Another death knell for sellers?

Let me ask you this: Why is the NYC assembly supporting people who make close to $240K. This is just beyond me.

Nothing like more middle class subsidies. Some people will never pay their own way.

I think the Assembly leadership crafted their bills to leave Senate Democrats some room for negotiation, because the party split in the Senate is so narrow. The Senate won't even take up the issue until after budget season - most likely, not until April - and when they do, the income and rent thresholds will probably change, as will the scope of re-regulation.

In the end, I think we'll see a result that looks pretty much like indexing, so that an apartment won't be classified as "luxury" - or a tenant as "rich" - just because of inflation and statutory rent increases. The direction for the last 10-20 years was deregulation by attrition. That was Joe Bruno's strategy after he couldn't kill stabilization outright. If the Democrats simply stop that process, they'll consider it a major win, and it's probably as far as they should go - for economic as well as political reasons.

if people make $240k why aren't they buying?

Rent control kills the soul. I know a guy who was paying $800 for a one bedroom while his neighbors upstairs were paying $2400, and this was a while ago. The guy had quite working in his 50s and was trying to live off of the free food given out at art gallery openings. There is something to be said about paying market rates so that you get up every morning and figure out a way to earn a living.

"if people make $240k why aren't they buying?"

Because they hope to put something on someone else's back.

From James Joyce's novel, Ulysses:

" — He knew what money was, Mr Deasy said. He made money. A poet, yes, but an Englishman too. Do you know what is the pride of the English? Do you know what is the proudest word you will ever hear from an Englishman’s mouth?
.
.
He tapped his savingsbox against his thumbnail.
— I will tell you, he said solemnly, what is his proudest boast. I paid my way.
Good man, good man."

Now for Americans, I suppose their proudest boast is that they cheated the most men on earth. Look at our Mr. Madoff, a model for future generations.

Rent stabilization is a stupid idea. It does nothing but make non-stabilized apartments more expensive because it creates an artificial shortage of units. No one will want to build more apartments if they think they might be regulated in the future.

Very dumb.

PAS, for those of us who are hoping to pay for college (after all of the funds saved saved were decimated by the market decline) and who actually purchase the food that we and our children eat, It is hardly soul killing to pay 2100 dollars a month for an apartmnet where the kids share a room (even though they are of different genders). Moreover, We are not in a "luxury" apartment. We still manage to get out of bed and go to work in the mornings, even though we are stabilixed.

stevejhx
5 minutes ago
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Rent stabilization is a stupid idea. It does nothing but make non-stabilized apartments more expensive because it creates an artificial shortage of units. No one will want to build more apartments if they think they might be regulated in the future.

Very dumb.

Yeah I know, we've had rent stabilization for how many decades now, and there's been no new apartment building at all.

karen23,
Your subsidy raises the cost of housing for the everyone else, regardless of whether your kids share a room. It's just the way it is. Surprisingly, your subsidy also causes the value of my owned apartment to be higher so you actually help me out. It is a quandary but there it is. Giving subsidies to people who make $240k a year is ridiculous.

Yuor college costs have nothing to do with this discussion. Please attack the universities who are sitting on billion dollar endowments and will not lower tuition a penny.

karen, don't worry, you go to work every day, do the right thing for your family and your kids and be proud of doing so. Angry people like 407PAS will always be upset at one thing or another - don't take it personally

Pas..Glad we can help you out!

ps karen, next you'll have someone probably telling you that you don't have the right to live in Manhattan, what is wrong with Queens or Staten Island or the suburbs, etc. That'll probably come from someone who was born in NYC, lived here for a long time, but isn't in a rent stabilized apartment and feels cheated, not by the system but because he was too "proud" (read: stupid) to live in a stabilized apartment that was available to him just as much to anyone else in the past.

"we've had rent stabilization for how many decades now, and there's been no new apartment building at all."

No, actually. Any building built after 1972 is not subject to rent stabilization.

Get your facts right, ranter, before you rant.

ranter,
Ha, who says I am angry, I am only telling you the cost of your system. Housing costs would be lower for everybody if rent stabilization were eliminated. But, that will never happen, so I will continue to buy. I am proud to own and pay market rates, without these needless subsidies. Other people, even when they are high earners, like to take advantage of others.

I knew a guy who was using his rent stabilized Stuyvesant Town apartment for trysts with his girlfriend while he lived in his house out in New Jersey. He dropped dead of a heart attack in his 50s. Perhaps the deceit finally got to him.

Rent stabilization is a delightful topic, largely because the ignorant expound with such authority.

Don't swallow the rhetoric from either side. Arguments about justice from the left and economic efficiency from the right are smokescreens. It's all about money.

Obviously, if you were starting a city from scratch, you would never implement a rent-regulation system like New York's. You probably wouldn't implement any system at all. That's the easy part. The question is how you mitigate the adverse consequences of unwinding an absurd system. And, from a practical standpoint, how do you achieve a just outcome on a subject where so much money is riding, through a political process that is dominated by money itself? Not easy.

