larger issues to make any progress, and that is rarely what the debate is ever about from either side.

No examples?