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May 19, 2009

Rent Board Chief on Shifting Onus from Landlords

The Observer ran an interesting interview yesterday with the head of the Rent Guidelines Board, Marvin Markus, that lays out some of the common-sense problems with rent control and stabilization. If we as a society deem it worthwhile to subsidize certain people (and clearly there are lots of reasons to do so), then the cost should be borne by society as a whole not individual landlords, argues Markus. "There are poor tenants, they should be protected, but the individual owner is not the one that should protect them. The population at large clearly should be the ones footing the bill," he says. And how would be do that? "One suggestion is a rent tax/surcharge of some limited amount, on all rents in the city … and all co-op and condo charges in the city. … It’s very important for the city of New York that there be a mixed income base—from an economic standpoint; from a social standpoint—and we want to make sure, I want to make sure, that that continues." While landlords make easy political targets, it's hard to make any rational arguments in favor of the current system: Lifetime entitlements makes no sense at all; nor does a system that dis-incentivizes landlords from maintaining the housing stock.
Rent Board Chief Markus Pleads for 'Rationality' [NY Observer]
Photo from the Tenement Museum

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Comments

"One suggestion is a rent tax/surcharge of some limited amount, on all rents in the city … and all co-op and condo charges in the city"

Jesus H Christ...all this is is a new way to raise taxes here and no discussion as to how this will ever get back to the landlord. You think this will be managed effectively to get landlords more money????

The link to the Observer doesn't work.

Posted by: daveinbedstuy at May 19, 2009 9:06 AM

"a rent tax/surcharge"

Oh hell no! Another bailout on the backs of renters/savers? I didn't tell you to buy at the top or go HELOCO.

***Bid half off peak comps***

Posted by: Brownstones Half Off at May 19, 2009 9:12 AM

Hey DIBS:

I actually agree with the premise... if society feels that something, whether food, shelter, or health care should be subsidized for our needier citizens, it should address the issue honestly, not force the private sector (in this case landlords)to hand out the subsidies.

However to force some other limited sector of society, in this case property owners, to issue the subsidy, we're just expanding the source of the subsidy, not dealing with it.

All rent stabilization should be abolished and the needy should have the right to a certain level of shelter, and that should be paid out of general tax revenues, in the same way food stamps and certain other subsidies are.

Posted by: denton at May 19, 2009 9:14 AM

Any landlord that purchased their building in the last 30 years knew what the deal was with regard to rent stabilization / control. I don't see a good reason why they should be subsidized by everyone else now. Mr Markus' statements sound like a ballsy demand for corporate welfare for landlords.

Posted by: etson at May 19, 2009 9:15 AM

I'm not sure how this helps landlords. Rent Control and Stabilization would still be there, right?

End rent stabilization, that is the only way to do it.

People seem to forget that long ago, before stabilization, the city was where everyone lived and only the wealthy moved out. Times have reversed, ironically, in the face of all this "we need to make it affordable" nonsense.

Everyone always talks about "level playing field" out of one side of their mouths, but social programs and subsidization out of the other. In my opinion, if you want a true level playing field and equally opportunity for all renters, landlords, apt owners, etc, make it all lever. Don't tax co-ops to pay for a subsidization of renters designed to help landlords... that is insanity.

Posted by: christopher at May 19, 2009 9:18 AM

denton...I agree with the premise wholeheartedly as well but there was no discussion of the mechanics of getting the surcharge back to the landlord. Also, it doesn't make much sense to surchareg rents and then give it back. That's just "make work."

It's just not spelled out very well and the devil is always in the details. But, the current situation of landlords subsidizing rents is ridiculous. Yes, etson is also right...if you bought a rent stabilized building you should have been compensated for that with a lower price.

Posted by: daveinbedstuy at May 19, 2009 9:19 AM

Marvin Markus makes absolute sense. I could not have said it any better. Every point he made was right on target.

As for etson's reply - Just because the landlords "knew what the deal was" does not make the deal fair. We definitly need change. The sooner the better.

Posted by: troll at May 19, 2009 9:20 AM

speaking about rent control in New York is like speaking about religion in Teheran. It is a sensitive subject. Years of orthodoxy makes "common sense" a very dangerous subject to try to broach.
One of the problems with his premise is that there are no income requirements for receiving the advantages of rent controls. Society would not be helping the needy by subsidizing it. Some on rent control are needy and others are real estate attorneys with villas in the Hamptons and chalets in Crested Butte. It is hard to bring rationality to a completely irrational set of laws. You may as well lecture about the safety of eating pork and drinking bourbon in Rijadh.

Posted by: sam at May 19, 2009 9:21 AM

Maybe the intent of rent stabilization is actually to stabilize rents and not necessarily to subsidize poor people. In a stabilized world, landlords are guaranteed some sort of return but don't get to gouge tenants in tight housing markets. The downside is that developers don't get the extra incentive to increase supply afforded by high profits when the market is at the top. So instead, they could get tax breaks to increase supply. In this manner, the stabilization of rents is in fact subsidized by the larger public in the form of developer tax incentives.

Just thought I'd offer a different way of looking at this issue.

Posted by: Back40 at May 19, 2009 9:23 AM

why is it they (free market junkies) complain about this but never a word about price control on taxi fares.

Posted by: Petebklyn at May 19, 2009 9:24 AM

I'm not sure how this would help landlords at all to be honest.

If my budget for rent is $3000/mo, but suddenly there is a new 5% tax on rent, well, guess what my new monthly budget for rent is?

It's about $2850.

The rental tax just makes me lower the amount of rent I'm willing to pay.

Posted by: northsloperenter at May 19, 2009 9:30 AM

Back40 talks sense @ 9:23.

Posted by: southbrooklyn at May 19, 2009 9:31 AM

Just to be clear, I don't agree with rent stabilization in general, but think it is a difficult system to dismantle and so has to be done gradually.
It's just that the proposal hits market rate renters even harder. Stabilized apartments stay off the market thus keeping supply low, and then market rate renters would have to pay the surcharge as well.
Finally, I am very skeptical that most stabilized landlords simply don't have the money to maintain their buildings. If so, they should be forced to sell. I simply don't see how the current system is 'unfair' to them, as troll claims, given that most knew the rules going in.

Posted by: etson at May 19, 2009 9:32 AM

back40- that was the intent but of course things change. I think laws should be stricter regarding RS/RC but I agree with Etson on this and sam. Landlords do get breaks and abatements, as do developers. Many of them took advantage of tax abatements to build affordable housing and never did. Its a business, and like etson says, they knew the deal. Asking the general public to give them a subsidy is like patting them on the head for running a business badly.

People should also stop confusing rent stabilization and rent control. They are very different and you will ntot find a 6 room (or more) apartment on the UWS for 300$ if it's rent stabilized. You might if it's rent controlled and you lived there for 40 years. But rent stabilization regulates the amount of increase and as such, many rs apartments, while lower than market rate, are not all that miuch lower. There is no lifetime entitlement with RS either.

