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July 28, 2007
Rent Control
I've owned a 4 unit building for the past 15 years in the Slope. The tenants on the top floor, who pay $240.39 a month for a six room 1300 square foot apartment are, obviously, rent controlled. I've had one frustration after another dealing with the situation. The latest, is that the NYCDHCR had a "Fact Sheet" for landlords saying there was no time limit for filing for MCI rent increases. Guess what, after putting $50,000 into MCIs I find out the "Fact Sheet" is wrong and I cannot get a one penny increase because I missed the deadline. Anyhow, are there other landlords out there with rent control/stabilzed tenants that would be interested in forming a loose affliation to lobby our state legislatures to get some relief for landlords who are losing money every month in subsidizing their rent control/stablizied tenants. I think especially with rent control tenants there is not a lot of sympathy from the general population and something could be done.
Comments
Its called the Rent Stabilization Association (RSA). They provide landlord support and help you file forms etc...they represent landlords and I believe do some lobbying.
Also see chipnyc.org they do some of the same.
There are even more out there
I'm with you but....15 years ago you must have known they were controlled and the building was probably priced accordingly. your operating costs have gone up but so has the value of your investment.
Posted by: Derek at July 29, 2007 12:48 AM
ru jewish by any chance ?
Posted by: hiya at July 29, 2007 2:52 AM
Hiya: no, I'm not Jewish, Roman Catholic, but I still resent the anti-semitism.
Yes, we realized we were getting a rent controlled tenant but we had no idea of just how ridiculous the city laws are on this, or the hassle it would be in having to deal with this woman.
Posted by: Anon at July 29, 2007 8:12 AM
It will be hard to get the legislature to abolish or modify rent control because of one simple reason: votes. Landlords and real estate interests may contribute tons of cash to political campaigns, but the legislators know that tenants vote. (And if they don't, the tenants quickly tell them.)
Posted by: Anonymous at July 29, 2007 9:50 AM
Imagine a system in which one group of people, with average or below-average incomes, would have to pay a premium price for a critically important product, such as a place to live. But imagine that a smaller group, often better off than the first group or with more political influence, could receive the same product at a huge discount.
This is how rent control works.
It works badly.
Posted by: anon at July 29, 2007 10:32 AM
It is hard to be sympathetic because you probably bought the place thinking it was under-priced relative to market value even with RC tenant, and didn't take enough time to talk to landlords of RC tenants before you made the transaction. Perhaps you rushed it, afraid that someone else would "snap up the bargain".
RC is a stupid system. Mind-bogglingly stupid, no argument from me on that, but I don't really have much sympathy for anyone thinking that they could "somehow" get rid of or squeeze rent upwards on a RC tenant. I think you have to pretend the space they occupy doesn't even exist. Or is actually non-existent AND going to cost you money.
How does the price for the place sound now? maybe you should sell it.
Posted by: Anonymous at July 29, 2007 12:50 PM
When I purchased my brownstone I there were three rent controlled tenants. One agreed to a buyout and one was a medical student who moved on. The one who stayed is a complete and absolute nightmare. I think he feels as trapped as I do and calls in violations on me and constant noise complaints on my other tenants. I think he believes I am trying to get rid of him (I'm not) and therefore wants me to get so frustrated I sell the building. And he seems to think his fellow building dwellers hate him for having low rent. I wish I had some advice or input but I'm just as frustrated as you. The system is broken. It leads to paranoia (they tenant feels they are being stalked and might be killed be a greedy landlord) and the landlord ends up feeling like a slumlord.
I hate to use a cliche--but hang int here and do as the poster above said - pretend the space doesn't exist or you will drive yourself insane.
Posted by: Anonymous at July 29, 2007 2:50 PM
Actually de facto NYS government policy is toward ending 'rent control'. They are slowly, or not so slowly, eliminating those units.
There is no legislator or public official in NYS who can or will interfere with that trend.
Posted by: tom at July 29, 2007 4:03 PM
Same topic and varying opinions on this post:
http://brownstoner.com/brownstoner/archives/2007/07/house_of_the_da_346.php?comments=10#comments
As to you OP..I also say you got what you paid for..When you purchased the property you knew you had 3 RC tenants...what if none of them wanted to move..then what? It is ignorant to believe that you would have walked in an bought them all out in on deft move..I can only imagine how you have turned this issue into "poor poor me"..what about the tenant who most likely cannot afford to live anywhere else and in all honestly should not have to..just because you made a conscious decision to buy this property fully knowing what was involved.
