NYT article on deregulation of apartments

https://www.nytimes.com/interactive/2018/05/20/nyregion/affordable-housing-nyc.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region&region=top-news&WT.nav=top-news

Tenants seem less protected now than 20-30 years ago. And yet, tenants are more at risk than ever of losing their homes due to unscrupulous owners and increasing rents. This "cozy" relationship between landlords and city agencies is a shame. Landlords have become more institutionalized which gives them even more financial and political power than in past years.

I wonder whether the State of New York or the Federal Government could get involved to try and fix this obvious corruption.

Haven't we learned anything? Gentrification is not a panacea and leaves both winners and losers in its wake. In addition to losing rent-regulated tenants, many neighborhoods continue to lose Mom & Pop stores that contributed much to the character of these areas, replaced by chain stores that eventually leave as even they cannot afford the higher rents. I suspect some of these landlords wish they had those Mom & Pops back as they had roots to the neighborhood that faceless chain stores never will.

This country is built on property rights rather than usurpation of private property by govt. Rent regulations are a form of usurpation of private property by govt. Bleeding hard liberals, who support rent control, can offer their own apartments for the rent control program or at least take in a homeless person in their apartment.

300, I support rent controls because they are the law. Investors bought these properties knowing they were subject to rent regulations. Would you give them a windfall by allowing them to violate rent regulations to increase their returns?

To try and circumvent these laws for personal gain while causing great harm to individuals and families is evil. We should all support law abiding property owners and denounce those who chose ignore these laws or worse.

1. Rent regualtions had a time limit but it gets renewed by legislative act.

2. Rent regualtions allow for rent increases determined by rent guideline board which is full of socialists and does not approve much increase.

What do you think of that? I view that as continuous usurpation of property rights by legislative acts bordering on communism.

I am not supporting circumventing the laws (punishment is pretty harsh anyway) but when laws themselves are unfair - as in ability to pass on rent control benefit to your children or care taker etc - what do you propose to be the remedy?

In answer to your question about windfall, the property was partially taken away some time from the original owner by rent regulation, and when they sold they knew that the rent regulations may be abolished someday as was told to them when it was taken away. The buyer bought the option for rent deregulation some day and they should fully reap the windfall. The property does not belong to the govt not did the govt decide the price of the property when it changed hands.

300, there is no remedy. Rent regs are the law. Period. There is no "option" as you call it other than the option to obey or disobey the law. If a buyer paid a premium because they hoped to break the law to gain a better return, that's on them.

How has NYC suffered from rent regulation? Are property owners suffering? Few would say yes. Rent regs may someday be a thing of the past. So be it but at least let it die an honorable death.

What stood out to me is that the article doesn't consider how supply has been constrained in some of these neighborhoods via landmarking regulations. There's a huge demand to live in some of these neighborhoods, and limiting supply through landmarking just makes the financial incentive to deregulate existing rent regulated apartments that much greater. It's not fair to anyone, certainly not the poor tenants who are caught in the crossfire.

Rent regulation and landmarking are similar to me in that they both infringe on private property rights. But I know I'm in the minority, at least in downtown Manhattan, on this subject.

Yes, jas. Landmarking has been used as a ruse to protect the wealthy. Private property rights has been used as an excuse to discriminate and I do not feel sorry for the owners who have little to complain about IMO.

Jas, I think landmarking and building height restriction are mostly two separate issues. Building height restriction combined with FAR prevents overcrowding and excessive load of infrastructure such as schools and transportation. Landmarking, where you can not use the FAR allowed to other buildings in the same area is indeed property right infringement but to a much less degree than the communist rent control regulations.

My $0.02 on long-term leaseholders of rent regulated apartments: be thankful and count your blessings for everything you've received. You've had 10, 20, 30+ years of opportunity to improve your stations in life (while enjoying below-market rent) and buy a home or move out of the rent regulation complex so that other needy people will be able to enjoy the same opportunity to get a leg up. Sure, there are cases where people are too frail and disabled to move out of the system, but this is a relative minority. The vast majority of people in rent regulated apartments are able-bodied, able-minded people who stay put with the EXPECTATION that the gravy train will last forever. I don't feel sorry for these people. Why should any able-bodied/minded person feel entitled to a lifetime of cheap rent subsidized by tax payers?