Of course, there was also the case of Carly Simon, who was fighting to hold on to her rent controlled apartment, with a rent of something like $300, if I recall correctly. Of course, poor Carly Simon needs help. Some people have no shame.

I should have said mistress, not girlfriend, the guy was married, of course.

They should have rent stabilized apartments for people who really need it (handicapped, elderly etc). Not for people making $240K.

knew a guy who was using his rent stabilized Stuyvesant Town apartment for trysts with his girlfriend while he lived in his house out in New Jersey. He dropped dead of a heart attack in his 50s. Perhaps the deceit finally got to him.

Perhaps those who use the system for deceit should be attacked. Not those who are trying to live a decent, not extravagant, life in their hometown.

407PAS
3 minutes ago
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ranter,
...
I knew a guy who was using his rent stabilized Stuyvesant Town apartment for trysts with his girlfriend while he lived in his house out in New Jersey. He dropped dead of a heart attack in his 50s. Perhaps the deceit finally got to him.

Ok, great example. I know a woman, her name on streeteasy is karen23. She has two kids of the opposite sex who share a room. She goes to work every day to make a living so she can pay for their college education.

stevejhx
"we've had rent stabilization for how many decades now, and there's been no new apartment building at all."
No, actually. Any building built after 1972 is not subject to rent stabilization.
Get your facts right, ranter, before you rant.

Very very interesting. I moved into a building built in 2007 and paid a rate competitive with the rest of the local market; however, my lease is a rent stabilized lease.

1972=2007?
So much for facts.

Ranter, Thanks for your support!

Sure, people who live in rent stabilized housing go to work. That does not make their system fair. I have to say that the rent stabilization system lends itself to a lot of abuse.

"They should have rent stabilized apartments for people who really need it (handicapped, elderly etc). Not for people making $240K."

Are you kidding? People who get a rent stabilized place never let go of it, especially if they can make a buck renting the thing out illegally. Those people never give a thought to the handicapped or to the elderly.

Pas, Finally we agree! There is alot of abuse in the system, let' not throw the baby out with te bathwater though.

I know a 92 year old man who has lived in the same apartment since 1970 and is rent controlled and pays about $1200 per year, month in month out. He earned his US Citizenship by fighting in World War II and later went on to a US civil service job until retirement.

Should he be thrown out like Carly Simon? And how does his rent raise rents for others in his building - this man has been in there for nearly 40 years and the newcomers barely stay 2 and vacancies in the building are relatively high. How does his situation raise rent for others?

karen23,
I doubt that we agree on anything. Are you handicapped or elderly? You seem to have some need for the income limits to be raised. The whole system of rent stabilization should be dismantled but that will never happen. All of us here who see the absurdity of this system should contact our representatives to tell them not to raise those limits to $240k.

"my lease is a rent stabilized lease."

Certain 80/20 buildings agree to market-rent stabilization as part of a tax-break deal with the city government. Related Rentals is one of the prime user of that program. It is not rent stabilization in the general sense; it is a VOLUNTARY time-limited program for a very small number of buildings in the city, which set aside 20% of their apartments for low-income households in exchange for tax breaks.

I assume, then, that you are a low-income household.

Get your facts right.

Oh and Julia, they are buying, that's why there is a subprime mortgage mess, do the math, apaartments don't come cheap. Don't forget to include taxes in your calculation. I guess all of those families don't want to live on the knive edge of forclosure. Of course they could leave manhattan, let's force out more taxpaying families there's a plan.

The other truth that has not been brought up is that rent stabilization (or control) destroys the housing stock because artificial limits on rent delay needed maintenance on buildings. This is easy to see when looking at any recently converted condos. I had thought of buying into such a building on the Upper West Side but was put off by the decrepit conditions. Somehow, those wonderfully subsidized rents were not allowing the building to be maintained properly.

PAS, Actually, I don't need the income threshold to be raised, just the upper rent limit. Actually, am handicapped but I don't trade on that

stevejhx
1 minute ago
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"my lease is a rent stabilized lease."
Certain 80/20 buildings agree to market-rent stabilization as part of a tax-break deal with the city government. Related Rentals is one of the prime user of that program. It is not rent stabilization in the general sense; it is a VOLUNTARY time-limited program for a very small number of buildings in the city, which set aside 20% of their apartments for low-income households in exchange for tax breaks.
I assume, then, that you are a low-income household.
Get your facts right.

Well, my building isn't owned by Related.
"It is not rent stabilization in the general sense": nice parsing of words to fit your "facts"
"I assume, then, that you are a low-income household." No, I'm not, I made over half a million in 2007 and nearly $300 in 2008.

I'm off to work now.