There's plenty of people who abuse the privilege of rent control and that should be stopped. No question. But to add another tax onto my rent to subsidize landlords (I pay mine. Why should I pay someone elses?) - no thanks. Life is tough enough.

Posted by: bxgrl at May 19, 2009 9:41 AM

Another question is- since renters pay to landlords, how is this subsidy supposed to be collected? Is my landlord going to be responsible now for taking care of this? Am I going to pay diretly into an agency?

This is such a stupid idea- they'll spend more money on setting up and running the office with staff and equipment, than will ever go to landlords.

Posted by: bxgrl at May 19, 2009 9:44 AM

etson, could not agree with you more. I also am not in favor of rent stabilization, but the people who bought these buildings knew the rules going in (and also enjoyed the discounted price on the building). Its all about cash flow - the reason the building these landlords bought was cheaper than comparable free market buildings when they made the purchase is because the expected future cash flows are lower due to rent stabilization. Now, the landlords want the cheaper initial capital outlay but don't want the reduced rent income that goes along with rent stabilization. Sounds like wanting your cake and eating it to. It is the owners of the buildings that should incur the cost of subsidizing the tenants since they benefited from lower purchase prices at the outset.

Posted by: bkhabitant at May 19, 2009 9:48 AM

The solution to the problem is easy:
1) 100% vacancy decontrol.
2) If you make over $150,000 a year you are decontrolled, irrespective of the current rent.
3) If you have liquid assets over $250,000 (or some number) you are decontrolled.
4) If you own any other property you are decontrolled.
5) You can not pass an apartment to a relative when you die.

In 10 to 20 years we will have a 95% market rate rental market.

Posted by: Suburbandude at May 19, 2009 9:52 AM

rent control doesn't make sense at all, if they are poor they should be given a check to live where ever they want to.

if they aren't poor at all and living in rent control, they should pay market rent.

Posted by: armchairwarrior at May 19, 2009 10:00 AM

suburban dude, you don't understand, you are talking heresy. people can be burned at the stake for making suggestions like the ones in your post. Rent regulations in NYC are the bedrock on which political careers are built. A politician running for office may as well come out against bicycles or organic produce or school integration.

Posted by: sam at May 19, 2009 10:01 AM

"In 10 to 20 years we will have a 95% market rate rental market."

And no middle class....

Rent Control is a subsidy for Landlords, not renters. The rental market would crash if they removed Rent Control. I love how they way the newly transplanted come up with solutions.

BTW If you do away with Rent Control then let's get rid of Section 8 that's a "subsidy" for Landlords not tenants.

Ask yourselves one question: What is going to happen to all those Condos being built? No one addresses that question and when they are completed, they will complete for renters further depressing the Rental Market. I'm willing to bet the the talk of removing Rent Control will go away. You have 5 months left enjoy them...

The What

Someday this war is gonna end...

The What

Someday this war is gonna end,,,,

Posted by: Return of The What at May 19, 2009 10:03 AM

SuburbanDude has hit the nail right on the head. This is the sane way to undo a byzantine system that no other large city in the US has. It is also a humane way to prevent large-scale dislocation.

Denton: I agree with your point that a segment of the private market should not be forced to subsidize the rents of lower-income tenants, it is a public/government responsibility. However, don't we already have this in the form of the Earned Income Credit, Section 8 vouchers, public housing and affordable housing subsidies? Where do we draw a line?

PeteBrooklyn. Your point is way off base. Rent control is government price control in a private market. A taxi medalion is a government-provided right to run a business on publicly-owned property (cruising the street for fares). Hence, in this latter case, government has every right to set the rates.

Posted by: benson at May 19, 2009 10:03 AM

bkhabitant - the problem is you have lots of undeserving people who are paying below market rents. Because the building is devalued, its property assessment is lowered, and the property taxes are reduced. Therefore, everybody else is paying for this tenant's low rent. Plus, because rent stabilized tenants never move, it keeps vacancies down and market rates artificially high. That's just two of dozens of reasons why rent stabilization has been a 75-year disaster in NYC.

Posted by: Suburbandude at May 19, 2009 10:04 AM

suburbandude- you are confusing rent stabilization and rent control.

And rent control or rent stabilization does not devalue a building. If it did, the landlords of all those incredible pre-war apartment buildings on the UWS would have abandoned them long ago.

""In 10 to 20 years we will have a 95% market rate rental market."

And no middle class...."

What is completely right.

Posted by: bxgrl at May 19, 2009 10:12 AM

I agree that there are problems with abuse. The proposed solution though is absurd. Why should I pay while the 20 richest families in NYC receive a 1time windfall? The RS buildings were bought at pennies on the dollar because of the restrictions. I suggest that the owners of these properties get the option to buy themselves out. The cheaper the current rent, the more money they would pay the city to remove the apartment from RS. Then, the city can roll qualified people under it's section 8 so they can stay. People who do not qualify can stay at market rent. The money paid to decontrol should be the equivalent of 5 years of subsidy.

Posted by: Maly at May 19, 2009 10:13 AM

ugh. if we deregulated all the rent controlled apartments in nyc we would lost like 99 percent of our eccentrics and kooks! just let them die off. remove the part where they can give them to family members though. that sh-t is bananas.

sometimes i think rent stabalized apartments arent a bad idea. many (most) stabalized apartments are not that much difference in price from market rate.

*rob*

Posted by: PitbullNYC at May 19, 2009 10:14 AM

New York's problem is the people in the middle... the majority of folks on this board are in the "wealthy/comfortable" range... you can afford $3000+ rent or mortgage payments.

Then there is the poor. There is public housing and other programs -- no judgment on the quality of any of this, just saying it exists.

Where NYC is failing is in the middle. Folks with decently paying jobs (middle management and skilled workers), but can't actually afford to live here. This is the middle-aged person making $55k a year... housing options are very limited and this rent tax makes them even worse!!! It benefits he poor and has no real negative impact on the rich/well-heeled.

It's the donut hole. The tuition increases at CUNY and SUNY are the same thing. The poor have Pell and TAP grants that cover the increases in full. The wealthy don't even notice... it's the kids in the middle that have to find an "extra" $1200+ a year (usually in debt or working more, which takes away from their studies).

Posted by: tybur6 at May 19, 2009 10:14 AM

Suburbandude, I am not voicing support for rent stabilization. I do support a safety net for those at the bottom financially but I agree that this safety net has been abused to the point that it needs to be reformed. But Maly is exactly right - to reform the system in the way suggested is a one time windfall for the people who bought the buildings at a cheaper price because of restrictions and would then enjoy better cash flow with the restrictions removed. And that's just not right.

Posted by: bkhabitant at May 19, 2009 10:19 AM

"""In 10 to 20 years we will have a 95% market rate rental market."

And no middle class...."

This is why I can't take NYC liberals anymore, and why I should get out of this town.

Yes, we can all see what a BANG-UP job rent control has done in keeping NYC a middle-class city!!!! This system has been in place for 60 years, and what are the results? Only last week, Brownstoner ran the results of a study that showed that NYC has the SMALLEST proportion of its population belonging to the middle class.