I get it, we're talking degrees of infringement, landmarking vs. rent laws. Both infringe on private property rights, imo, and I agree with 300, the far worse offender is the rent regulation. It still shocks me that reasonable people think this is ok. And to hejiranyc's point, we know able bodied young people who were just bought out of their rent regulated apartment for over $1MM. Certainly not the intent of the law, and it was to make way for luxury development of the building. In this particular neighborhood, development is constrained by landmarking, and leads to a situation where the market clearing price is set quite high - so...now the building goes from 15 apartments, to 6. And the range of prices that these units will command make irresistible incentives for the unscrupulous landlords to act in these illegal and immoral ways. And the City essentially shrugs its shoulders while BdB demands more affordable units. But he and the City Council landmarked the South Village, essentially casting it in amber (after two failed attempts), in exchange for 500 affordable units - that won't even be affordable for the types of tenants who are displaced at Grove Street - the income levels are still too high (I'm guessing). These high demand areas need MORE development, not less, to promote affordability. On FAR, State Senate looks to have voted to increase FAR in Manhattan...wonder how far that will go. Downtown Manhattan's landmarked districts could handle a lot more density, but the single family owner of a brownstone won't like it. Nor will the loft owners in Soho. Gawd forbid someone mess with their sight line.

hejiranyc et al, I m not sure what the point is about "able-bodied people" enjoying the benefits of a rent regulated apartment. If someone handed you a lot of money with no strings attached and it was completely legal, are you saying you would turn it down because you were undeserving? How many people would do that?

It's fine to criticize the government for passing what you feel are bad laws but please let's stop demonizing people who are acting in a completely legal manner in order to benefit their lives and the lives of their families. Landlords who break the law and bend the rules for pure economic profit are the ones less deserving of our sympathies.

well said, ximon.

The laws are unfair and a large percentage of renters certainly misuse it. The laws, renters who benefit from it and illegal eviction by landlords all need to be criticized. Should not the onus be on the tenant to prove every year that they deserve rent stabilization rather than the owner who has to prove that they do not? NYC is full of socialists anyway when it comes to other people’s money and the laws reflect that.

Many of these rent regulated tenants have beautiful homes in the Hamptons. Many are well off.

They are not socialists. If they were they would be willing to at least agree to let a needy family occupy the apartment when they depart rather than passing it to an heir.

They are only socialists when it comes to other people’s money and property.

I really didn't intend to demonize anyone who takes that type of trade, but to point out there's a big gap between the intended rationale of these laws, and the people who benefit from them. The system of incentives that get created by all of these well intentioned market interventions really seem to result in a less affordable housing market for all. But can certainly agree that the laws need to be enforced by the City that makes them...but from this article, it is clear that they don't, and it is the most vulnerable among us who suffer it.

Just let a politician running for office say they want to change the rent control laws, or make it more equitable. They will be run out of the city.

Ximon- the old New York that we knew, when Mama Leone lived on Sullivan Street, with no fear of losing her home are over... I guess I'm showing my age. But I miss the New York I knew in the 80s, when investment bankers lived next door to school teachers. I'm glad I got to experience it, being 18, a musician and broke living in the East Village was awesome! Now a generation of young broke creative types get to live in Bushwick.... Only 2500 a month for a run down one bedroom ( ;

Rent control and rent stabilization? Programs that could have been very good but unfortunately through the abuse of the recipients and the mismanagement of government we have a mess (mostly gov). Nobody cared when apartments were $200 to $600 per month. However when you add a zero to those numbers the entire situation changes.

Well, there are two sides to every story. I see programs like rent control, rent stabilization, hotel stabilization and the loft law as helping to preserve the character of certain neighborhoods that would have changed forever for the worst. Tenant protection laws made Soho, East Village, Tribeca, Noho, and many other neighborhoods the cool places that they still are today. And abuses by rent stabilized tenants pale in comparison to those of landlords who have done pretty well for themselves in spite of the how "unfair" these regulations may be.

Doesn't anyone know that many people can become homeless and even die as a result of eviction? Families can be torn apart. Jobs lost. Fix these laws to reduce corruption? Certainly. Eliminate them? Only if you can live with the consequences. For far to many of our fellow New Yorkers, it is a very thin line between homelessness and hopelessness.

Ximon, Looks like you want to offer your apartment to the rent stabilized program and downsize.

I agree with Keith; I'm glad I got to experience that New York too! But I think a lot of the quality-of-life problems with New York are density problems; when I was younger and attracted to the City, I didn't realize another million-plus people back in line behind me were going to think that same thing.

We are going to have to come up with ways to house and transport those extra people (roughly defining everyone who came after me as "extra," says the curmudgeon) because they're not moving out, and our attempts to stretch our current systems at the margin really aren't cutting it.