Stabilization does not delay maintence, if anything it encourages it. The MCI's are passed like they are going out of style whether they are needed or not to get the apartments over the rent threshold. We have had $700 in increases in the last 4 years thanks to MCI, many not needed and all at over inflated prices

Ok, get rid of all rent stabilized apartments. What happens to anyone who has built a new rental building in the last 10 years? Just try to rent out that condo you shouldn't have bought. A huge addition of "market" rate one bedroom rentals and you wouldn't have a chance in hell of selling your place, PAS. Just think what it would do to the rent/buy analysis. Landlords can't even rent out the market-rate stock they have right now.

As West81st says, you wouldn't have put the system in if you had the knowledge you have today, but changing it isn't exactly easy either.

"Should he be thrown out like Carly Simon? And how does his rent raise rents for others in his building - this man has been in there for nearly 40 years and the newcomers barely stay 2 and vacancies in the building are relatively high. How does his situation raise rent for others?"

There should probably me some means testing to throw out the Carly Simons of the world and those other middle and high earning people who can pay their way.

For the 92 year old guy, his $1200 a year barely makes a dent in any of the costs associated with the building. So, others have to pick up those costs, it is simple. I am not saying to throw him out. I said means testing. There has to be some way to unwind this system so it is fairer for all.

I was a super in Brooklyn for two days before I woke up to the insanity of the situation. This crazy woman owned two rent controlled buildings. They were in shoddy condition. She never fixed anything correctly, just 30 years of bad repairs. There was some rent stabilized guy who paid something like $50 a month. He had one 10 amp circuit and she would not do anything for him, hoping he would die, I suppose.

"Well, my building isn't owned by Related."

Doesn't matter. Facts are facts. It's a voluntary, time-limited program that grants property tax benefits in exchange.

ranter, maybe newcomers barely stay 2 years because the building feels the need to jack up the market rate rents in order to offset the parasites like the 92-year-old man. It seems that the most ardent advocates of rent stabilization are basically the people who have "lucked" into the system via incredibly good odds or hitting the gene lottery. The supporters claim that rent stabilization is needed in order to preserve the middle class in the city, yet these apartments are pretty much never available or are in decrepit condition. Well how about this idea: if you want to make the system truly fair, why not create more liquidity in the market for rent stabilized apartments? In exchange for smaller turnover rent hikes, rent stabilized leases should be finite so that other "middle class" people can have the opportunity to live in a rent stabilized situation. If there is more liquidity in the market for rent stabilized units, it will compete more with market rate units, thereby driving down the market rate rents, as well as providing a more equitable system for everybody. This notion of rent stabilization as a life-long entitlement is absurd and has no place in modern society.

Oh, another one of my little rent stabilized stories from Brooklyn. There was a couple who owned a small building and had hoped that it would provide enough rental income for their retirement. Of course, it was rent controlled. Well, they got squeezed by heating oil costs one winter and had to dip into their pensions in order to try to keep the heat on. They were struggling. Well, the tenants staged a rent-strike due to not getting enough heat. At this point, the city can step in, take the building, look at the rents and raise them in order to cover operating expenses. The owner cannot. This is a system designed to destroy owners.

Rent stabilization makes rents higher for the rest of us. Find me a credible economist who says otherwise. Almost to a person, economists evaluating the impact of rent control laws over the last decades uniformly agree (something economists rarely do) that the laws create gross market inefficiencies that benefit few to the detriment of many.

Karen..how many people are there with kids who have to pay market rates, and pay for college? What makes you special to deserve a rent controlled situation? I am sorry you have a handicap, but most do not (including the rent controllers who live in my building). I pay market rate for a 1 bed. Several people on my floor and rent controllers, and the landlord will not keep the building in good repair because of them. I will also say that not one rent controlled tenant in my building has a full time job...not one! I call it "rent control lifestyle." Let's be honest..it is essentially welfare, for those who can receive it on a technicality.

kylewest is right. There are 1 million rent stabilized apartments in New York. If they came on the market, rents would eventually settle lower for everybody. The value of my owned apartment would also drop. But, this will most likely never happn, so we are stuck.

Here is an interesting article on Boston. Of course, our market dwarfs Boston's market...

http://query.nytimes.com/gst/fullpage.html?res=9C04E3D61438F936A25755C0A9659C8B63&sec=&spon=&pagewanted=all

Lots of argument from both sides on what happened in Boston...

Kylewest: Of course you are right. No sensible person would disagree.

Now, propose a sensible reform package that has a chance of passing the Legislature. That's a little harder than quoting the Econ 101 textbook, isn't it?

aboutready
16 minutes ago
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Ok, get rid of all rent stabilized apartments. What happens to anyone who has built a new rental building in the last 10 years? Just try to rent out that condo you shouldn't have bought. A huge addition of "market" rate one bedroom rentals and you wouldn't have a chance in hell of selling your place, PAS. Just think what it would do to the rent/buy analysis. Landlords can't even rent out the market-rate stock they have right now.