Where is the accountability for this system?

Bxgrl, since you are a proponent for it, let me ask you some questions, going back to SuburbanDude's points:

-Do you believe there should be an income limit for someone benefitting from this system? What should that income level be?

-Do you believe that someone owning property should benefit from this system?

-Do you believe that someone who has liquid assets over -say - $100,000 should benefit from this system?

Posted by: benson at May 19, 2009 10:20 AM

benson- excuse me- did you not read what I posted? :

"There's plenty of people who abuse the privilege of rent control and that should be stopped. No question"

And since you think suburban dude os so dead on the money, why can't he distinguish between rent control and rent stabilization? There's a big differnce.

And do you believe renters should subsidize other people's landlords- because I am not living in a rent-controlled/rent stabilized apartment.

Not only that- but the blaming of rent control and rent stabilzation for the loss of the middle class is ludicrous. Just look at the pricing on new apartments or decontrolled ones. That's why the middle class is leaving- and its called "market rate."

See- this is why conservatives piss me off (as much as I love you). It's all about money and free market and the hell with people.

Posted by: bxgrl at May 19, 2009 10:31 AM

Marvin Markus is 100% correct -the problem is that RS is being used as a method of maintaining affordability - when it was designed to be a system to maintain stability (get it - thats why its so named)

The idea was that in a city of limited housing families shouldnt be displaced because of massive inflation due to the whims of the marketplace (i.e. your neighborhood becomes hot and all of sudden they raise your rent by 50%)....frankly I think it is a legitimate goal.

It makes ZERO sense that if you live in a marketrate apartment your LL can double your rent overnight but the tenant living across the street (potentially paying MORE) but under RS will have his/her rent only raised 4%.....

Markus solution is essentially vacancy decontrol and then RS of EVERYTHING - which thereby protects ALL from the whims of the marketplace (which in terms of housing may be a reasonable goal)
It is no less traumatic for a family paying $2500 (non-RS)for an apartment to be forced out then it is for someone paying $1900 (RS)

As for etson point about LL knowing the deal - this is ridiculous....if you buy a home in a non-landmark, limited height restricted district -(like most of Park Slope until 2004) and a developer wants to build a 15 story building next door to your row house - should the Govt not consider zoning changes because "you knew the deal"; should Govt workers never get a raise (or conversely never have their retirement plans adjusted) - because that was "the deal".
No one is proposing any windfall for the LL lobby (if Markus plan was followed - it wont be - market rate owners will immediatly fall under RS, which will be a huge hit for them)...but if "the deal" is not working or is being totally perverted in its result then Govt has an obligation to "change the deal".

Oh and BxGirl - under RS - a tenant (who does not make over 170K) dos have a LIFETIME interest in their apartment, an interest that is transferable upon death to any family memeber dwelling in such unit for their LIFETIME.

Posted by: fsrg at May 19, 2009 10:33 AM

rent control threads are so boring.

Posted by: sam at May 19, 2009 10:45 AM

Bxgrl;

I do not favor Markus' plan, as I stated above. Basically, I am in favor of dismantling the whole RC/RS system over time, and I believe SuburbanDude's plan is the most sane. It quickly weeds out the abusers, and then allows vacancy decontrol to do the rest, over time. As I also stated above, I believe in a social safety net, and we have such a system in the form of the Earned Income Credit, Section 8 vouchers, affordable housing subsidies and public housing. These are fine. Government regulation of the pricing in the private housing market is not. No other large city has such a system, and they get along just fine. Boston did away with tis system about 15 years ago, and no large-scale dislocation took place, despite the warnings of those with an entrenched interest in the previous system.

I do not blame rent control/stabilization for the loss of the middle class. My point is that it has done nothing for the middle class, as Tybur6 pointed out well above.

Posted by: benson at May 19, 2009 10:46 AM

Oh yes, bxgrl, there will be middle class in New York City!

My parents came to this country 17 yrs ago, a family of six bringing $1,200. Took blue collar jobs - I don't think they ever made more than 50k per year combined. Yet now they are proud owners of a coop apartment, no mortgage. How did they do it? Sweat and blood, and never eating out, and my mom never spent more than $20 on shoes... you get the idea. RC and RS suck out the money from the NYC tax base - that's the money that would go to pave the sidewalks in front of the building where my parents live or extend the hours of the local library. That's the money taken from my parents.

It's the families like them that made their building what it is now, not the leeches who smile at them in the hallways because their government protected rent is less than the maintenance for the comparable apartments.

Posted by: kensingtonka at May 19, 2009 10:49 AM

bxgrl - that reminds me. Do you know how many apartment building owners in NYC and the suburbs quit the business and sold them to coop convertors because they couldn't make a decent profit? Or torched them in the South Bronx and East New York? Had there never been rent control and rent stabilization there would be hundreds and hundreds of thousands of more rental units on the market. One-bedrooms in Manhattan would be $1,500 not $3,000.

And rent control nearly destroyed NYC in the 1970's. Lessons are never learned.

Posted by: Suburbandude at May 19, 2009 10:53 AM

fsrq- I knew that tenants residing in the apartment have the right to renew the lease but pay an increase (rc tenants don't until the 3 person succeeds and then I think it is 20%. ) But I don't think the lease renewal is as ironclad as the rent control one. And rs tenants don't have as much protection as rent controlled ones. I was an rs tenant for many years- my rent went up each time. By the time I moved out, I was paying maybe 200$ less than the market rate of other apartments in the building.

Posted by: bxgrl at May 19, 2009 10:55 AM

FSRG,
Mr Markus' plan is a tranfer of wealth from the government to the landlord (and some tenants) of a rent stabilized building, because it would guarantee them the maximum increase from all tenants, and 'true up' all tenants to a current level of rent.
There is no need to 'stabilize' current market rents - in fact if market based rents were stabilized, it would end up being a subsidy to bad developers in downturns, because hey would get a guaranteed level of rent for converting condos into rentals

As for your question "if you buy a home in a non-landmark, limited height restricted district -(like most of Park Slope until 2004) and a developer wants to build a 15 story building next door to your row house - should the Govt not consider zoning changes'
- my point was in that situation you should be aware of that possibility when buying the house, and that the price of the house relative to one in a landmark district would reflect this risk.

Posted by: etson at May 19, 2009 11:00 AM

Another interesting thing this city has is the concept of "affordable housing" ... The rent $$ and the income caps are a very interesting formula. They seem to actually REQUIRE you to live with hardship.

Here, you can have this apartment, but don't get a better paying job or take that $1.23/hr raise you were offered!!

Posted by: tybur6 at May 19, 2009 11:02 AM

I love how people blame rent control for all of NYC's problems. I was born and raised here- I've been through all of it. Anyone who thinks rent control was the sole reason for its problems doesn't know NYC history very well.

