NYC Housing Rent Control Battle, Round: 99,999,999,999
  • http://www.cssny.org/userimages/downloads/NewHousingEmergencyMarch2011.pdf?tr=y&auid=8237079


    As the supply of affordable housing continues to dwindle, and we continue to have budget deficits, what should we do?


  • Symptom of bigger problems

    Have to ask why NYC RE is so freaking expensive, whether it's more relativel6y expensive now than it was in the past and if not what has changed

    Also the fairness of the subsidy of rent based on income & location. An apt in Tribeca is like $10K/mo, should I be granted a subsidy because I want to live there? A reasonable solution would take some sacrifice.

  • In an attempt to protect renters, the government seems to be in the business of attempting to determine what rate of return on investment is reasonable.

    As more apartments become free market, we are returning to an environment we have not had in decades.

    Good or bad?

  • a free market w/o regulation isn't free.

  • Boygabriel said:a free market w/o regulation isn't free.

    I think this statement is bogus, but I do think regulation is a necessary part of a system of commerce & finance that benefits everybody

    But if NYC mandates for example that rents cannot grow beyond x% each year, and loans to develop new properties or revamp old ones start at 2x% each year, goodbye any new rental developments, hello the goofy super luxurious condos that threaten the people such a mandate is supposed to protect.

    Regulation has to be smart... it has to protect the people, but cannot be so skewed that it makes the business of being a landlord completely unprofitable, and I don't think too many pro-renter types realize that

  • It is cumbersome that landlords must collectively argue for increases on the basis of such things as increased fuel costs. You'd think a simple index could be approved each yr, and the LL could just use it to add this cost.

    Landlords have a right to make a profit on their investments, and gain/lose from neighborhood changes. The present rules seem to encourage absenteeism from communities.

  • I think this statement is bogus, but I do think regulation is a necessary part of a system of commerce & finance that benefits everybody

    So we agree that there needs to be some amount of regulation.

    Got it.

    Regulation has to be smart... it has to protect the people, but cannot be so skewed that it makes the business of being a landlord completely unprofitable, and I don't think too many pro-renter types realize that

    Everyone understands the pitfalls of over-regulation.

    Here is the distinction you need to understand: people hesitate at the constant and predictable chorus from business interests about how even the smallest amount of regulation is going to bring about the economic apocalypse.

    (Which is ironic of course when it is actually the exact opposite which almost caused an apocalypse in 2008.)

    The bottom line is that housing costs have been outstripping lower and middle class income for decades, and are increasingly the single biggest burden on everyone except the wealthy.

    I, for one, welcome extreme caution when it comes to deregulating things like the housing or rental market.

    The middle and lower classes are struggling under rising costs of living, among the leading of which is housing costs.

  • Aren't landlords facing these same pressures?

    Why should they have to bear the brunt of this inflation?

    (are we about to be told all landlords are rich, and therefore not entitled to profits?)

    Should landlords be able to use the conditions of thier apartments to make more money?Should hard work be rewarded?

  • I am all for smart regulation- i.e., not having the credit rating agencies be paid by the banks whose securities & assets they were rating.

    But I am not for heartstring regulation... I think measures have to be taken, for example, to protect poor people from wholesale razing of their neighborhoods by developers & effective class rezoning, but poverty by its very definition is difficult, and outside of wholly subsidizing those below the poverty threshold to bring them up to median levels I am not sure what regulation can be fairly implemented to change that.

  • I think of landlords as being in a service industry, like wait staff.

    As a result, I think the venue should be able to charge more for a clean, well maintained building.By preventing this, The present system removes most incentives to provide better service and conditions.

  • Cool The Kid said:I am all for smart regulation- i.e., not having the credit rating agencies be paid by the banks whose securities & assets they were rating.

    But I am not for heartstring regulation... I think measures have to be taken, for example, to protect poor people from wholesale razing of their neighborhoods by developers & effective class rezoning, but poverty by its very definition is difficult, and outside of wholly subsidizing those below the poverty threshold to bring them up to median levels I am not sure what regulation can be fairly implemented to change that.

    There are lots & lots & lots of tools at the disposal of national, state and local govts to encourage more affordable housing for all segments of society.

    whynot_31 said:Aren't landlords facing these same pressures?

    Why should they have to bear the brunt of this inflation?

    It's not really inflation that's driving up housing costs, just like it's not inflation that's made health care costs skyrocket over the past 3 decades.

    Lower and middle class incomes haven't increased much in decades. Is that true of revenue for real estate owners? I doubt it.

    Yet housing costs continue to rise.

  • Fine, don't call it "inflation" if you don't want to.

    Um, why should landlords be the one to bear the brunt of these increased costs?

    Are we try to set how much money they should be able to make?

  • What increased costs are the landlords facing?

    More importantly:

    How has land-ownership profit (or value) looked over the past few decades?

  • Boygabriel said:What increased costs are the landlords facing?

    More importantly:

    How has land-ownership profit (or value) looked over the past few decades?

    Increased energy costs, maintenance costs, property taxes, real estate agent fees, litigation fees, etc.

    And these costs are even more prevalent when you combine NYC's super expensive base RE costs with low income tenants. Profit margins pretty much disappear w/o gov't subsidies. And even outside of the base financial challenges, in my experience they tend to bring a lot of issues that cost landlords big time. It's not as simple as you're trying to make it.

  • yup.

    Smart landlords are also aware that two things are possible:

    1. The real estate market could collapse.2. The federal and local governments aren't going to provide for their retirements.

    I know it is a crazy concept, but some of them may be actually using any profits they may be earning in this "good period" in order to save it for a rainy day.

    Shouldn't we encourage this?

  • Ehhh I don't know if policy based on the good landlords *might* be doing is policy worth exploring

    But to write the landlords off as evil oligarchs is counterproductive. Everyone at the table has to come away (and give away) something, that's the essence of compromise.

  • I hear you.

    If the landlords just want to spend the profits at the local bar, thats their prerogative.