That's exactly right. The "market rates" in the 92 year old man's building aren't being filled. There's now high vacancy after about a decade of high turnover of the young people who lived there. Meanwhile, the 92 year old man just got a 7.5% increase this year, and has paid faithfully every month for the past 39 years in the building. I guess 39 years ago he could have bought. Then I'm sure we'd have some angry people here complaining that he bought in 1970 and had decades of run-ups and now he's delusional because his apartment is worth a ton and the angry market rate renters think he deserves less. Just typical angry people that's all that this argument is about.

And to kylewest who said "Rent stabilization makes rents higher for the rest of us." Untrue. Again, go to this building and point out to me how this man's "low" rent causes higher rents for others when those other apartments are vacant.

stevejhx
13 minutes ago
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"Well, my building isn't owned by Related."
Doesn't matter. Facts are facts. It's a voluntary, time-limited program that grants property tax benefits in exchange.

Facts are facts. Your "fact" was that since 1972 there have been no buildings built that are subject to rent stabilization. I live in one. It was built in 2007. My base rent began at the market rate and future rent increases are subject to NYS Rent Stabilization Code. Just say you were wrong. Just do it, it might be cathartic.

407: For the 92 year old guy, his $1200 a year barely makes a dent in any of the costs associated with the building. So, others have to pick up those costs, it is simple.

Well, yes, his $1200 does barely make a dent in the costs associated with the 100 unit building. Interesting math.
Yes, others have to pick up costs in the building. The owner does. No one else does. No other tenant pays for this 92 year old man's "subsidy," and in fact, many units are unrented in this building.

Siggy98
I will also say that not one rent controlled tenant in my building has a full time job...not one! I call it "rent control lifestyle."

You want that 92 year old man to get a full time job?

> Stabilization does not delay maintence, if anything it encourages it.

Incorrect.

> The MCI's are passed like they are going out of style whether they are needed or not to get the
> apartments over the rent threshold. We have had $700 in increases in the last 4 years thanks to MCI,
> many not needed and all at over inflated prices

Yes, that is DESTABILIZATION causing renovation. If not for the change in the law, that wouldn't be happening. And, of course, they want to make that harder.

You have it completely backward!

Stablization kills buildings.

407PAS
Oh, another one of my little rent stabilized stories from Brooklyn. There was a couple who owned a small building and had hoped that it would provide enough rental income for their retirement. Of course, it was rent controlled. Well, they got squeezed by heating oil costs one winter and had to dip into their pensions in order to try to keep the heat on. They were struggling. Well, the tenants staged a rent-strike due to not getting enough heat. At this point, the city can step in, take the building, look at the rents and raise them in order to cover operating expenses. The owner cannot. This is a system designed to destroy owners.

This seems more like a story about irresponsible investing than anything else.

ranter,
Huh? Yes, I said my property value would drop if those rent stabilized places came on the market. The price would have to drop dramatically and I would take a bath. I agree. Look at that, I am advocating something that would benefit a lot of people but would be to my detriment.

As for the old man, yes, his low rent raises the cost share of others. Those vacancies also raise the cost basis for other people. There is only one rule. The costs must be paid. If the pool shrinks, people have to pay a larger share. It's straightforward. Why don't you see that?

and my favorite:
hejiranyc
13 minutes ago
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ranter, maybe newcomers barely stay 2 years because the building feels the need to jack up the market rate rents in order to offset the parasites like the 92-year-old man.

So, the vacancies can be explained how? A building would rather rent an occupied apartment at a "discount" than keep it unrented and make ZERO off of it. Same thing goes for airline seats. An airline seat is like a rental month. When the plane takes off, if unfilled, the asset has perished, just as if them month goes by unrented, that asset has perished too. Are you angry that the guy sitting next to you on the plane paid less?

What is a sensible plan Albany would pass or the City Council would push? There isn't one. It's part of NY political disfunction.

A reasonable plan? Rent stabilization ends across the board in X period of time (2 years?). The only exception is for people over 62 who have lived in the units for over 2 years as their primary residences. They have 10 years until the unit is released. Add people with handicaps if you like. That gives all a chance to reasonably prepare to cease getting government mandated private sector welfare.

The Boston model shows why the units should not be gradually released. To reap the full economic benefit, a mass release is necessary where the units hit the market all at once to the fullest extent possible. Even were it a trickle in proposal that sapped the public of the full economic benefits, de-regulation should occur because the laws amount to a government taking which was warranted only because of a supposed "emergency" 60 years ago. Today it is offensively undemocratic and a form of socialism imposed by the government on the private sector. Markets should be tampered with only to the extent necessary and no more. These laws are destructive meddling.

Bleck, i can't even get through this entire thread. However, Julia - "if people make $240k why aren't they buying?"...Do the math. Not everyone is single and looking for a one bedroom.