Kensingtontonka- my parents were immigrants too and also worked like dogs, and owned a co-op. Not every rs/rc tenant is a leech, and not everyone got their apartment through spurious means. I know this is the prevalent myth of the rc leech but fine if you want to believe it. Note: RC/RS tenants pay rent. I certainly did- and yes in the 70's loads of landlords walked away from their buildings- for many reasons.But to think that no rent control or stabilization would have meant cheaper apartments today is without basis.

benson- nothing in this city has done anything for the middle class. That's the problem- from the government on down, the middle class has been ignored. And again, rc/rs is not the reason for it. When developers put up luxury housing in a working class neighborhood and try to charge luxury rates,- that's your answer. Its maximizing profit with as little outlay as possible. Luxury housing was all the rage- not affordable housing. And when people said "affordable housing" it was subsidized housing that the government paid through the nose for, not housing for the middle class.

Posted by: bxgrl at May 19, 2009 11:09 AM

tyburg6- that's also the case for any of the government subsidized serivices. How about that woman and her son who are being charged $1500.00 a month for their room in a shelter? How is that helping her get back on her feet? It's 60% of her present income - she'll be in that shelter for years. Talk about outrageous policies.

Posted by: bxgrl at May 19, 2009 11:13 AM

"And rent control nearly destroyed NYC in the 1970's. Lessons are never learned."

How would you know that????

"o you know how many apartment building owners in NYC and the suburbs quit the business and sold them to coop convertors because they couldn't make a decent profit? Or torched them in the South Bronx and East New York?"

The 70's was a different time! Poverty and unemployment ruled the day and it was not like people had access to credit and money. Those days if you wanted something you had to work for it and money had value, not the "Hot Money" you have today!

"Had there never been rent control and rent stabilization there would be hundreds and hundreds of thousands of more rental units on the market. One-bedrooms in Manhattan would be $1,500 not $3,000."

That's right stupid!!! Please someone answer my question!!!!! What's going to happen when all those Condos come online???!!! TOREN, AVELON, FORTE and the PENCIL FACTORY dust up???????!!!! I think it will put pressure on rents and remember you was depending on that to pay your mortgage. 5 months dumbasses....

The What

Someday this war is gonna end...

Posted by: Return of The What at May 19, 2009 11:14 AM

Etson you do not understand how RS works - RS does NOT set a minimum rent - so WHY doesnt marketrate tenants need RS - if a "middle class" person moves into a 3br apt paying $2100 - and then the next year the LL wants to raise the rent to $4000, that tenant will likely have to move - is that "fair"? when across the street you could have someone making $169K a year paying $1000 for the same apartment only facing a 4% increase.

And yes LL with RS buildings with below market rents will make $ on a change in the law (just like a landowner on 4th ave benefited when the area was upzoned) -but you may have forgotten that this "windfall" is pretty heavily taxed -

and your point of a home owner "being aware of the risk" is nice - but for LLs there is also the risk that the RS system will be adjusted to completely destroy the value of the property as well (look at some of the bills in the state legislature - are you against those as well????) - so since the risk is in both directions the real point is that when the law doesnt work and is being perverted - it should be changed it just seems like your revulsion against LL making more $ is blinding you to the perversion of the RS system as a whole.

Yes BxGirl a RS tenant is potentially subject to small rent increases year to year - but otherwise the effective difference between the RS and RC are small (except for the paperwork)

Posted by: fsrg at May 19, 2009 11:15 AM

"I love how people blame rent control for all of NYC's problems. I was born and raised here- I've been through all of it. Anyone who thinks rent control was the sole reason for its problems doesn't know NYC history very well."

QOTD!!!!!!

The What (Born and raised here too!!)

Someday this war is gonna end...

Posted by: Return of The What at May 19, 2009 11:15 AM

FSRG,
Nothing I said assumed a minimum rent under rent stabilization currently, don't understand where you got that from.

Posted by: etson at May 19, 2009 11:27 AM

Bxgrl, what are the income requirements now for decontrol? $170K/ year for 2 consecutive years? My neighborhood is certainly affordable to a family making $75K, although apparently it is beneath some families with that income level...they only want to live in "good" neighborhoods. All the power to them, but not on my dime. Let the landlords get more income, tax that income and have the library open on Sunday. And throw in a few kids' programs, while we are there.

I am not against housing subsidies, but they at least should be income based. Want a nice apartment you can't afford? Show your tax returns, bank statements, etc., etc. Have a weekend house? Sorry, you'll have to live in Kensington. Or Gravesend.

And ideally, the whole subsidy should not go to just the lucky few. For example,instead of giving $$$ to developers of 80/20 mixed income housing, invest the money in the neighborhoods that are currently subpar for whatever reasons. Let's all share in the bounty.

Posted by: kensingtonka at May 19, 2009 11:36 AM

you said -"There is no need to 'stabilize' current market rents - in fact if market based rents were stabilized, it would end up being a subsidy to bad developers in downturns, because hey would get a GUARANTEED LEVEL of rent for converting condos into rentals"

- well unless I am missing something- without a minimum rent level (which does not exist) the only thing a "bad" developer would "get", is the ability to rent his apartments instead of selling them (which is his right today) and under the Markus plan, he'd actually LOSE out on future market increases (if they occured)

Posted by: fsrg at May 19, 2009 11:39 AM

Not under the current system, but I read this passage of the Markus plan as setting a minimum rent in his system:

"the legislature would set the criteria on what’s the maximum income, and what’s the minimum rent-income ratio, and then the government at large would pay the difference [to the landlord"

Posted by: etson at May 19, 2009 11:44 AM

"Do you know how many apartment building owners in NYC and the suburbs quit the business and sold them to coop convertors because they couldn't make a decent profit? Or torched them in the South Bronx and East New York? Had there never been rent control and rent stabilization there would be hundreds and hundreds of thousands of more rental units on the market. "

I have no issue with those landlords who sold to co-op converters. That was a good decision- and a helathy one. But to use money as an excuse to torch buildings? That's simply and utterly outrageous. My family lived in the Bronx in the 70's- do you know how much realestate was burned out, how many people sufferd and died because some landlord didn't make enough of a profit? How many firefighters died or were maimed? How much money the city lost because those buildings were torched- no, sorry fella- that is totally on the landlords who willfully destroyed their own property. That's not the fault of rent controlled or stabilzed tenants- that's the fault of greed and immorality.

If you want to get an idea of what really happened check out John Finucane"s book interview. John- who I know- was a firefighter and worked in the Bronx in the 70's and 80's.
http://www.whenthebronxburned.com/index.php?option=com_content&task=view&id=6&Itemid=38

Posted by: bxgrl at May 19, 2009 11:45 AM

Remove ALL protections, tax write offs, "incentives", whatever and have the balls to allow the market to decide what rents should be.

Posted by: bridges at May 19, 2009 11:50 AM

kensingtonka- I have no disagreement with what you said- I'm not sure what you think I advocate but a free ride isn't one of them. And I stated several times tenants who abuse rc/rs should have to pay up.