  • as an owner in a coop building that *still* has rented apartments 25+ years after the building turned over, i am quite confident in saying that rent control/stabilization laws lower our property values. when we have to raise maintenance to a high rate to merely cover basic bills--when some tenants are paying under $200 a month for rent--it makes it harder for me to get a great price if i sell.

    i was a tenant for a LONG time, and i am all for very strong laws for renters, but there has to be a middle ground here for everyone. we landlords, in small buildings, we're bleeding $$ to keep things afloat.

  • rent regulations don't make any sense, if all supplies are regulated would make sense, but only a select, its half ass as gun control laws.

    with the current system its a fail system. either regulate them or or don't bother with any.

  • I'm not saying things are simple. Far from it. And I don't know much about the market forces of housing and real estate.

    But as a general concern, I'd like to see rising costs and profits/value all in the same context. (in addition to other economic factors like taxes, and all the other things you guys have mentioned)

    Basically my hunch is that housing costs, like most things in our country, are rising disproportionately to inflation, minimum wage, and income of non-wealthy Americans.

    It is in everyone's interests, even middle class landlords or the wealthy, for us to have a functional middle and lower class who don't get crushed by costs of living such as housing or health care.

    Cool The Kid said:I am all for smart regulation- i.e., not having the credit rating agencies be paid by the banks whose securities & assets they were rating.

    But I am not for heartstring regulation... I think measures have to be taken, for example, to protect poor people from wholesale razing of their neighborhoods by developers & effective class rezoning, but poverty by its very definition is difficult, and outside of wholly subsidizing those below the poverty threshold to bring them up to median levels I am not sure what regulation can be fairly implemented to change that.

  • The current system of rent regulation in NY benefits large landlords that invest in the luxury end of the market (they benefit from high prices) and NYS politicians that can be the providers of largesse. Everyone else loses. Tenants get stuck with overpriced substandard housing because landlords don't have to invest in improving their properties and the pro-tenant rent laws discourage investing in new housing for the bottom 50% of the market. Small landlords lose because they are obliged to renew the leases of regulated tenants even if they would prefer to empty the apartment and renovate it to improve their investment, it is also hideously expensive in time and resources to evict a tenant who is violating the lease.

    What NY needs is balance rent laws. Laws that protect both landlord and tenant, who should be seen as equal before the law, but protected from the scoundrels on both sides. There are landlords that try to gouge tenants, so tenants need to have some redress against rent increases that are above the market rate. There are tenants that decide not to pay rent or destroy their landlord's property, landlords should be able to have these tenants evicted in an expeditious manner.

    If we provide a level playing field in terms of residential tenancy laws, a broader range of people will be prepared to invest in rental housing at all levels of the market. This will have a downward pressure on rent levels, and upward pressure on the quality of housing.

    Security of tenure in rental housing is a sacred cow that has to be slaughtered if we are to make any progress. But before anyone worries that they're going to be kicked out of their house, no rational landlord throws a responsible tenant out, good clients are hard to come by. Even when a landlord wants a particular apartment back, they'll want to keep a good tenant and will offer them an apartment in another building.

  • Boygabriel said:I'm not saying things are simple. Far from it. And I don't know much about the market forces of housing and real estate.

    But as a general concern, I'd like to see rising costs and profits/value all in the same context. (in addition to other economic factors like taxes, and all the other things you guys have mentioned)

    Basically my hunch is that housing costs, like most things in our country, are rising disproportionately to inflation, minimum wage, and income of non-wealthy Americans.

    Well, not to be snarky in any capacity, but you should do some digging. Median home prices have dropped precipitously around the country, and even in NYC home prices have dropped about 10% since 2007. I distinctly remember a period of panic during which landlords were damn near giving failed condos away as rented apts with all kinds of perks, and I even managed to talk my landlord into lowering my rent when it was time to renew the lease on my CH place. So that's out.

    Plus w/o some serious (and IMO dangerous) intervention, I'm not sure how the powers that be could safely and fairly ensure all the prices of things increase in tandem. Esp w/the exponential growth of entitlement programs, and the dollar destroying games the Federal Reserve is playing. All the stimulus money everyone is begging for was generated through a subtle tax that is the reason why gas will probably hit $5/gallon per year. That's too complex an issue to even begin to pick apart, but I'll just summarize by saying w/o some really careful analysis it's a dubious request.

    Boygabriel said:

    It is in everyone's interests, even middle class landlords or the wealthy, for us to have a functional middle and lower class who don't get crushed by costs of living such as housing or health care.

    I don't think anyone has ever suggested otherwise, but when you factor all the other forces at play into the equation things get complicated. To suggest that the pricing out of the poor and middle class in NYC is due to a general lack of concern or value for them is a bit of a reach and not necessarily true. But the onus is not on the landlords, it is (or I guess was) on the city government and city planners to protect those parts of the population. It is much harder to fix now that the juggernaut has gained momentum.

  • CTK, how do you know that house prices hav dropped in NYC? I've never seen such a specific statistic for the city, and would like to see such data.

    Rent regulation in NY borders on insanity. You get situations where I may be a protected tennant, and then (illegally) sublet my apartment for far higher than I rent it for and pocket the difference. That difference in rent could be used for reinvestment, further stimulating the housing market. The market for homes in cities like Dallas remains flat (or slight growth), year in and year out (adjusted for inflation). But of course Dallas has something in abbundance which we do not: LAND. They can just keep building. Nonetheless, most rent regulation should be scrapped or just redesigned.

    Some other thoughts I have: Where are entitlements growing exponentially? That's wicked fast growth, and I'd like to sign up for such entitlements. Or do you mean that the super wealthy benefited to the tune of several trillion dollars at tax payer expense? Then I would agree. I'm not sure I'd like to be entitled and poor (or working class or middle middle class). Most others would probably agree. It's one thing that people made some bad decisions, like buying too much house, but in each individual case that person made that bad decision just once (or maybe twice, or perhaps, in extreme cases, three times). Many financial institutions made the same mistake hundreds of thousands of times (or even millions) and were ultimately rewarded. Now that's entitlement.

