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