I also think this move is actually intended to stabilize prices, both rental and sales. The market simply can't absorb 4-6% of the rent stabilized units exiting the program yearly. Many landlords would get killed if the rental rates took a huge dive, which could happen with a relatively minor increase in supply. I don't think this is intended as such a gift to the little people of NYC, although the results may seem as such.

And to continue with this greatest of assholes on this discussion
hejiranyc: ... to offset the parasites like the 92-year-old man. It seems that the most ardent advocates of rent stabilization are basically the people who have "lucked" into the system via incredibly good odds or hitting the gene lottery.

Did you want the 92 year old man to die earlier? Maybe he should have been killed toward the end of his service in World War II and then he would have never had to have a government subsidised Quonset Hut in the Bronx or have to receive medical care from the VA Hospital, let alone this sinful lifestyle he lives in a building as a rent controlled tenant.

"Are you angry that the guy sitting next to you on the plane paid less?"

No, I'm angry if I never get a cheap fare while the guy next to me has a guaranteed cheap seat forever.

ranter, your namecalling pretty much says it all.

I never said anything about wanting the "92 year old man to die earlier." Rather, I would have liked to have seen him buy his own place earlier and get out of this "welfare" rent stabilization program by pulling his own weight, especially since he was around when Manhattan real estate was dirt cheap. Just because he is a veteran does not mean he is automatically incapable of making a living that sufficiently gets him off of the public dole.

And regarding the apartments that turn over constantly, the fact of the matter is that landlords need to seize every opportunity to jack up market rents in order to offset the stabbers. And yes, they would rather vacate an apartment on the hope that they will find someone willing to pay the higher asking price. Happens all the time, and don't pretend that it doesn't.

hejiranyc
2 minutes ago
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"ranter, your namecalling pretty much says it all.
I never said anything about wanting the "92 year old man to die earlier.""

My name calling?
Let me go back to your earlier post: "the building feels the need to jack up the market rate rents in order to offset the parasites like the 92-year-old man."

407PAS
23 minutes ago
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"As for the old man, yes, his low rent raises the cost share of others. Those vacancies also raise the cost basis for other people. There is only one rule. The costs must be paid. If the pool shrinks, people have to pay a larger share. It's straightforward. Why don't you see that?"

Because in markets, rents are correlated to incomes. The other aren't paying more if they can't pay more because their income is what it is.
The owner will pay more. But then again, the owner, let us take him back to 1970 when the 92 year old man moved in, I hardly think the owner is losing his shirt today.

"This seems more like a story about irresponsible investing than anything else."

You dismiss my story about the older couple renting out a few apartments by saying it is about irresponsible investing, without addressing the system that destroys any chance they have of realizing a reasonable profit for the risk they are assuming. Don't forget that the owners of the building are providing housing for people and deserve the chance to make a profit in order to cover their costs and earn some money to live on.

407PAS
13 minutes ago
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"Are you angry that the guy sitting next to you on the plane paid less?"

No, I'm angry if I never get a cheap fare while the guy next to me has a guaranteed cheap seat forever.

So are you angry at the guy who bought in 1970 and whose building is worth more today? People lock things in. Whether that be the owner in 1970 or the renter in 1970 who effectively purchased a long-term lease and continues to fulfill his obligations on the one hand and receive the benefits on the other hand.

one more time back to this complete asshole:
hejiranyc
... the fact of the matter is that landlords need to seize every opportunity to jack up market rents in order to offset the stabbers. And yes, they would rather vacate an apartment on the hope that they will find someone willing to pay the higher asking price. Happens all the time, and don't pretend that it doesn't.

Perhaps you missed this weekend's New York Times article on where rents are going.

Happens all the time, then how do you explain now?

407PAS
This seems more like a story about irresponsible investing than anything else."
You dismiss my story about the older couple renting out a few apartments by saying it is about irresponsible investing, without addressing the system that destroys any chance they have of realizing a reasonable profit for the risk they are assuming. Don't forget that the owners of the building are providing housing for people and deserve the chance to make a profit in order to cover their costs and earn some money to live on.

The older couple purchased the building knowing that units were rent controlled - they KNEW that their revenues would have a fixed component to it and that the costs would have a variable component to it and didn't plan for that contingency. That is irresponsible.

"Don't forget that the owners of the building are providing housing for people and deserve the chance to make a profit in order to cover their costs and earn some money to live on."
The owners overpaid, plain and simple. If they had purchased at a price that took into account the fixed nature of the revenue and the variable nature of the costs, they would have logically paid less. The loser here is the owner, but the owner isn't losing out to the tenants, the owner is losing out to the prior owner to whom they paid too much. The prior owner made out like a bandit.

"So are you angry at the guy who bought in 1970 and whose building is worth more today? People lock things in. Whether that be the owner in 1970 or the renter in 1970 who effectively purchased a long-term lease and continues to fulfill his obligations on the one hand and receive the benefits on the other hand."