  • Water Ice and CTK,The folks at Furman center have been writing reports just for you.

    http://www.furmancenter.org/research/sonychan/

  • Water Ice said:

    CTK, how do you know that house prices hav dropped in NYC? I've never seen such a specific statistic for the city, and would like to see such data.


    http://www.jparsons.net/housingbubble/new_york.html


    Now obviously, this is aggregate and in no way reflects the highly granular nature of the NYC market... for example, in Rosedale (the south east corner of contiguous Queens), home values dropped by 2/3 in some cases, whereas in Manhattan it was probably more like 1/10th (if at all). Rent followed.


    Rent regulation in NY borders on insanity. You get situations where I may be a protected tennant, and then (illegally) sublet my apartment for far higher than I rent it for and pocket the difference. That difference in rent could be used for reinvestment, further stimulating the housing market. The market for homes in cities like Dallas remains flat (or slight growth), year in and year out (adjusted for inflation). But of course Dallas has something in abbundance which we do not: LAND. They can just keep building. Nonetheless, most rent regulation should be scrapped or just redesigned.

    Totally agreed.

    Some other thoughts I have: Where are entitlements growing exponentially? That's wicked fast growth, and I'd like to sign up for such entitlements. Or do you mean that the super wealthy benefited to the tune of several trillion dollars at tax payer expense? Then I would agree. I'm not sure I'd like to be entitled and poor (or working class or middle middle class). Most others would probably agree. It's one thing that people made some bad decisions, like buying too much house, but in each individual case that person made that bad decision just once (or maybe twice, or perhaps, in extreme cases, three times). Many financial institutions made the same mistake hundreds of thousands of times (or even millions) and were ultimately rewarded. Now that's entitlement.


    Well, a good place to start would be rent laws. I'm pretty sure my downstairs neighbors pay nowhere near what I pay in rent, thanks to rent protection or w/e. Somewhere between my rent and theirs lies a "true" market rate. Rent control advocates insist that the skew should be even more extreme, but to me, putting the needs of a few completely at the expense of everyone else just doesn't seem right. This problem is a symptom of a much more complex problem with a very complex (and difficult) solution that I've talked about ad nauseum elsewhere. What that has to do with the rich, I dunno, never defended rich people welfare.

  • I think the major problem with these regulations are that they require the landlord (or coop owners, as bklynpotter points out) to incur the costs.


    An additional problem is that they are based on the unit, and not the needs of the tenant occupying them.


    As a result, the stabilized tenant can become well off, yet their rent can not be raised.


    Ditto, a tenant can occupy a large apartment long after their kids move out, and that space could be better used to house a large family.


    The policies violate the "from each according to their ability, to each according to their needs" ethos.


    ....and I think that is part of the reason that the politicians are slowly letting the regulations expire.


  • whynot_31 said:


    As a result, the stabilized tenant can become well off, yet their rent can not be raised.



    What do you mean cannot be raised? Afaik even stabilized rents go up by 2-3% per year for a 1yr lease and usually 4.5% for a 2 year lease. Which admittedly is not much but it does go up.


    One of the more pernicious taxes to affect landlords is the property tax based on assessed value. Just because the building is worth more doesn't mean that one has more money to pay a tax with or that one consumes more government services. Increasing assessed values is a way of increasing taxes without enacting a tax rate increase. And it kinda sucks.


  • I was alluding to the fact the rent can not be raised in response to a tenants inrease in income.


    Yes, it can be raised if the rent control board allows ALL units to increase, but this policy is so board that many receive the benefit who do not need it.


    The present policy seems to assume that all rent controlled and stabilized tenants are in need of protection, which isn't the case in actuality.... There is no yearly income verification like there is on Sect 8


  • the apartment can be deregulated if the tenant's income is above $175,000 and the rent is over $2,000, (which means it was around $1450 ten years ago.)

    these are admittedly high bars but I would be surprised if many of the rent stabilized buildings on Prospect Park West were not close to these limits.


    To my mind that income level is way too high; knock it down and then allow it to increase yearly at an indexed rate. And the rent limit doesn't make much sense either - if the rent gets high, then it can go way higher but if the rent is low it has to stay low.


    Landlords can submit requests for income verification and you can lose your stabilization if you do not respond in time.


  • I don't know that that threshold is too high....


    Plus, a family of four might have that income, and then be subject to rent hikes that force them to move every year. I don't know that that is in the best interest of everyone.


    Maybe the answer lies in some kind of valuation program... "appropriate" rent would be calculated by the city through an algorithm based on property values, amenities, school district quality, crime stats etc. Basically not far off from how the free market prices apts... but w/various caveats setting it apart from rent control:


    - rents on apts would not be free to change when a tenant left

    - rents could go up more freely with the market (i.e. not capped at some goofily low rate like 3%)

    - rents would be lower than market rate, but not "a grandma living in the same apt since 1950" low; $500/mo for an apt ANYWHERE is low, but in NYC its a giveaway

    - system would be voluntary, of course w/some tax perks (revenue that would be lost could be gained back by the new income from tenants willing to pay market rate prices etc)


    Combine that w/some housing at those super low rates corralled off for the old folks who've stayed in those rent controlled apts and I think we begin to approach a system that works for everybody


    Though I won't lie, it does kind of stink of gentrification a bit... displacement of old folks too at that


  • Everyone dislikes displacing old people, which is probably why these regulations are being able to slowly expire.


    SCRIE also exempts them from most increases


  • How about saying rent is the lower of market rate for that apartment (as measured by comparison to similar apartments in the neighborhood) or 25% of household income (as reported on NYS income tax returns), plus anybody owning residential property in the tri-state area is ineligible for rent concessions (if you own a house you live in it not be subsidized into rent). I would also add that retirees should not be able to own property anywhere in the USA or Canada to be eligible for a subsidy - you own a condo in Florida, go live there and let a working family have that rent regulated apartment.


    I vividly recall riding the train out to the beach on Long Island last summer listening to a woman telling her companion she was on her way to her beach house, she was emphasizing the importance of keeping her legal residence at her rent regulated apartment in the city so she didn't lose it. If someone can afford a beach house on Long Island, they don't need a subsidized apartment in the city.