Where we diverge is the demonization of rs/rc tenants. To hear some people on this thread they're all spawns of satan and its understandable that a poor (cry me a river) landlord should walk away or torch his building because he (poor poor man) was not making enough money on it.

Posted by: bxgrl at May 19, 2009 11:50 AM

bxgrl - I am not justifying it. It was horrible. But the owners couldn't get a mortgage to replace a boiler or a roof because they had minimal cash flow and the banks would not lend them money. So the buildings were torched or abandoned. Had they not had draconian rent control that began during WWII, they would have been able to maintain thier buildings. And that is a fact.

As for selling to convertors, they sold them for more than they were worth as a rent-regulated building, but a hell of a lot less if they could have gotten market rents. They did not make a windfall. They just quit. And many of these owners built under the assumption that they would never be regulated. So they were screwed.

Posted by: Suburbandude at May 19, 2009 11:54 AM

There are approximately 1 million rent stabilized apartments and 1 million free market rentals in NYC.

THERE IS CURRENTLY NO LOW INCOME REQUIREMENT FOR EITHER RENT STABILIZATION OR RENT CONTROL IF THE RENT IS LESS THAN $2000/mo. TALK ABOUT A JOKE.

As a landlord who has bought out the majority of my rent controlled and stabilized tenants over the years, my rent roll would go down if the rent laws were abolished since market level rents accross the city would drop.

But it would be worth lower overall rents, in my opinion, to have a normal NYC rental market and not have to deal with the hassles and bureaucracy of rent stabilization/rent control any longer.

Posted by: IronBalls at May 19, 2009 11:56 AM

etson - he is NOT referring to RS laws (or setting a minimum rent)- he is saying leave RS laws to stabilize rents/neighborhoods and for those people (renters) who need assistance to address the "affordability" issue with new legislation that would guarantee a certain rent/income ratio for people earning a certain amount (or less)

So in reality the only windfall (which will be heavily taxed) will be to those LL who bought buildings RS with Rent Rolls far below market....is it annoying - yes, can certain tax policies be adjusted to prevent a ridiculous windfall - yes....but should it justify not changing a broken system - no.

Posted by: fsrg at May 19, 2009 11:59 AM

bxglr - tourching a building is not excusable - and is a crime; but walking away??? - Sorry but I do not support laws that would force someone to continue to lose money in an investment - and frankly I cant see how the system would benefit from that. Simply stated if the return on an investment isnt there (or not worth the effort/risk) then any SANE person will sell (and if they cant sell) walk away - its the way it is SUPPOSSED to work.

Posted by: fsrg at May 19, 2009 12:03 PM

Bxgrl and all;

If you want to know why people demonize RC/RS tenants, please see this article:

http://www.nydailynews.com/news/2008/10/13/2008-10-13_eviction_threat_after_50_years_in_park_s.html

I don't know where to begin in expressing my contempt - yes contempt - for this woman. Is there any gratefulness in her wailing over the fact that for 50 years she paid below-market rents in a prime NYC area, thanks to the force of government? She - and many other RC/RS tenants - speak of this benefit as almost an ownership right, indeed, one that they believe they should have the ability to transfer to their heirs.

Finally, the word on the street in PS is that she owns a house in the country in upstate NY. Doesn't prevent her and her sense of entitlement from crying a river to the press about her "plight".

Pathetic.

Posted by: benson at May 19, 2009 12:06 PM

suburbandude- I know what the conditions were- but you don't torch a building. You can walk away or sell it out- but I repeat- you do not torch it. Fire spreads. How many entire blocks went up because one building was torched.It wasn't just one landlords property- it was others as well. All it did was make the problem incredibly and exponentially worse. And lets look at why rent control came about in the first place.

http://www.tenant.net/Oversight/50yrRentReg/history.html

As early as 1942, people were getting squeezed out of housing- the wartime economy was blazing along, inflation was up. This chapter says a great deal

"By 1969, economic conditions changed as the result of national as well as local economic factors. Nationally, the Vietnam War
caused a steep rise in the rate of inflation and locally, housing
production slumped. The overall vacancy rate which stood at 3.2%
in 1965 fell drastically to 1.23% in 1968. Rents escalated
rapidly in the non-regulated sector. The tightening of the rental
housing market led the City to enact the Rent Stabilization Law
of 1969."

And this: "In response to these spiraling rent levels, Governor Nelson
Rockefeller directed the Temporary State Commission on Living
Costs and the Economy of the State of New York to conduct
hearings and make recommendations on vacancy decontrol. The
Commission, under then Chairman Andrew Stein, recommended
abrogation of vacancy decontrol. Its findings indicated that
vacancy decontrol resulted in average rent increases of 52% in
decontrolled apartments and 19% in previously stabilized units in
New York City, while operating costs increased by 7.9%. Vacancy
decontrol resulted in average rent increases of 47% in Nassau
County and 45% in Westchester County. According to the
Commission, in New York City, the excess rent was not reinvested
in capital improvements, but in fact resulted in an actual
decrease of 30% in renovations."

Posted by: bxgrl at May 19, 2009 12:08 PM

when i moved to the city, i had one of the highest-paying jobs someone right out of grad school can get. i also "lucked" into a rent stabilized apartment. not just luck, actually, because management cos of these rent stabilized buildings specifically target and, in fact, often only rent to people like me (young professionals, just starting out, likely to get married/move up/land in luxury destabilization territory). it's their business plan, and a rational one for an irrational system. i wasn't paying $300 for a classic-6 on the UWS, no, but it was at least $600 cheaper than the next comparable place i saw. how is that fair, or sensible? (and to act like $600, or even $200/mo. less isn't significant is silly. that's thousands of dollars a year you're saving, just because you got lucky.)

the system absolutely is broken. it keeps market rents artificially high, and THAT is what's killing the middle class, if anything. this has been proven time and again by reputable scholars on both sides of the ideological line.

if a single-payer healthcare system isn't fantasy, then reforming NYC's rent control/rent stabilization scheme so that the most vulnerable are protected but that the undeserving (on both the landlord and tenant side) don't get a windfall should be possible. it won't be perfect, no, but it's so far from perfect now that it is unexcusable not to try to fix it.

Posted by: i disagree at May 19, 2009 12:12 PM

Bxgrl - In 1947 developers of new rental buildings were told that there buildings would be market rentals. In the 1960's and 1970's they were told they would no longer be market rentals. In 1968, would you have built a rental building knowing that the City Counsel was clamoring for rent stabilization? Would you have opened a pizza parlor if the City Counsel was clamoring for pizza price controls?

Just the discussion of and threat of rent stabilization brought all rental housing construction to a halt. Certainly it could not have been the rapidly rising rents and the 1.5% vacancy rate (you did learn about supply and demand, didn't you?)

Posted by: Suburbandude at May 19, 2009 12:19 PM

bxgrl - and Andrew Stein was just another political whore who knew that for each landlord there was 50 tenants. What kind of results would you expect from a political whore?

Posted by: Suburbandude at May 19, 2009 12:21 PM

Bxgrl,

Why are folks who moved to NYC twenty years ago so special? Why do they deserve special low rent reals while everybody else has to make up the difference by paying higher rents?