Coming to Brownstoner for sympathy and "backhanded" techniques may get you what you want in the end but will never allow you have a clear conscience.
Imagine you rent a store; if you agree to pay $200 a month after signing a 100 year lease to rent said space and after 40 years of building on the property establishing your business in every feasible way and making every payment, the bank sells it to another bank which says to you "I dont care what they told you" - we will need you to now pay $2000 a month for the same land(screw your stuff, your situation, your developed reputation and your perfect payment history) or else you have to go. Would you not be happy to find a law that protects you? and would you not use it..
Laws exist for this exact reason, so insurance companies, car companies, landlords, the gov't and store owners dont simply change what they charge when ever they want to, whom ever they want..without justification..
Empathy is a hell of a thing..if this were happening to someone you gave to craps about you would be on their side fighting..perhaps you should consider that..beforing crying about your "hardships'..
Posted by: cry cry cry at July 29, 2007 5:49 PM
Romans killed jesus, so whateva!
and Catholics priests like little boys
Posted by: hiya at July 29, 2007 9:17 PM
Actually "cry cry cry" the OP didn't have the three RC tenants- I did...and I said I didnt want tp get them out. I was saying it is a situation that is tense for both parties. You should read more carefully before beginning your rant...
Posted by: Anonymous at July 29, 2007 10:07 PM
Cry cry cry, you are a self righteous ass and you deserve a bit of an intellectual smackdown.
The OP didn't at any point say he wanted to use any "'backhanded' techniques". (And you were the first post to use the word "backhanded" so I'm not sure why you're putting it in quotes - who ARE you quoting?).
1) The OP said they put $50,000 into MCIs (Major Capital Improvements) AKA RENOVATIONS. They improved the building, and ostensibly, the living coniditions for the tenants.
2) The OP also said they were misinformed by a "fact sheet" published by a NY State agency (OP - you may have some recourse w/ legal action against the state, as the "fact sheet" was published by them. Have you pursued this with a lawyer?).
3) The OP is inquiring about other landlords who are interested in lobbying the legislature to change the laws which are generally acknowledged as antiquated and a bad, broken system. This is not "backhanded" - this is part of our legal / governmental system. Tenants' groups lobby the legislature too - is this "backhanded" of them? I don't think so.
4) The OP is obviously not in this for a quick buck - (s)he said (s)he's owned the building for 15 YEARS.
And you assume a lot more: that the tenat "most likely cannot afford to live anywhere else", that $50,000 isn't a "hardship" for the OP, etc. And then you illustrate your point with an asinine analogy about some hypothetical bullshit store with some bank and a 100 year lease that is annulled by the changing of hands of the property? Come on. Grow up.
Maybe a better analogy would be to compare this with the 1973 oil crisis - you have a situation where "old oil" (previously discovered oil) had price caps imposed, while "new oil" was sold on a free market. As a result, the price of "new oil" skyrocketed and "old oil" was withdrawn from the market, causing a scarcity at the pump and high gas prices.
The short supply at the pump resulted in long lines and with the imposed rationing, people were only allowed to fill their tanks on specified days.
See where I'm going with this? It's the same thing with housing. Rent control artificially caps prices and effectively removes a segment of the housing stock from the market, thereby removing any incentive for landlords to give a shit about the condition of their tenants' living spaces and encouraging the "backhanded techniques" you're so outraged by. This person is actually IMPROVING the living conditions of his R.C. tenants and you call it "backhanded".
If you're going to post here, get your facts straight (they're right there in the OP's post) and get a clue.
Now that I've gotten THAT off my chest, OP - please do post any information you find out about lobbying the legislature against rent control. My rental property isn't RC, so it would actually hurt my rental income, but having previously been a renter and having many friends who still are renters, I am obviously strongly against it.
(See, cry cry cry - this ISN'T motivated by self interest.)
Posted by: Anonymous at July 30, 2007 4:34 AM
Oh yeah, I forgot to mention in my analogy that just as with gas, the "new oil" housing stock (the non RC segment of the NYC market) suffers from skyrocketing prices, long lines, waiting lists and elaborate, expensive, inefficient systems for allocating resources (at least drivers didn't have to pay a broker 15% of their gas cost just to find the station).
See? It just plain doesn't work.