  • Having a body which objectively keeps up with neighbor rents sounds onerous and tedious.


  • whynot_31 said:

    Having a body which objectively keeps up with neighbor rents sounds onerous and tedious.


    It's already done, by real estate brokers, the city (there's a reporting process for regulated apartments) and you can bet if we ever moved to a free rental market, the city or state would impose a tax on leases.


  • Yes, the RE agencies currently track this (as does the Furman ctr), but the impact of the dada is not presently regulatory.


    That's when you get the potential for politics and fraud.


    Re: having a tax on leases, I wonder how much we currently spent on enforcing our present rent stabilization and rent controll regulations.


    Housing court, DHCR, HPD, etc can't be cheap.


    I'm sure REBNY could create an impact statement with represented the impact on it's members as well.


    PS the rent control board meets tomorrow for their preliminary mtg of the yr


  • There already is a tax on leases indirectly with the mortgage interest deduction (i.e., if you rent, your taxes are higher than somebody whose income and mortgage payments are similar to your income and rent). Not to mention if it's behavioral, it's a little silly... if people could buy in the city, they would; they rent cause they have no choice.


  • I disagree: Some people rent out of convenience.


    ...but I agree that most people who are currently LEGALLY in rent controlled and stabilized apartments would be unable to buy a place if they lost their apartment.


    It is unknowable, but I'd be interested in knowing where the current beneficiaries of rent regulations spend the difference in $ between market vs and their rate.


    The report in the OP argues that the population is poor, and that they are not "enjoying a great standard of life" at the expense of their landlords and fellow co-op owners ....it argues that such regulations are merely allowing the recipients to "get by and continue to live in the city".


  • I'm still waiting for an explanation of what is deemed enough help, and where the money for such help would come from.


  • Ah, entitlements.


    Regardless of whether we have a way to pay for them, we always love receiving them and passing them out to others


    At the moment, this may be the only entitlement that is not growing.


    The rule that states "once rent is $2000 a month, the unit is deregulated" has had the impact of reducing the number of units.


    At the current rate of deregulation, this entitlement/benefit could be largely a thing of the past in another 5-10 years.


    I don't see the defenders of the policies as being able to stop the trend.


    (Note: The creation of affordable housing is separate discussion, and seems to have widespread support ....largely because the programs are geared toward a specific income group, as opposed to "merely" who has lived in their apartment forever.


  • whynot_31 said:

    Ah, entitlements.


    Regardless of whether we have a way to pay for them, we always love receiving them and passing them out to others


    At the moment, this may be the only entitlement that is not growing.


    The rule that states "once rent is $2000 a month, the unit is deregulated" has had the impact of reducing the number of units.


    At the current rate of deregulation, this entitlement/benefit could be largely a thing of the past in another 5-10 years.


    I don't see the defenders of the policies as being able to stop the trend.


    (Note: The creation of affordable housing is separate discussion, and seems to have widespread support ....largely because the programs are geared toward a specific income group, as opposed to "merely" who has lived in their apartment forever.


    The $2k threshold only applies to vacated apartments. In occupied apartments the rent must reach $2k andthe occupants must have over $175,000 in house hold income (AGI) for 2 years.


  • I have never read the minutes of a Rent Guidelines Board meeting much less attended a meeting. So I have no idea what I am talking about. But I imagine that the negotiation must include at some point the assertion that the costs have gone up and that those costs must be borne by the tenants somehow, and that the landlords of controlled apartments say, “I have someone paying $200 a month. My heating bill went up so much that only a 30% increase is going to pay for it.” And that is taken into consideration. Meanwhile there are landlords who have apartments that rent for $1000 a month and they say that 5% will cover their cost increases. And the tenants speak; their earnings only went up 2% (or whatever). And this is all put in a blender and some number is arrived at. Or range of numbers. In the end no one is happy.


    But there are two winners: the landlords whose apartments rent for a high amount of money per month. Their costs went up less than the increase, because the increase was figured on the average or mean or a combination of the two. The other winners are the renters of apartments that are very low price, because the percentage increase for their apartment is low compared to the increased cost of maintaining it. Let’s assume that these are rational actors for the purposes of this exercise. Of course there are going to be tenants who have $200 apartments who complain about the increase, despite it being a great deal, and there will be landlords of high price apartments who complain that they could gain more if there were no limits at all, despite the price discount they enjoyed when they obtained the property because of its covenants.


    This has been going on a long time and things keep getting more out of balance. What I propose is that the percentage method of increases necessarily leads to a worsening of the problem. What is needed is a modification of it. If the rent increase was calculated in a slightly more complex equation this could be corrected. The formula should be rent + f (a fixed amount) OR rent * p (a percentage amount), whichever is more. This would hurt the two groups that have been gaining all these many years, and benefit everyone else. To make it even more fair, for the cheap apartments, a further factor should be the size of the apartment, since a larger apartment costs more to maintain than a small one. With s being the value of 1 for an average size apartment (in square feet), and the value of s determined by the apartments size relative to that average apartment, then the formula would be rent + f(s) OR rent * p. Perhaps a curve where values such as (e.g.) .5[rent + f(s)] plus .5[rent * p] would be acceptable as the middle value.


  • sandcastle-

    yes, such a system would make sense.

    ...but I don't think any of the current beneficiaries have an incentive to agree to such a change.


    Also, government would have to make calculations and measurements of every unit covered. Aren't there something like 300,000 units covered? Sounds like a pain.


    vidro-

    yup, this is why landlords have an incentive to pay people in apartments to leave.


    Landlord: "Grandma, can I help you move to sunny condo in sunny florida? Here's a down payment. ...and the number of a really good mover"


  • whynot_31 said:

    yes, such a system would make sense.

    ...but I don't think any of the current beneficiaries have an incentive to agree to such a change.


    Also, government would have to make calculations and measurements of every unit covered. Aren't there something like 300,000 units covered? Sounds like a pain.