It sounds as if you're trying to defend the deals some of your friends have on their stabilized apartments. Why else would you possibly defend rent laws with NO LOW INCOME REQUIREMENT?

It's totally absurd. . .

Posted by: IronBalls at May 19, 2009 12:24 PM

benson- so she's a perfect example of someone who abuses the system and she should be penalized. Agreed. But its ridiculous to think everyone on rc/rs is like that. I certainly wasn't. And everyone I knew who was in a rs (don't know any rc tenants) apartment were not making big bucks or going to the Hamptons to their vacation house. That's the problem with generalizations, benson.

And let me also point out- the government gave them th e right to pass on their benefit. I don't think its right- but the onus for a bad decision rests wtih the politicians on that one.

Posted by: bxgrl at May 19, 2009 12:24 PM

Bxgrl;

Instead of hypothetical "results" from the likes of Andrew Stein (whom SuburbanDude accurately characterized), how about we speak of what ACTUALLY happened when a city chose to abolish rent control? That city would be Boston about 15 years ago, and the results are there for all to see. I suspect that rent control advocates don't like to point to this situation, because it doesn't support their argument.

Posted by: benson at May 19, 2009 12:26 PM

Let me just say here at the 60th post or so

This whole discussion while interesting is TOTALLY academic

the only proposals related to RS that are being considered are increases in the RS/RC laws as they currently exist.....

Mr Mrkus may have brilliant ideas - but no one (except us and the NY Observer care)

Posted by: fsrg at May 19, 2009 12:31 PM

suburbandude- indeed I did and I supplied you with the reasons for rent control and stablization. You make it very simplistic and simplify it even more by calling Andrew Stein a political whore as an talking point. Would that the whole issue was as clear as you want it to be. But its not.

Idisagree- I agree :-)

Posted by: bxgrl at May 19, 2009 12:33 PM

benson- Boston is not NYC.

FSRQ- true. But at least it was a good discussion to have (although Andrew Stein may not be thrilled)

Posted by: bxgrl at May 19, 2009 12:36 PM

Bxgrl can't defend her position since it's so absurd.

There's no defending a system that allows folks regardless of income to pay below market rents to private landlords, and deep down I'm sure Bxgrl knows it. . .

Posted by: IronBalls at May 19, 2009 12:45 PM

Bxgrl;

I see. So we shouldn't look at what happened in an actual situation, but we should heed the hypothesis of a politician who has an entrenched interest in the status quo. Riiiggghhhhtttt.....

FSRQ;

Sad, but true. Rent control is one of the "holy of holies" in NYC. My wife has an aunt and uncle who live in a rent-stabilized apartment in Queens. They were both NYC public school teachers, and never had children. They have comfortable net worth. Yet, they consider all landlords to be greedy bastards, and take pride in the fact that they live in a rent-controlled apartment. They ignore the fact that the apartment is a shithole, but they think that they've pulled one on the landlord. They drop everything to attend one of those rallies in Albany in support of RC/RS.

In my mind, they serve one useful purpose. I always used them as an "negative" example when I was raising my daughter, of what happens when a sense of entitlement becomes overwhelming.

Posted by: benson at May 19, 2009 12:47 PM

ironballs- who said anything about people who moved here 20 years ago deserving special deals??? And I strongly believe there should be an income requirement. Whose posts are you reading? Not mine obviously.

Posted by: bxgrl at May 19, 2009 12:49 PM

benson- have you gone nuts? You and ironballs even read anything with any amount of reading comprehension? I was quoting from a NYC report on the history of rent control. jeez-

Posted by: bxgrl at May 19, 2009 12:51 PM

Bensen,

You make a good point. Most of my rent stabilized and rent controled tenants seem like pretty unhappy people.

If they'd bought years ago when prices were cheap, they would be able to sell even today for a big profit and live somewhere much much nicer. . .

Instead they're hunkered down in their prewar shitholes with no justification to move since their rents are so absurdly low.

Posted by: IronBalls at May 19, 2009 12:53 PM

I'm so glad bxgrl is here to provide us with endless amusement and further evidence as to why democracy is a failure.

Posted by: Polemicist at May 19, 2009 12:55 PM

Oh, welcome back poley- coming from the likes of you (obviously a hitler fan) thats a compliment. Now- do you ctually have anything intelligent to say or are you going to continue to perpetuate the same reading incomprehnesion of benson and ironballs. Or perhaps you'd actually like to pretend to have a brain and read the entire thread?

Posted by: bxgrl at May 19, 2009 1:01 PM

bxgrl,

If there was a low income requirement, tens of thousands of previously occupied rental apartments would flood the market causing rents to drop big time.

Defenders of RS/RC are loath to let even a single apartment fall out of their clutches because their low rent deals will only survive as long as they have the majority vote.

Posted by: IronBalls at May 19, 2009 1:05 PM

First off, these Landlords either knew what they were buying when they bought these rent-stabilized buildings, and for others, especially uptown or in the outer boroughs, even with stabilized rents, they still had significant vacancies. GENTRIFICATION CHANGED EVERYTHING. Affordable housing may not be a right but I would guess that even most stabilized tenants probably pay more than the recommended 30% of their salary in rent, plus it's in any vibrant city's interest to make affordable housing available to its working class. I do believe however, the state has no right to mandate entitlement burdens on the backs of private owners without giving them some sort of subsidy - its almost always a disaster as we've seen in agriculture and healthcare. The irony of all those tax breaks being given to developers for building condos instead of affordable rental units. The largest constituency of New Yorkers are renters, yet the politicians have always been in the pockets of developers and landlords. It's time to stand up, get some of those subsidies and tax breaks to build or convert all of those half finished projects into affordable housing.

Posted by: Crownlfc at May 19, 2009 1:07 PM

bxgrl,

Polemicist and Bensen both make logical arguments.
What logical argument have you made? I've read all your posts and haven't spotted a single one.

Posted by: IronBalls at May 19, 2009 1:10 PM

And I repeat again, ironballs- I have no problem with an income requirement. I would appreciate you reading my posts before attacking me for what I did not say.

I'm sure it would free up tens of thousands of apartments- whether or not the rents will drop because of it, my attitude is we will see.

Posted by: bxgrl at May 19, 2009 1:14 PM

ironballs- and you are being an assh*le why? You attacked me on things I never said- benson made assumptions on things I never said. If that's your idea of logic is a damn poor one.

Posted by: bxgrl at May 19, 2009 1:16 PM

Crownlfc,

I disagree. Landlords like me are not the ones who would benefit if rs/rc were terminated like it was in Boston. Surely rents overall would drop big time with hundreds of thousands of rental apartments hitting the market for the first time in decades.

Free market renters -- those who weren't lucky enough to score a $500/mo stabilized two bedroom floorthrough on the Upper Westside are the ones who would benefit from LOWER RENTS.