The person who buys assumes risk in the building and in the marketplace. The value of his asset will rise and fall. There is no law that protects him. He is subject to the whim of the market. Look at the title of this thread, "Death Knell for Sellers". It is nice to know that you rent stabilized people wish owners such ill.

It is unfair for rent stabilized people to be locked into absurdly low prices, by law, while passing off the risks to the landlord, who has to cover the shortfall from the rents by charging other people more.

I'm off for now. I may be ranting, but too many here are just angry. I don't know your situations, I don't know your personalities other than this small window into your perspectives. But as any man who has argued with his wife know (sorry this is sexist), you can't infuse logic into an argument fueled by emotion.

"The costs must be paid... people have to pay a larger share... The owner will pay more... I hardly think the owner is losing his shirt today."

ranter, your ignorance is breathtaking... like pissing in the wind. You basically just admitted that rent stabbers result in everyone else having to pay more, which is the whole point that you've been trying to refute. Did you remember to take your schizo meds this morning?

"The owners overpaid, plain and simple. If they had purchased at a price that took into account the fixed nature of the revenue and the variable nature of the costs, they would have logically paid less. The loser here is the owner, but the owner isn't losing out to the tenants, the owner is losing out to the prior owner to whom they paid too much. The prior owner made out like a bandit."

Costs rise and those costs must be paid. Don't you get it? If rents cannot follow, owners will be crushed. So, if we follow your logic, nobody should buy that building because the rents cannot cover the costs. Therefore, the building should be burned to the ground. Happy now? It is all logical. Of wait, that's what happened to housing stock in New York, lots of it was burned to the ground.

ranter,
I'm passionate but not so angry as you may perceive me to be. It is hard to convey tone in these posts. I have not called anybody names, I have laid out my reasoning against the rent stabilization laws. I hope somebody enjoyed my stories. ;-)

Never argue with your wife, keep the following in mind. As Mark Twain said:

"If husbands could realize what large returns of profit may be gotten out of a wife by a small word of praise paid over the counter when the market is just right, they would bring matters around the way they wish them much oftener than they usually do. Arguments are unsafe with wives, because they examine them; but they do not examine compliments. One can pass upon a wife a compliment that is three-fourths base metal; she will not even bite it to see if it is good; all she notices is the size of it, not the quality.
- "Hellfire Hotchkiss," reprinted in Satires and Burlesques"

"If they had purchased at a price that took into account the fixed nature of the revenue and the variable nature of the costs, they would have logically paid less."

The trouble is that none of us know the future costs. Matching fixed income against variable costs is a recipe for disaster. Every year they hold those rent stabilized tenants meetings where the landlords say that their heating costs have risen and the tenants scream No Rent Hike. It is theater that I would rather skip.

ranter, you are the emotional one using a straw man to bolster your case.

You said this 92 yr old man was in a rent controlled apt. There are about 50,000 RC apts left in NYC out of 3 million units (1 million owner occupied, 1 million free market rental and 1 million RS - how's that for facts). Aboutready was talking about the affect of 1 million rent stablized apartments being destablized. Read it again. She never mentioned rent control. So your 92 yr old friend would be safe.

In fact, if ppl here knew what rent controlled means and how the typical rent controlled tenant got to live there (almost all will be similar to your 92 yr old friend) then I'm sure they would say let the rent controlled tenants stay regulated but deal with the RS issue.

I doubt if this will go through with these exact terms, but can you just imagine what's going through the minds of the Speyers? It might make it financially easier to walk away from their ST/PCV investment, but oh what a blow to the ego.

Just noticed: effect - not affect.

aboutready, there were some interesting (for once) posts on curbed about the Speyers. They only have 50Million of equity so don't stand to lose much.

Ego? There have been many big RE families that have gone through booms and busts - losing it all - and some come back with freshly burnished reputations when the boom times come back.

The speyers sold most of their RE at the peak of the market for a total of $10billion and if the banks restructure the financing - which is likely due to how little skin the Speyers have in the game but how much the other investors and banks do - then they may come out of this smelling of roses - at least in commercial RE circles, but not in the eyes of tenants.

divvie, i agree in theory entirely. but, they wanted those 80 acres for posterity, for a vision, not for now. i'm not talking ego in terms of the cre world (hell, if Trump can continue to show his face), i'm talking the ego that comes from wanting to achieve something out of the ordinary, not just make or lose money. everyone knows they were in this for more than owning a huge apartment complex.

the tenants would hate whoever owned the complex. although I must say that TS has been doing their best to outperform MetLife in eliciting hatred.

Haha - nice one on Trump.

I agree Rob Speyer was trying to make his mark and I think he may yet do it - based on reading the NY mag article and knowing nothing about him before 2 days ago.