    Whynot:

    You say not any beneficiaries would be in favor. Why not? (harhar)


    The percentage-based increase should be lower because it is not being pushed up by the inclusion of the low-rent apartments, which are instead increased by the arithmatical fixed amount. If the percentage increase dropped from (e.g.) 4% to 3%, a lot of tenants would be in favor of it.


    The politics: There are two classes who would be against the nuanced formula: the tenants of very low rent apartments and the landlords of very high rent apartments. There are two classes who would be for it: the landlords of very low rent apartments and the tenants of very high rent apartments. The middle-rent landlords and tenants would be relatively unaffected by the change in formula. However, because the change would *gradually* make the system more fair, and therefore be likely to continue longer, those in the middle would be for the change if they wanted the system to continue, and against the change if they wanted the system to founder in crisis sooner.


    So tell me, why do you think it would be doomed to fail from the outset?


    The s value: You think it too difficult? Why? Also, why do you assume that the government must make *any* size calculations?


    The s value could default to 1. If either party (landlord or tenant) wished to use another value to reflect the size of the apartment, they could provide that themselves for use in their contract. This is pretty fast using that laser measuring device that most contractors have. You’ve seen those things, right? A whole apartment can be measured to easily within 100 square feet accuracy in 5 or 10 minutes. Maybe the market price for this service would be $50, which would be the point at which one of them would find it worthwhile. OK maybe government would have to step in IF the parties cannot agree on the size. It would be arbitrated. Loser pays, or bill split if reasonably close. To prevent cheating, if any contractor was found cheating on the measurements, they would be fined. A figure only needs to be established once. Not that big of a deal, really, when hundreds OR thousands of rent dollars are at stake.


  • Contractors consistently use measuring tapes correctly, but landlords and real estate agents always seem to have trouble.


    Their calculations of sq ft are always much higher than mine.


    But overall, I like your proposal.


    ...but continue to question whether HCR and HPD is up to the task.


  • The gov't... shit, some kid off the street could easily put together a little program that could calculate a "fair market value" for a rental, based on all the things people take into account when they choose a place to live. The real challanges lie in creating enticing but sensible incentives to get landlords to play along, and how to deal w/the old people in $400/mo rent controlled apartments in TriBeCa (best bet is to just wait it out w/them).


  • Is it just me, or do you guys perceive the "pro-rent law people" as being more quiet and disorganized than in years past?


    With only two weeks to go, I haven't seen the number of editorials in the news that I usually see.


    ...I've only heard of a few rallys.


    Rally this Sunday to Demand Stronger Rent Laws

    From: NYS Senator Tom Duane [mailto:webmaster@tomduane. com]


    New York State Senator Tom Duane


    Dear Friend,


    New York's rent laws expire in less than two weeks, on June 15th! Rent

    regulated tenants and their advocates must make it clear that we need these laws renewed and strengthened to protect our homes and our city. Landlords and State Senate Republicans are working to weaken these laws even further, opening the door to more unfair rent increases and evictions.


    This Sunday, please join me as well as other state and city legislators,

    tenants, clergy, and labor leaders in a rally to demand stronger rent laws!


    RALLY FOR STRONGER RENT LAWS


    Sunday, June 5, 2011 at 2:30pm

    First Corinthian Baptist Church

    Adam Clayton Powell Boulevard (7th Avenue) at 116th St.


    Sponsored by:

    The NYS Black, Puerto Rican, Hispanic & Asian Legislative Caucus,

    Pastor Michael A. Walrond, Jr., the Working Families Party, and the Real

    Rent Reform Campaign


    The home you save may be your own - Come to the rally to learn what you can do!


    PLEASE RSVP TO MY OFFICE: duane@nysenate. gov or 212-633-8052.


    FOR MORE INFORMATION: www.RealRentReform. blogspot. com/212-608- 4320

    ext. 316/ RealRentReform@ gmail.com


    Sincerely,


    Thomas K. Duane

    New York State Senator

    29th District


    There is always a surge of rhetoric from both sides right before the hearing, but this year isn't looking promising for those who like to see newscasts that feature screaming people getting arrested.


  • State Lawmakers Argue Over Rent Laws as Deadline Looms

    By THOMAS KAPLAN 6/14/11 NYT


    ALBANY — Rent regulations that limit how much landlords can charge for more than one million apartments in New York City and its suburbs are set to expire at the end of Wednesday, and lawmakers on Tuesday were still debating whether to simply renew them or to make changes sought by tenant advocates.


    State Senators John L. Sampson, left, and Adriano Espaillat say rent regulations must be strengthened, not just extended.


    Democrats in the Legislature, along with Gov. Andrew M. Cuomo and the tenant advocates, are pushing to extend and strengthen the regulations in an effort to slow the pace at which rent-stabilized apartments are converted into market-rate homes. But Republicans, who hold a slim majority in the State Senate, have shown no interest in bolstering rent regulations, which landlords and developers often criticize as being unfair to property owners.


    Among lawmakers, there was little doubt that a continuation of the regulations would be approved by the scheduled end of the legislative session on Monday. But recent days have brought frenetic lobbying on both sides, as the details of the extension hang in the balance.


    “I just want to put it succinctly: an extension is not enough,” the Senate Democratic leader, John L. Sampson of Brooklyn, said Tuesday while standing amid a throng of tenant advocates. “We cannot vote for anything that does not strengthen the rent regulation laws, and we need everyone to understand that.”


    Mr. Cuomo, a Democrat and former federal housing secretary, held a strategy session with lawmakers on Tuesday in which he promised to pressure Senate Republicans to agree to something more than a simple extension of the current rent laws. But it appeared as if rent regulations would be among the final issues to be dealt with before lawmakers left Albany.


    “I think it has been a lot of posturing,” said Michael McKee, the treasurer of the Tenants Political Action Committee, an advocacy group. He added: “I brought nine days’ worth of socks and underwear. We’re going to be here until the end.”


    Competing bills in the Senate and the Assembly, which is controlled by the Democrats, reflect serious partisan differences over how to extend the rent laws.


