Rich Owners 1, Rent-Stabilized Renters 0
While affordable housing advocates had reason to cheer last week with HUD’s blocking of the sale of Starrett City, they may have bigger problems in the long run from a smaller appeals court ruling that was handed down last month in the long-standing case of the East Village family that has been trying to clear…
While affordable housing advocates had reason to cheer last week with HUD’s blocking of the sale of Starrett City, they may have bigger problems in the long run from a smaller appeals court ruling that was handed down last month in the long-standing case of the East Village family that has been trying to clear an entire 15-unit building in the East Village for its personal use. Alistair and Catherine Economakis bought the building at 47 East Third Street in 2003 and told tenants that their rent-stabilized leases would not be renewed; they started eviction proceedings against the six hold-outs in December of that year. After several rounds of suits and appeals, an appellate court in Manhattan ruled in February that the clear and unambiguous provisions of both the Rent Stabilization Law and Code permit an owner to recover an unlimited number of stabilized units for personal use and occupancy without D.H.C.R. approval. The implications of this could be quite profound, it seems to us, given that there are over 200,000 rent stabilized units in Brooklyn alone. Basically, there’s a huge arbitrage play for anyone with the financial means to buy and convert a rent-stabilized building. Does anyone know if this applies by extension to rent control? If so, what about SROs? Would this remove the necessity for a Certificate of Non Harrassment in the case of personal use?
Revising the Limits on ‘Personal Use’ [NY Times]
Photo by alaspoorwho
10:07, we didn’t omit the personal use thing at all. we said that the arbitrage opp existed for “Anyone” with the financial means, as opposed to any corporation or group.
let’s clarify a few things here. by and large, rent- controlled tenants do not pay $200 a month. in fact, in some cases, they pay more than rent-stabilized tenants because they pay different percentages of rent increases.
second, the owners of this east village building have not yet won the right to reclaim the entire building. they have won the right to make the case in court that they need to evict the tenants for personal use.
third, in order to take advantage of the ‘personal use’ provision, the building must be owned by individuals. it does say this in the Times piece, but i think b’stoner likes the controversy of rent-regulation arguments on the board, and so ommitted it from his summary. i doubt that the 200,000 rent-regulated apartments in brooklyn are located in buildings owned by individuals.
finally, since this whole thread is going to turn into another long rant about rent regulation, and ‘poor’ landlords who can’t do what they please with their property…well, maybe i’d be more supportive of them if just once one of these landlords would open their books and show the world how ‘poor’ they are. personally, as a taxpayer and property owner, i wonder why i’m subsidizing the builders of luxury housing with abatements. that’s just as much an ‘inefficient way for society to allocate its housing resources,’ isn’t it?
I can’t wait until rent stabilization is abolished and then all you bankers and brokers have no one left to police your streets, teach your kids, walk your dogs, or fix you your over-priced cappuccino. The entire city will have the personality and, more importantly for you, the complexion of Murray Hill (which I’m sure you’ll appreciate). The elitism, snobbery and complete lack of any kind of empathy for those who can’t afford to buy on this board makes me ill.
whhhooo I really should have proofread my post…..
there is a substantial difference between evicting a rent controlled tenant and a rent stabilized one, the former being much much morw difficult. anything this article shows just how difficult it is to evict all such tenants in general. they started in 03 it is now 06. suppose that a building traded at a 30 percent discount, that would only result in about a 7 percent annual compounded return. leveraging may amplify that, but carries its own bag of risks.
Please remember rent control and stablilization were instituted because of the greed of landlords. They brought it on themselves and now we are stuck with an inequitable system. But it is their fault.
Please remember rent control and stablilization were instituted because of the greed of landlords. They brought it on themselves and now we are stuck with an inequitable system. But it is their fault.
Rent Control & Rent Stabilization should be abolished.
In this case it could be a major financial windfall for the owner.
But the property priced as rent-controlled/Rent-stabilized building..
and now own one that is free of that.
Could not buy empty/free-market building at anything close to a controlled building.
PS… even when taking over space for own use– I don’t believe can evict RC over certain age.