Posted by: Anonymous at July 30, 2007 4:48 AM
Thanks for the support anon 4:34.
Before I rant, this is my idea. I don't really like the RSA because they haven't achieved a lot as far as I can tell and I don't want to pay their membership fee. I've been calling my state legislator and assemblyman directly and I'd like to get others to do the same and thell them they will be voting on this 1 issue - have you supported legislation that will provide a more equitable footing for landlords with rent control tenants.
Yes, the tenant has enjoyed a considerably improved building because of the significant money put into the building and she has responded by doing things like calling the city incessantly complaining that there is "no hear or hot water" because her apartment is only heated to about 75 degrees during the winter as opposed to the legal limit of 68. It's like a sauna in her apartment but she wants it hotter, the other tenants leave their windows open all winter! To all the "greedy landlord" posters attacking me I suppose you also support the waste of oil this causes, the environmental impact, and the money the city wastes paying inspectors coming into my building to "investigate" her heat complaint. Do you pay taxes? Guess I'm also greedy to complain about this, huh? Why do I keep the building so hot? Because when these people come they sometimes note other "violations" that no one cares about that can cost me thousands of dollars from "incumberances in the hallway" to cracked masonry in an airshaft that one one ever even mentioned to me because they handn't ever noticed it or cared. It's an airshaft for god's sake.
This woman has cable hooked up to a tv in all 6 rooms in her apartment with numberous big screens. I bet her cable bill is higher than her rent and I'm greedy? Her rent doesn't cover her share of the heat, let alone maintenance, insurance and taxes and I'm greedy? She has a family that comes and visits her in a nice brand new SUV, and I'm greedy for wanting her to pay more of her share of the upkeep of the building?
Posted by: Origanal Poster at July 30, 2007 7:31 AM
wow that is criminal. rent control is absurd.
Posted by: Anonymous at July 30, 2007 6:36 PM
OP,
I think lobbying on Rent Control is tough. There are very few units under Rent Control, most of the RC tenants are very elderly and most buildings with RC tenants have been sold to a new owner who knew of the RC tenant before the sale.
If you want to pursue this, I think the only thing that would work would be a slow transition to Rent Stabilization rents for the apartments that get transferred to a non-elderly tenant. So if when the original tenant dies and the apartment is transfered to their caretaker the apartment could over the course of 10 years transition to the average Rent Stabilization rent in the area with the terms of a standard Rent Stabilization lease. Then at the end of the 10 years it would be subject to decontrol under the same lax standards as RS. I think this could fly because you would be getting full RS rent at the end of the 10 years so you wouldn't have a huge incentive to get rid of the tenant, unless they were actually a bad tenant, and the transition is long, so pols would worry less about getting blamed for a lot of backhanded evictions. While you may not be managing this building by the time the apartment transitions, it would still increase the value of the building based on the future value of that apartment.
In order to get this type of deal you might need to give up something, like making it a little easier for a caregiver to inherit the lease. Don't worry too much about the caregiver being upset over the steady rent increases, if they just got an apartment at $300/mo they were surely paying a lot more before and will consider themselves incredibly lucky.
PS As for the heat, older people often feel cold, I've seen granny's complain that it was too cold in a room in the high 90's. That she calls the city rather than you is probably due to paranoia, which is unfortunately also a common symptom of aging. It might be time to get her signed up for programs for the elderly like home delivery of meals and visitors, if she has family it might be helpful to get them involved. Human contact helps alleviate the paranoia and regular meals will help her regulate her body temperature.
Posted by: anon at July 31, 2007 10:09 AM
For the haters above. Book- God Is Not Great: How Religion Poisons Everything.
Posted by: anon at July 31, 2007 12:07 PM
I had a rent controled tenant paying $175 for 6 rooms. eventulally over 6 years we got the rent only up to $310! Talking with my accountant he suggested buying her out by making an offer . think about the apartment as a bussiness and calculate what you are lossing over 10 years if you leave things as they are. Then make her an offer that allows you to make a profit over those 10 years instead. I mean what are you willing to spend to gain a profitable bussiness? I paid out $40,000. but was willing to go to $60,000. That was 4 years ago. Once she was gone the rent control was over. I gained the money spent back in 2 years and saved my sanity imediatley. the system is too difficult to beat. My tenant was happy too and glad to move on to a ground floor apartment elsewhere.
Posted by: guest at August 19, 2007 5:05 PM
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