    The Assembly proposal, approved in April, would eliminate vacancy decontrol, which allows landlords to deregulate apartments when they become vacant and their rent passes $2,000. It would also tighten the criteria for so-called luxury decontrol, which allows landlords to deregulate apartments when tenants’ income exceeds $175,000 for two consecutive years and the rent is at least $2,000. The Assembly bill would change the luxury decontrol limits to $300,000 in income and $3,000 in rent.


    Some representatives of the real-estate industry have expressed openness to raising the dollar limits for deregulating apartments, though not by nearly as much as the Assembly is seeking, according to people involved in the negotiations. But landlords have refused to consider ending vacancy decontrol altogether, these people said.


    The debate has intensified this week. Tenant advocates demonstrated at the Capitol on Monday, and two Democrats — Senator Bill Perkins of Manhattan and Assemblyman José Rivera of the Bronx — were among a group arrested for civil disobedience for sitting in front of the entrance to Mr. Cuomo’s office.


    On Tuesday, though, tenant advocates tried to allay concern about the impending expiration of the rent laws. They said renters would not be harmed if the laws were to expire for a few days, as was the case during similar negotiations in 1997, because residents would still be protected for the duration of their leases. Tenants whose leases expire in the next few days should already have been offered renewals under the current rent regulations.


    Senate Republicans have proposed a temporary extension of the current laws through Friday. The last time rent laws were set to expire, in 2003, the Senate approved legislation to extend but weaken the laws and then immediately adjourned for the year. Assembly Democrats had little choice but to approve the same legislation, lest they lose rent protections altogether.


    Lawmakers accused Republicans of trying the same move this year. “This is an end-around to try to skip town,” said Senator Adriano Espaillat of Manhattan, the senior Democrat on the Senate housing committee. “We’ve seen it before. We’re not going to be fooled by it. We know what it is. It’s a cheap trick.”


    Senate Republicans denied stalling as a form of gamesmanship but said they did not wish to vote on rent regulations until the Assembly speaker, Sheldon Silver, a Manhattan Democrat, agreed to hold a vote on capping local property taxes.


    “If the speaker refuses to act on a consensus bill, he could jeopardize affordable housing for more than a million people, including some of his own constituents,” said Scott Reif, a spokesman for the Senate majority leader, Dean G. Skelos, a Long Island Republican.


    A possible compromise could tie a rent-stabilization bill to other real-estate legislation being sought by developers and landlords, including the extension of a tax break for certain new residential buildings, known as the 421-a program. In addition, the real estate industry is seeking a so-called legislative solution to resolve a 2009 court ruling that said the owners of the Stuyvesant Town and Peter Cooper Village complexes in Manhattan had improperly deregulated thousands of apartments while taking special tax benefits from the city.


    Democratic lawmakers said they were open to extending the tax credit for developers as part of an agreement on rent regulations, but not to approving legislation relating to the Stuyvesant/Cooper court ruling. “For me and for many others, that is something that would be completely unacceptable,” said Assemblyman Brian P. Kavanagh, a Manhattan Democrat.


  • As expected, they passed an extension and enacted some minor changes.


    Surprise, surprise neither side is satisfied with the bill. [When both sides thing a piece of legislation is dumb, that means it is good legislation, right?]


  • We now return to critiques of the current system. This one is from the right...


    source: http://www.city-journal.org/2011/eon0621hh.html


    Howard Husock

    Three Bedrooms, One Tenant

    New York confronts underoccupancy in subsidized housing.

    21 June 2011


    It’s a familiar scenario for those whose children have grown up and left home: a house or apartment, once the right size for a family of four or five, becomes more than a middle-aged parent or parents need. The cost, whether it’s in property taxes or rent, doesn’t seem worth it any more. And so a household makes the hard decision to downsize, perhaps moving to another neighborhood or even another part of the country to save money. This process doesn’t just help families adapt to changing life circumstances; it keeps cities dynamic, as the aging make way for ambitious newcomers.


    Things are dramatically different, however, in public housing, especially in New York. In Gotham’s projects, either tenants pay a percentage of their income in rent, or else their apartments have fixed rent ceilings. Property taxes and utility bills may rise for others, but not for them. So it is that one person may inhabit a three-bedroom apartment with no incentive to leave. The New York City Housing Authority (NYCHA) estimates that 40,000 units in its 180,000-unit system (the nation’s largest) are “underoccupied,” with one or more empty bedrooms. Meanwhile, 144,000 families, mostly single parents with young kids, languish on the waiting list for an apartment.


    NYCHA recently announced that it will start taking steps toward moving some of the overhoused out of their apartments. “It’s a constrained resource,” says NYCHA chair John Rhea. “Resources should be scaled to the need.” It’s Rhea’s hope to make more of these apartments available to those who truly need them, such as “the hard-working immigrant with a family of four, struggling to make ends meet.” Rhea deserves applause for confronting the issue, but NYCHA has instead been attacked in some quarters. TAKE THAT, GRANDMA: CITY HOUSING AUTHORITY TARGETING TENANTS WITH MORE SPACE THAN THEY NEED, declared the Daily News.


    It will be a major management challenge to “create mobility for people,” as Rhea delicately puts it. Rhea, who brings a sterling business-management background to his post, must deal with the fact that NYCHA has limited leverage over those thousands who prefer to stay put. It’s understandable why some don’t wish to leave; after all, they won’t save any money in rent by moving to a smaller place. So NYCHA is forced to consider either building more one-bedroom units for overhoused residents—a difficult prospect for an agency already facing a steep structural budget deficit—or dangling a housing voucher to allow them to move to one of the city’s 100,000-plus voucher-paid units (for which there is also a long waiting list).