Rent control laws are a key driver of high prices in NYC. The first reform is that all rent control/stabilization benefits should be means tested against the renters income to determine if the benefit is truly going to someone in need. However even that does not go far enough. But the other issue is the overly restrictive land use laws in NYC. They also impact the ability of the "free" market to operate efficiently. Without meaningful reform of both it is hard to see a way to repair the damage to the housing market the government has already caused.

absolutely. I saw a study about 6 months back noting that land use restrictions adding something like 25-50% to the cost of housing in NYC...

Could you help me a little bit with what you are saying in reference to land use restrictions? Are you saying we all pay a lot more in the city because we prohibit the building of a nice new oil refinery on the Upper West Side?

http://harvardmagazine.com/2004/07/mugged-on-park-avenue.html

divvie, great article. it takes forever to get anything done in NYC, private or public. you can see it in the recent building boom, some developers were lucky they couldn't get through the morass because the whole damned project wound up being postponed (Solow's east river project seems to be a good example). Others weren't so lucky and got going, albeit not necessarily in time to sell.

While I think the Dems proposals in Albany are absurd, is it not also ridiculous to argue the merits of RC/RS when market rate prices for apartments are falling dramatically? Also, doesn't the creation of an artificial pricing floor on market rate apartments actually create an incentive to build in NYC -- i.e. if the market rate for a 1 bedroom in NYC was 1500 instead of 2500, why would any developer build a new rental building?

Finally, let's not forget that one reason for the overall low crime rate in NYC is that poverty is more dispersed than in other cities -- so that when an area gentrifies, the lower income folks are not pushed out and into presumably more concentrated areas of poverty (as in my hometown of Chicago).

Not a fan of RC/RS, but I think the larger issue is the cost of new construction in NYC rather than the continuing presence of RC/RS -- if new construction were easier/cheaper, the disparity would be reduced w/o having to cause a political war with those who are RC/RS.

there are so many arguments both ways. but...while I don't think that eliminating rc/rs would be viable now, for many reasons, mostly economic, the argument against rc/rs vis a vis building that works the best is that it artificially decreases the availability of land. not that builders would be lining up today to build on all the tenement corners, but in an upswing they would and the lack of land availability (creating very high prices) was one of the many factors that led developers to only produce "luxury" apartments.

NYC would be a nicer place without all the bitter rent stabbers who mooch off others. Forget about Wall Street bonuses. They are nothing compared to the pilfering of landlord value and work by crabby rent stabbers.

The real problem is that the benefits of rent control do not go to those in need. At least the system does not in any way attempt to determine the if the renter meets any justifiable economic criteria. So trying to connect the dot between the economic status of a renter and rent control is patently false. It is an unjust distribution of an economic benefit to people and not a single control in the system to ensure that the benefit goes to someone in need. It drives up the rent of the free market in turn and also reduces the overall quality of housing in NYC.

There are really no compelling economic justifications to keep rent control. Only a bunch of emotional appeals about the suffering it would cause if it was removed. When rent controls were abolished in Boston by a statewide ballot, only 7% of residents applied for hardship protections. That is because the vast majority of the rent control renters could afford market rents. This is very bad public policy.

"if people make $240k why aren't they buying?"

There's a lot of reasons to not buy right now, but lets say the market was still going up up up. How much of an apartment do you think a combined 240k salary buys you in Manhattan? At todays prices, it buys you a really nice studio or an OK 1BR or a really crappy 2BR conv. Perhaps you have a more thrifty lifestyle, but certainly for my family and my coworkers this is the case. For many couples this is an option that isn't viable for very many years.

what do you mean by "rent stabbers?"

The benefits of RC/RS go to people who have lived in NYC for a long time while hurting those who are "recent" migrants. I would guess that the recent migrants to NYC probably don't vote in the same numbers as long time residents. In this way, you can see RS/RC as a "tax" of new residents or a "subsidy" to existing residents. So I don't think it's about "emotion" -- it's about an entitlement that positively affects people who vote and negatively affects people who don't. So I don't think RC/RS is about helping people in economic need, it's about helping people who continue to reelect Shelly Silver.

If it were up to me, there would be no RC/RS, anyone could scalp tickets to the Yankees, drugs would be legal, and I would be able to gamble from my computer. However, there are political reasons that none of things are the way that Milton Friedman would argue that they should be. Perhaps if we better understand the political reasons we can find a way to create a more rational RC/RS policy.

Good question nyc10028.
Let me take this one: The term rent stabber is used by:
Gay white bottom men
and refers to one of the following:
1 - Gay minority top men who live in rent stabilized apartments and pay less rent than the white bottoms. Those gay minority tops, while a fantasy of the gay white bottom men, should not be in the same neighborhood as the whites who pay more and feel more superior racially.
2 - Older gay white people with nice "pads" that the younger people are angry that can't "luck" into.