In other words, MOST PEOPLE would benefit. . . sure landlords with a majority of rs/rc tenants would too, but other landlords, like myself, with few rs/rc apartments, would make significantly less money as a result of lower free market rents.

Posted by: IronBalls at May 19, 2009 1:21 PM

It's really a double edged sword. Landlords know they are losing money off of RC/RS apartments - but know the system can't be abolished because over time, rents would drastically drop due to the 1 million market rate apartments hitting the market.

So what's the logical solution? Tax people who are already paying too much money on rent?

This really irks me.

Posted by: dirty_hipster at May 19, 2009 1:26 PM

"I do believe however, the state has no right to mandate entitlement burdens on the backs of private owners without giving them some sort of subsidy"

Crownlfc so then you are AGAINST RS/RC because as it is currently construed it is affording an "affordable housing" benefit to many people and being subsidized by the LL.

This is exactly what Markus is saying in his interview......

Posted by: fsrg at May 19, 2009 1:28 PM

bxgrl,

Sorry, I don't mean to be an assh*le. The stupidity of rs/rc admittedly drives me nuts.

What defense is there for taking property rights away from rightful owners and giving them to folks who never took the risk of buying anything?

Section 8 has flaws but works because all tax payers support it.

Most landlords, myself included, bought multifamily property in NYC with the just assumption that eventually the rs/rc laws would be overturned because they make no sense for society at large -- hurting private landlords as well as the average renter far more than they help the lucky rs/rc few.

Posted by: IronBalls at May 19, 2009 1:34 PM

Not to mention, I always assumed the issue would be fought to the Supreme Court and be outlawed as an unconstitutional abuse of private property rights . . .

Posted by: IronBalls at May 19, 2009 1:37 PM

dirty hipster- most LL are not "losing" money off of RS/RC apartments - on the contrary they may be making a fortune - as etson said above - most LL bought with a RS rent roll and therefore paid less for the building and thereby providing for a return (and if you properly reinvest and run a good operation - this small margin can be greatly expanded)

That being said the RS/RC still creates crazy situations and punishes the small operator (and his tenants) who does not have the resources or administration to reinvest, improve and manage the complicated system. Not to mention that it creates a perpetual shortage of apartments as people in below market situations horde their leasehold for eternity.

The point of Markus' comments is that RS is being miss used - it SHOULD NOT be a tool of affordability. (think about it - why shouldn't a vacant apartment simply be rented at market rate? - why should tenants have to get lucky, make a payoff, or otherwise have a connection to get one of these vacant below market apartments - while the rest have to pay a higher market rent?)

This point is important now - not because there is a push to eliminate RS but rather because the legislature appears poised to increase RS control in the name of affordability - when it is completly the wrong tool to do so, and it will result in many properties becoming unprofitable ("changing the deal") and may lead to abandonment and neglect.

Posted by: fsrg at May 19, 2009 1:41 PM

why are people saying that rents went down in boston on market rate apartments when rent stabalization and control was abolished, when that is in fact not what happened at all. rents did not go down on market rate apartments. it would make sense that they did, but they didnt. also i am only repeating what ive heard many times about boston, so if im wrong sorry, i really have no waqy of backing up what i heard.

*rob*

Posted by: PitbullNYC at May 19, 2009 1:42 PM

Ironballs-On that you and I both agree- and about how rs/rc is abused. I don't think the system is good or fair and the renters who abuse it ruin it for everyone.

I have been very lucky most of my life with my landlords- maybe because they are all small landlords, not big managing agencies. And right now I rent from a good friend- and I see how hard it is to be a landlord. I've never made big bucks (so much for the myth of the rich creative professional ) so having a rs apartment was a godsend- and so was my landlady. I took care of a lot of things around the building to help out and she was great.

Posted by: bxgrl at May 19, 2009 1:45 PM

Ironballs - just to be fair - it is possible (during non-bubble times) to buy properties under RS and make a tremendous amount of money - all you need is patience, tons of cash (to invest in improvements) and effective management plus some luck (i.e. no $150 barrel oil, no professional deadbeat tenants, no more LL 11/98 type expenses mandated by NYC, etc...).

Buying with the idea that RS/RC would change in the LL favor is frankly nuts - the real fear is the the laws are going to be changed decidedly in the tenants favor - in which case all the patience, reinvestment and good management may not matter - and in that case many LLs will turn to their lenders and say - "Congratulations, now you own this POS!"

Posted by: fsrg at May 19, 2009 1:54 PM

Ironballs - You are so right. Life's losers are the 60 and 70 somethings hunkered down in their rent stabilized apartments on the Upper West Side, when they could have bought a Classic 6 in the late 70's for, I'm guessing, less than $100,000.

Posted by: Suburbandude at May 19, 2009 2:02 PM

Does anyone really think they will EVER get rid of RC/RS laws in NYC? It seems like whenever they try to change anything pertaining to these laws all hell breaks loose.

Posted by: dirty_hipster at May 19, 2009 2:06 PM

When Charles Rangel and David Patterson have rc apartments, there's something wrong with the system. While I believe our government should make provisions for folks who need assistance, has rent control and rent stabilization have proven to be a lousy, unacceptable solutions.

Posted by: East New York at May 19, 2009 2:07 PM

I have yet to see rents go down after any form of rent control is eliminated.

Posted by: mopar at May 19, 2009 2:17 PM

ENY - why is it wrong for Patterson and Rangel to have RS apartments - they are public servants whose income certainly wont keep up with the 20,30,80+% increases that can happen yr to yr in some NYC neighborhoods - should they have to move everytime rents jump much faster then general inflation???

That being said - why should they or ANYONE be allowed to rent a new apartment for a rent BELOW the marketrate, when others in the same situation cant and either have to pay much more or not move at all.

RS is not, was not and should never be a tool for general affordability - it is, was and should be simply a tool to allow people to have some stability regarding rent increases to avoid wholesale dislocation of people from their homes.....vacancy decontrol NOW!

Posted by: fsrg at May 19, 2009 2:21 PM

"they are public servants whose income certainly wont keep up with the 20,30,80+% increases that can happen yr to yr in some NYC neighborhoods - should they have to move everytime rents jump much faster then general inflation???"

Yes, they should. Why on earth should they be different from anyone else? That's the dumbest question I've heard today.

In addition, as particularly noteworthy public figures, both of their incomes (particularly Rangel's) far exceeds their salaries as public servants (when you factor in speaking fees and other promotional opportunities).

Posted by: East New York at May 19, 2009 2:56 PM

umm ENY - having a RS apartment hardly makes them "different from everyone else" - "Everyone else" who is in a RS apartment - which is about 1 MILLION people - do not have to move when rents jump much faster than inflation; because their rents only go up by the approved amount.....there is no means test for a RS apartment, anyone who can find one is entitled to one, so why shouldnt a politician be able to get one - if they can find one????

If you want to means test for RS - fine but as it stands right now a guy making 20M in a 1500 a mo apartment can have a RS apartment - the question is why should Rangel and Patterson be discriminated against different from anyone else?