    Rhea concedes that NYCHA will ultimately need to wield some sort of “stick” to force tenants to move, which is bound to set off a public backlash. He promises “to be very transparent, to provide appropriate notice,” and other steps designed to soften the blow. But coming up with a way to do it won’t be easy. The U.S. Department of Housing and Urban Development rules currently prohibit the most obvious solution: paying tenants to relocate. “We are not going to put money in their pocket,” says Rhea, and he has no cash to spare even if the rules permitted it. If HUD could be convinced to allow NYCHA to make such relocation payments, however, one way to raise the needed funds would be to start selling off some of the many high-value properties that NYCHA owns in lower Manhattan and on the Brooklyn waterfront. Such sales would net hundreds of millions, which could be used for both relocation expenses and the huge maintenance backlog that plagues the aging public-housing system. Adopting a time limit on new tenancies, similar to the five-year limit on public cash assistance, is another approach that could work.


    The city’s addiction to “affordable housing” extends beyond its projects. New York’s 1 million–plus rent-stabilized apartments are also plagued by underoccupancy, and for the same reason: tenants have no incentive to make normal life-cycle transitions. Generations of public officials cannot seem to accept this truth. State Comptroller Thomas DiNapoli, for instance, has found that 64 percent of the city’s 2.1 million rental apartments enjoy protection from market forces—but like so many before him, he sees this as a good thing. He concludes that “rent regulations keep the price tag of living in New York within reach for millions of working men and women. That’s good for the city and the city’s economy.”


    DiNapoli has things exactly backward. So-called affordable housing leads to inefficient use, to shortages, and to waiting lists. Building more and more subsidized units is not the answer. It is far better to free tenants from the false benefits of a dependency that shelters them from choice and change. For any city that hopes to remain vigorous, housing must be free to change hands. Only that way can we make room for those, rich and poor, who will build the city anew.


    Howard Husock, a contributing editor of City Journal, is the Manhattan Institute’s vice president for policy research and the author of America’s Trillion-Dollar Housing Mistake.


  • Usually I think the rent increases are too low (and I'm not a landlord or one who lives in a rent controlled/stabilized building) but 5 and 6% seems to be quite high. The owners must be thrilled. The tenants...not so much.


  • Both sides are complaining, so it must be a good ruling.


  • This year, the mayoral candidates who are less dependent upon the support of property owners are not hesitating to take pro-tenant positions:

    http://www.nytimes.com/2013/06/14/nyregion/at-hearing-quinn-and-de-blasio-advocate-rent-freeze.html?ref=nyregion&_r=2&


  • It's good that the current administration has done much of the dirty work for the next one. Bloomberg has taken the heat for the increase in transit fares, the increase in rents and various other city maladies. Those are usually the biggies. The next mayor should have it easy for at least a year.


  • I disagree.

    The next mayor has to deal with all of the unions who have been working without contracts for years.


  • In san francisco the rent laws are stricter then here in NY. In response the frustrated landlords have decided to leave their apartments vacant in protest. This led to a decrease in available housing and 1 bedroom apartments went up from $2764 to $3500 in a very short period of time.

    NY landlords will take the same cue if pushed to the limits.

    http://www.nytimes.com/2013/06/07/opinion/king-of-my-castle-yeah-right.html?_r=1&

    Landlords must charge higher rents for new tenants to compensate for the little old lady living in a 3 bedroom apartment by herself for $213.45 per month.

    If rent stabilization would disappear then rents will go down across the board (ofcourse not for the little old lady paying $213.45). This will be so because a lot more apartments will become available and demand will come down.........just like it did in 2009 when vacancy rate in NY was the highest its been in years.

    ........just my 2 cents worth.


  • The above mayoral candidates do seem to be promising far more than they can deliver.

    It reminds me of elementary school, when the candidates for class president promised less homework and more holidays.

    Ah, populism.


  • The 2013 results are in!

    Mayoral candidate grandstanding: check

    Compromise between opposing forces, resulting in something neither extreme likes: check

    http://ny.curbed.com/archives/2013/06/21/board_sets_annual_rent_increases_higher_than_last_years.php#more


  • .....AND THE WINNER IS: *nobody*


  • See you next year, everyone!


  • The time for the yearly battle is arriving....

    Will DeBlasio be successful in freezing rents (aka not providing landlords with a COLA) at the March 27th mtg?

    http://www.nytimes.com/2014/03/10/nyregion/renters-hope-for-promised-freeze-as-de-blasio-prepares-to-fill-guidelines-board.html?ref=nyregion&_r=1
  • The advocates for the tenants in rent stabilized apartments are demanding that they be subject to zero increases, despite being in apartments that many would pay much more to live in:

    http://www.realrentreform.org/2014/03/march-27-at-9-am-rent-freeze-rally-at.html?utm_source=March+#3+Eblast+2014&utm_campaign=Mar+#3+Eblast+2014&utm_medium=email&m=1
  • The Crown Heights Tenants Union is arguing for a five year rent freeze, among other demands, such as being able to pass down leases to children/successors. Any chance of success?
  • The rent freeze isn't going to happen.

    If they are listed on the lease and are family members, family members can presently lease the apartment if it has been their primary residence. This provision will not be watered down.
  • While the advocates for a rent freeze have good motivations, I fear they fail to understand that at present the supply of rent stabilized housing is shrinking despite previous rent increases: 

    http://furmancenter.org/files/publications/HVS_Rent_Stabilization_fact_sheet_FINAL_4.pdf

    Freezing rents would make the $ difference between the rents landlords are able to collect under the program vs market even greater, thus encouraging them to take steps (legal and illegal...) to get their apartments out of the program.



  • Thanks for posting this article.
  • I remain concerned that a rent freeze would cause LLs to engage in practices (both legal and illegal) to escape rent stabilization.

    These unintended effects may be so large that the Tenant Advocates lose more than they gain.
  • If the mayor wants a rent freeze then he should freeze taxes and especially water and sewer rates that are going crazy. But that won't happen. I'm not pro or anti landlord but DiBlasio is sounding sillier and sillier with each passing day. And putting affordable housing into each building is not going to rid NYC of income inequality. The only way to do that is to get educated and get a job. Government handouts will never be enough to put everyone in the middle class.
  • I fear that a rent freeze would not be enforceable, because HPD and HCR don't not have the resources to police the transactions.

    I also suspect that the practice of "yes, I will rent it to you at the rent established by HCR, but you must have excellent credit, and pay a $3000 Broker fee" will become even more widespread if enforcement is stepped up.

