Open House Picks: Townhouses

I am also interested in finding out how the market prices the DeGraw Street house. It has been on the market for some time, and not moved. It is my understanding that one of the RC tenants lives with her son (as noted above) and that his sons live with them too. As a buyer, you are facing an essentially permanent RC apartment with no hope of market-rate rentals. I am not sure of the other RC apt.

There has to be a significant discount on the property. Why is anyone going to buy a duplex with modest rental income for $1.6MM?

About a year ago I was reading a study about rent differences in cities with and without rent stabilization. The findings were that cities with RS basically had two separate markets.

In cities without RS, rents for available apartments typically fell around the average rent – sometimes below, sometimes above – in a bell curve. Advertised asking rents and currently paid rents had a similar curve. However, in cities with RS(and I believe NYC was the worst), there was one curve showing actual rents being paid, and a much higher curve showing rents for available apartments.

The average rent in NYC at the time of the study was something like $650/month, and the average rent of available apartments was $1500/month. I don’t have the study in front of me, but I believe they controlled for apartment size.

Rent stabilization lead to much higher free market rents, rather than a more natural range of rents. A few benefit greatly from RS, and many pay higher prices than they would if the market truly were a free market. Boston got rid of RS, and I heard that average rents went down. And although the retiree could no longer afford the 3-BR in a prime locale, all middle and lower class housing didn’t disappear.

I agree that it’s important to keep low-income housing, but RS does not seem like an efficient way to do it.

And Anon at 7:59, I don’t see how the landlord making an extra say, $1000/month somehow benefits the neighborhood more than the tenant saving that amount on rent. The tenant could spend that extra cash in local businesses. Or the landlord could.

But either way, you’re still just thinking of the neighborhood in terms of cash flows and not as a place people call home. RS/RC protects a neighborhood (and some of its inhabitants) from the brute forces of the market and gives it (and them) a chance at some continuity. I think that’s a benefit, even if it’s not necessarily monetary.

I realize that not all rent-stabilized tenants are elderly or disabled or low-income. But I also know that RC/RS is one of the only things that gives residents some assurance of not getting kicked out of their homes as soon as their lease is up. If every apartment in NYC got jacked up to current market-rate every year when the lease came due, you can bet your stake in American capitalism that there wouldn’t be any elderly or disabled people left in certain neighborhoods, much less any Puerto Ricans, Poles, African Americans, writers, artists, social workers, people with children, people with dogs, and generally, people who want to live in the neigborhood cause it’s been their home for years.

On the macro level, RS/RC have forced neighborhoods to gentrify at a much slower pace than they would have naturally over the past ten years. And I for one am happy about that. And it’s not like either RC or RS guarantee that an apartment will stay below market rate forever. They just slow the inevitable.

On the micro level, let’s say you live in a non-stabilized apartment and you’ve lived there several years and you love the neighborhood and you want to stay there. Let’s say you make a decent salary, you’re not low-income, but you’re not in the market for a brownstone or anything. Let’s say the neighborhood is on of those places that’s gentrifying at a rapid rate, but your landlord has only raised the rent by nominal increases every year cause you’re a good tenant who pays your rent on time and you don’t bother him for little things. Let’s say one year you need certain repairs done to your apartment (because, say, the heat and hot water only work 50% of the time), but when you call the landlord, he just refuses to make these repairs cause it would entail replacing the whole boiler, and you freeze your tush off for several months, and finally decide to call the city. And the landlord gets mad and wants you out, so he just raises the rent to “market rate” when your lease is up that year. You’re essentially being evicted because you asked for perfectly legal repairs.

And it’s not that the landlord’s wife is having quadruplets and they need your apartment for a nursery, and it’s not that he’s hurting for money and needs to raise the rent. And it’s not like he won’t have to replace that damn boiler at some point, if he intends on renting the apartment out in the future. In fact, as far as I know, my previous landlord STILL hasn’t bothered renting my old apartment out (yes, that was me), two years later. He was just being vindictive. And I know I’m not the only one in the city who’s been through that.

I can’t help it, I heart rent stabilization.

And, Bottle, (sorry for the length of this post) I do agree: low-income housing is a big issue. And I’m all for it. But in the run-away NYC real estate market of the past few decades, there has been little to no political will to create enough affordable housing for the city’s lower or even middle classes, and rent stabilization has done a good job of taking up the slack. It’s done its job, and now it’s slowly disappearing, as RS apartments hit the $2000 legal rent line and people die or move out of their RC apartments.