Posted by: fsrg at May 19, 2009 3:27 PM

FSRQ,

Of course the current rent laws won't be overturned any time soon. And of course the bigger risk is the BS going on right now with the City Council trying to take over the Rent Guidelines Board from Albany.

And I never said you can't make money buying rent stabilized/controlled housing. Thousands of investors including myself have done it and will continue to do it every day.

The real problem the rent laws pose for landlords profitability are in the marginal neighborhoods where small landlords don't have the money to take bad tenants to court, pay large tenant buyouts, or even, most importantly, have the ability to collect a decent rent even on the free market.

It's the small, often minority landlords in primarily minority neighborhoods who are most hurt by NYC's rent laws -- a major reason why housing in these areas continues to be crappy and in disrepair.

It's funny actually. Often at the public Rent Board meetings, the landlords represent true racial diversity, while most of the screaming tenants are middle aged fat white folks.

Posted by: IronBalls at May 19, 2009 3:35 PM

First of all, as I understand it, Rangel and Patterson have rent controlled apartments, not rent stabilized. Secondly, when I said "everyone else," I mean folks who pay market rate rent. Who is there to protect THOSE folks from "20,30,80+% increases that can happen yr to yr in some NYC neighborhoods"?

Bottom line, I'm saying that the only reason anyone should have a rent controlled or -stabilized apartment is on the basis of need. So yes, in that sense I believe there should be a "means test." I understand that this is not the case presently.

Posted by: East New York at May 19, 2009 3:38 PM

FSRQ;

I get that you are arguing for RC/RS to be a mechanism to protect against excessive inflation in rents, rather than another type of affordability subsidy, but how would that work? I don't know how old you are, but the last time we tried that was Nixon's disasterous wage and price controls. Regardless of the intent, it still comes down to price controls and all that it brings: black markets, shortages, inefficiencies, etc. Also, it would still give renters an incentive to hunker down in an apartment, rather than brave the open market. I just don;t see how it could work effectively, ESPECIALLY since renters are a majority in NYC. You think politicians won't meddle with it to buy votes?

There really is only one way: take this beast behind the barn and shoot it. Let affordability be handled by Section 8, affordable housing subsidies, etc.

Posted by: benson at May 19, 2009 3:44 PM

And repeating an earlier post, the biggest damage of rs/rc, isn't to landlords, who by and large are doing fine.

RS/RC increases rents for all market rate renters (by far the majority of people)in exchange for giving the lucky few a lifelong often nearly free rent ride.

Not to mention that the rent laws make NYC completely unafordable for so many hardworking young people who would love to move here, but can't afford the artificially high market rents that rs/rc fuel.

Posted by: IronBalls at May 19, 2009 3:45 PM

"There really is only one way: take this beast behind the barn and shoot it."

Agreed.

Posted by: East New York at May 19, 2009 3:55 PM

Benson - no price controls - its simple -

100% vacancy decontrol and no succession rights except to spouses - with re-stabilization on all marketrate apartments;

Then yearly increases based on some inflation number (maybe based on Cola+fuel prices+taxes)

Yes long-time residents (especially in areas with high rent inflation) may eventually have apts far below market - so what....the alternative is to force them to move - which disrupts neighborhoods and communities....once they move or die, the apartment goes back to market.

Posted by: fsrg at May 19, 2009 4:52 PM

Well Ironballs, that's exactly what may happen and I suspect many Landlords may regret what they're wishing for. You being the exception, I'm tired of hearing many (esp. larger) landlords inaccurately say that they "lose" money on their rent-stabilized apts. The RSA has never, EVER, voted for a rent freeze or decrease in over 30 years, even though rents have gone up way beyond inflation in that time frame. Like I said, rent stabilization didn't happen overnight, if a landlord thinks he/she is losing money on their good faith investment then they should get out of the business. FSRQ, EXACTLY, that's what I'm saying, the idea behind rent stabilization was a noble one but its execution was flawed, and it has been abused by both sides. It’s fundamentally UN American for the State to mandate an "entitlement" and then put 100% of the burden on a private business. Right now, affordable housing in NYC is either for the very rich or the very poor. Housing for the working/middle class is in crisis. It’s up to the city and its renters to take control and address this directly.

Posted by: Crownlfc at May 19, 2009 6:05 PM

East New York: FYI I doubt Patterson/Rangel have rent controlled apts, it's most likely stabilized and apart from Rangel using one of those apts as an office the only other thing that may be appropriate is if they have made more than 175k in 2 consecutive years.

Posted by: Crownlfc at May 19, 2009 6:19 PM

"it's hard to make any rational arguments in favor of the current system: Lifetime entitlements makes no sense at all" Where does he think he is Seattle? In a rational city, Suburban Dude would set policy,\.

Posted by: edifice rex at May 19, 2009 6:30 PM

Riddle me this???!!! What is going to happen when all the Condos come online latter this year??????!!!!!! I have one answer: They will compete for renters!!! Rent Stabilization and Rent Control will be moot!

The What

Someday this war is gonna end...

Posted by: Return of The What at May 19, 2009 6:40 PM

The What

Someday this war is gonna end...

Posted by: Return of The What at May 19, 2009 6:40 PM

And why again is it that NYC can't have a normal free market rental market like every other city in the country?

Why again does this city need a web of "rent laws" to supposedly protect the "working class" while nearly every other city has lower rents AND no rent laws at all.

Posted by: IronBalls at May 19, 2009 7:35 PM

What,

That's a good point -- one that hasn't been mentioned yet on this thread.

As a landlord, I've noticed rent stabilized tenants are far more amenable to buyouts these days, since it's much more affordable than it used to be for them to find housing elsewhere.

On the other hand, rent controlled tenants still respond with a cold blank stare when I offer them money -- which makes sense since where else can somebody rent an apartment for less than $125/mo? Rent control rents are a fraction of what maintenance charges would be if the tenants OWNED instead of rented.

Rent controled folks really are supported completely by their landlords. As a longtime landlord, I've never once received a thank-you note from a rent controlled tenant, even though I've renovated their hallways, replaced their boilers and roofs, sweated over minute details like garbage collection and rodent control, etc., for years.

Posted by: IronBalls at May 19, 2009 8:37 PM

"What,

That's a good point -- one that hasn't been mentioned yet on this thread."

Ironballs I walk or drive into Downtown Brooklyn almost everyday and the amount of Condo construction is Mind-Blowing! Plus let's not forget Bloomberg gave out plenty of Tax-Breaks to these Assheads to build but with the Stuyvesant Town?Cooper Village ruling if the Condos go rental they may be subjected to Rent Stabilization laws! How in the hell are they going to recoup the MONEY?????!!! A Asshead living in the Toren paying 900.00 a month??? That will put massive pressure on other Homedebters!!!!!!!!!!!!!!!!!

The What

Someday this war is gonna end...

This is my new Pet-Peeve!

Posted by: Return of The What at May 19, 2009 10:53 PM

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May 19, 2009

Rent Board Chief on Shifting Onus from Landlords

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