Now don't get me wrong, this isn't to say that others can't have an argument against stabilization, but the specific term "rent stabber" especially when used on streeteasy or curbed.com is specifically associated with one of the two above.

What is that last post about? Just ridiculous. This has nothing to do with sexual orientation. I would take rent stabber to mean a tenant who stabs the landlord and his fellow tenants (who pay market rent) in the back by not paying his fair share of the costs.

I'm just going to make one post today and then I'm off.
407PAS
about 1 hour ago
ignore this person
report abuse What is that last post about? Just ridiculous. This has nothing to do with sexual orientation. I would take rent stabber to mean a tenant who stabs the landlord and his fellow tenants (who pay market rent) in the back by not paying his fair share of the costs.

1 - Landlords have been in the system since when, 60s? 70s? Their costs are plenty being covered by rent control or rent stabilization. They may not reflect market and a market return on the appreciated value of the apartment/building 40 or 50 years later, but the owner isn't LOSING money on the unit on a cash flow basis.
2 - Rent stabilized tenants are not "stabbing" his fellow tenants in the back if the tenants are paying market rent. That is the definition of market rent. Market rent wouldn't change, rents are generally driven by income in a marketplace. So if the apartment were occupied by a market rent tenant, the other tenants would pay no less, but certainly the landlord would make more.
3 - The idea that people who are participating in a lawful program are doing anything wrong is absurd. You may not like it, but to equate it to illegalities or violence is shameful.
4 - Someone accused me of using the 92 year old man as a "straw man." It isn't a straw man, it is a real person who has lived in his place since 1970. The real "straw men" are the often cited abuse examples like Carly Simon - there aren't too many Carly Simon's out there. At minimum, I appreciate the people who at least recognize that the elderly (and I'll up you from 62 to 75), disabled, and low income should be put into a separate category than others and allowed to serve out their tenancy, although likely free of the rights of succession.

92 yr ol man was rent controlled - remember 50k units so using him as an example misses the point about rent stabilization (1 million unus). We all agree he should be protected so let's keep rent control out of this.

Most ppl here are talking about rent stabilization

"1 - Landlords have been in the system since when, 60s? 70s? Their costs are plenty being covered by rent control or rent stabilization. They may not reflect market and a market return on the appreciated value of the apartment/building 40 or 50 years later, but the owner isn't LOSING money on the unit on a cash flow basis."

Nonsense, taxes on those buildings continue to go up, boilers, elevators, windows, and roofs have to be repaired or replaced. Your statement that their "costs are plenty being covered" is not based on any actual facts, just on what you feel. You don't know the cost basis of each building.

"2 - Rent stabilized tenants are not "stabbing" his fellow tenants in the back if the tenants are paying market rent. That is the definition of market rent. Market rent wouldn't change, rents are generally driven by income in a marketplace. So if the apartment were occupied by a market rent tenant, the other tenants would pay no less, but certainly the landlord would make more."

RS apartments do not have rents that keep pace with the costs in the building. Those costs have to be paid by somebody else, in this case, by the non-RS tenants. This is why buying into a condo conversion with some percentage of RS-tenants is so tricky.It is very hard to figure out how much you are going to have to pony up as an owners, when the costs rise and your RS-neighbors do not have to contribute to cover those costs.

"3 - The idea that people who are participating in a lawful program are doing anything wrong is absurd. You may not like it, but to equate it to illegalities or violence is shameful."

The term "stab in the back" means to cheat someone or double cross someone, it does not necessarily equate to a violent act. This lawful program hurts a lot of people and should be changed. I never claimed the program was unlawful, although it does seem to lend itself to a lot of illegalities, like renting out these rent stabilized apartments illegally.

Like other have said, we should stick to discussing how the 1 million rent stabilized apartments can be brought back on the market, and not the small number of rent-controlled places that still exist.

"2 - Rent stabilized tenants are not "stabbing" his fellow tenants in the back if the tenants are paying market rent. That is the definition of market rent. Market rent wouldn't change, rents are generally driven by income in a marketplace. So if the apartment were occupied by a market rent tenant, the other tenants would pay no less, but certainly the landlord would make more. "

Time for a basic economics clas.

Pricing is determined by income and SUPPLY. If you think more supply wouldn't decrease the market rate, you need to go back to school.

"Time for a basic economics clas."

ok, lets see. 1 in 4 new yorkers was spending more than 50% of their income on housing. you advocate for not regulating housing costs downwards, incomes (of those that you don't think of as "super achievers" but that are needed as much as self-serving wall streeters) should have to rise to pay for that.

labor costs is a big part of the cost of doing business, housing costs are a big part of labor costs. so ... if you de regulate rents, expect wages to rise and business to relocate to more affordable areas (which should have happened to a greater degree already).

now, you are going to say "commute!". ok, but not all the needed low paid employees that nyc NEEDS are willing to do that, so they will go to greener pastures. that's not good for NYC.