Bankruptcy Case Poses Risk to Stabilized Tenants

There's always risk involved here

The NY State Court of Appeals finally ruled on this case: rent-stabilized leases are public assistance not assets. Hence they cannot be used in bankruptcy. Ms. Santiago's son will be able to inherit her lease on a 2-bedroom apartment in the East Village currently renting at $703 per month.

http://www.nytimes.com/2014/11/21/nyregion/rent-stabilized-lease-cant-be-seized-in-bankruptcy-new-york-state-court-rules.html?_r=0

Public GOOD.
Good!

So all you rent-stabilized tenants are on public assistance! It's a strange public assistance program that has no income limits when the rent is below $2500/month (and an income limit of $200k/year if the rent goes above $2500/month. ) So there are some wealthy people on public assistance. And who ever heard of a public assistance program whose benefits can be "inherited" by a family member for life?

If rent stabilization is public assistance, then shouldn't the public be paying for it out of their taxes?

We are. The RE taxes for a rental building are based on income. The landlord pays less, so the rest of us pay more. OK by me.

Is it OK by you that there are no income limits if the rent is below $2500/month? How can it be a public assistance program if it is not based on need?

Lots of public assistance isn't based on need. The tax code is full of them. E.g., my living in the RE I own throws off about $42,000 per year in tax-free income.

Or take that $88,000,000 apartment at 15 CPW. They save $68,000 per year in RE taxes via a 421a abatement, intended to incent development in slummy neighborhoods.

I am opposed to anyone receiving public assistance except in unusual situations where someone is truly in need. That includes rent stabilization, special tax deductions targeted towards specific groups, 421a, and on and on.

Also, public assistance should be clearly funded, so the taxpayers/voters know how much it costs. The rent stabilization program is funded through a hidden tax (tax breaks for owners of stabilized buildings resulting in higher taxes for everyone else). Someone would be hard pressed to define the exact cost of rent stabilization to the taxpayer.

>I am opposed to anyone receiving public assistance except in unusual situations where someone is truly in need.

What about people who pay no taxes on their income from municipal bonds?