The rent stabilization system should be reformed or preferably phased out. What started out as a program to limit price gouging has turned into a gravy train for a select group of people at the expense of everyone else. Some of these people are living in large spaces in prime areas and are paying far below market rate. This is not an appropriate use of state power in my view.

Ali, as someone noted here, density is not going down. but up. When older buildings are torn down, they inevitably get replaced by new buildings of much higher density. And as mentioned by jas, the NYS legislature is looking to eliminate FAR requirements:
https://therealdeal.com/2018/03/27/state-senate-wants-more-nyc-residential-towers/

And then there are these new co-housing and micro-apartment projects:
https://ny.curbed.com/micro-apartments-nyc

The solution to rent controls is the same it's been since the programs were created. Build enough affordable housing so tenants have choices.

It is the city regulations such as ADA compliant bathrooms which increase the cost to build. That is where the city should be focusing the efforts. It is not govts job to subsidize housing for people who want to live in prime areas. City forgoes a huge amount of taxes by having affordable housing in prime areas. Rich who want to integrate with poor can move to poorer areas and feel good.

Yet another reason the rent stabilization is bad public policy: the costs of it are almost entirely hidden. No cost/benefit analysis can be done to determine whether it is worth the cost and how it compares to alternatives forms of subsidization. Perhaps the amount of foregone tax revenues could be quantified with a lot of research, but even that is murky. There is also the issue of increased cost to market-rate renters, who must compete for a diminished supply after so many units are effectively off the market.

If the government must be involved in subsidizing housing, then it should be done through vouchers along with strict income and asset limits. For example, people with vacation homes are ineligible for public assistance with their housing.

I couldn’t agree more. One would think that anyone making more than $100k does not get a voucher as they can easily live in a cheaper area and commute. Current, rent stabilization protect people making upto $200k. That is crazy.

The numbers of rent-controlled and rent-stabilized apartments are going down in proportion to the pool of available renters, so if they're the problem (which I'm not sure they are) then they're a problem that time is taking care of. Some twenty percent of the rental stock has dropped out of the control/stabilization system in the time I've lived here.

The problem is that we need to build more, significantly more, and there are strong political disagreements about how to do that. Look at the article that @ximon linked to about growth measures -- it says those measures aren't going to pass the state legislature.

300: "The laws are unfair and a large percentage of renters certainly misuse it."
streets: "Many of these rent regulated tenants have beautiful homes in the Hamptons. Many are well off."

It would be helpful if you could cite quantifiable facts to back up your opinions. (NY Post headlines do not count.) Of all the people I know living under full rent control, not one of them makes over $25k, or has a home, beautiful or otherwise, in the Hamptons. I'm not citing that as a definitive refutation, as I don't know how representative my tiny sample is.

Individual ownership of real property is a carefully constructed fiction. In truth, all land is owned by the State, and your taxes should be considered the rent for your ground lease. The State may at any time increase, decrease, or take away your presumed rights through any number of methods (landmarking, FAR rules, eminent domain, war, etc.). Given that the amount of land is essentially fixed, it's a zero sum game: for everybody who gets a benefit from some action, there will be somebody who loses a benefit.

Aaron, So you would agree that the threshold for rent decontrol should be much lower than $200k income if everyone is making $25k? Say to $75k.

I agree with you that govt can take away your property by increasing the taxes. However, they do have to keep some version of property valuation with carve outs in mind and apply equally.

In fact, nyc has been taking away property with real estate taxes roughly doubling in the last 10 years or so.

I honestly don't know what the threshold should be for decontrol, though 200k seems too high. It's a form of welfare, and as such should be tied to a form of means-based tests, with some indexing. The ability to 'inherit' the controlled apartment needs to be looked at as well. I haven't studied it closely enough to have a strong view as to what the threshold number or rules should be. If there are any good academic studies, I'd be curious to read them. But really, this is a relatively small problem that is slowly going away (though it affects some of the most vulnerable): full r-c units are around 1% of the apartment stock in the city, and the number is decreasing. I'm more concerned if the number of rental units declines (because developers are building condos for purchase, rather than rental units), as that significantly raises the bar for lower-income people to afford basic housing.

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It doesn't strike me as usual that the government limits the use of property as a business and how much money an owner can charge for the use of the property. Someone who says that he should not have any limits on his ability to make money doesn't recognize that an unfettered discretion creates external problems that have to be addressed by others, especially in the case of housing.

The landlords profiled don't care. The ends justify the means. The people they have harassed don't have a house in the H.

I meant unusual.

Here, here, chess. Like it or not, the government will increasing "intrude" on the free market especially in NYC where lower and middle class votes make all the difference.