    Such practices effectively negate the outcomes many want to see from Rent Stabilization and DeBlasio:    A city in which people pay less than half of their income in rent, and is filled with people of a variety of social classes, hues, nationalities, etc.

     
  • There are tons of folks who are educated with tons of loans, who look high and low, and are unable to find a job. Much of what comes into this is the cultural capital a person has ie connections.

    An article was posted of a 25 year old woman in Crown Heights who bought an apartment. I bet she didn't do that on her own. Her folks (who had the financial capital) probably helped her.

    Many folks seeking affordable housing do not have family with the capital, monetarily or family background. This may be what is contributing the widening gaps, income, housing, educational, etc. Or America is simply becoming more and more of a oligarchy.

  • Is this the woman you are thinking of?


    ....regardless of whether you are thinking her, I agree with everything you wrote.
  • Yup, that is the lady I mentioned. NYC is an interesting city with all that it has to deal with. Public schools being "integrated" (another great debate) and all the other things. Chicago is another city with its own share of issues (lived there for seven years).

    Another thing to consider is the long-term impact of loans on a family, just not the parents, but future generations. School loans impact the cultural-capital parents can pass on to kids. The loan system here in the US is going to have some interesting long-term ramifications.
  • Do you think NYC property owners can be forced to remedy these issues?

    I believe that they will do anything (and everything) possible to get as close to possible to "full value"; the price that would be set by the intersection of supply and demand.

    ....Because I would do the same thing.
  • The US is a free market, from environment to housing. So, nope. I don't think anything can be forced. De Blasio can try, but good luck with that. I have lived in Latin America and Africa, enforcing anything is always a challenge, no matter what the country. Perhaps it simply boils down to human nature to want the "full value." Those that go against this policy might would be ridiculed, at least politely by others. And who wants to be the laughing stock?
  • The point is, landlords cannot be the only ones to shoulder the burden because if they have to take out loans, they have to have the means to pay them back. Rents are the way they do that. No one in their right mind would buy a building to lose money or just break even.
  • DeBlasio is certainly getting his butt kicked a lot during his first 6 months in office.

    1. Cuomo kicked it re: his pledge to stop Charter Schools.

    2. Cuomo, NYS DOH and SUNY are kicking it re: his pledge to keep LICH a full size hospital. 

    He now has his butt hanging out re: 

     3. Vision Zero and East River Tolls 

     4. Stopping Gentrification and Housing Cost Increases

    I give him better odds on item 3 than item 4.
  • I hope he also fails on 5. getting rid of the carriage horses.  Anyone who believes these horses are going to go to some happy farm with green grasses doesn't know enough about actual horse farms and horse rescues.  
  • I don't think he wants to stop gentrification. I just think he wants all apartments rent controlled so anyone can afford to live in them. But until the city can afford to stop devising ways to tax people it's not going to happen.
  • In theory, it could tax corporations more and people less.    

    I'm not sure which is more likely, ^that^ or repealing the one law that always gets in the way:

    The law of supply and demand.



     
  • This is where it gets really fraught ....when the landlords create amenities for the newly un-stabilized apartments or the tenants that are part of the "80" of 80/20 buildings:

  • This development is huge:


    And (by giving the landlords the increases), it shows that the state understands that placing a cap on the rents received by landlords only leads to displacement and neglect.

    ....someone has to pay to keep older, poor people in their homes.   The state has just stepped forward and admitted that they can not expect landlords to carry additional burdens, and stated that they will.


  • The circus has reached a decision:

    The amount of the increase for 1 and 2 year leases is respectively 1% and 2.75%.    

    http://newyork.cbslocal.com/2014/06/23/nycs-rent-guidelines-board-to-vote-on-rent-freeze/ 

    See everyone next year!
  • And how does de Blasio feel about this?  Is he going to construe this as a win as well?
  • We will hear the spin in tomorrow's news.    However, being that he ran on a ZERO percent increase, this adds credence to those who believed he was over promising (ie pandering) on this issue in order to get elected.   

    It was successful pandering, but pandering nonetheless.

    Other issues included:

    1.    LICH staying a hospital (it had no chance of remaining a hospital, but earned him the endorsement of the the health care unions).

    2.    Stopping the expansion of charter schools (Ditto, no chance in the present climate, but earned him the endorsement of the teachers).

  • Add universal pre-k.
  • If I signed a two year lease last year, meaning I won't receive a lease renewal this year, am I s**t out of luck on the 1 and 2.75% increase this year? I feel like I already know the answer but putting it out there.
  • Do we think that next year the raise is going to be much higher to compensate for this year?  As long as my landlord keeps following the directive I'll have to decide whether to sign a 1 or 2 year.  Just the 1% would be practically nothing, and we could really use that chance to catch our breath.  But if they vote in a 4% or higher for the following year, I'm really going to regret signing a 2 year lease.  It's all so nerve wracking.

    Sorry you miss out epiclylaterd.  It's something I worry about at every resigning time.  That and the chance of my landlord getting rid of our preferential rate and raising it to the legal rate, about $350 more.
  • DeBlasio is annoyed.

    As a result of appointing 5 of the 9 RGB members, he thought he'd be able to get a rent increase freeze:

    http://www.crainsnewyork.com/article/20140624/BLOGS04/140629928/de-blasio-disagrees-with-rent-increase

    If he fills the board with his folks, you may get a zero increase next year.

    ...will his power diminish or increase over the length of his term(s)?
  • Anybody who actually thought that there would be no increase either isn't too bright or believes in miracles. Just like anyone else, a landlord is entitled to make some money on their apartments. Otherwise why incur the bother and the risk.
  • If "my" costs go up and I can't increase prices, I am going to reduce costs (ie less maintenance).

    A tenant's value to me is relative to what other tenants will pay me.
  • I would welcome less heat my apartment all winter actually, especially if it meant my rent stayed and went down.  So often I watch the heat go out the window all day so we don't broil.
  • Although I'm not an expert in HVAC, I suspect that your apartment is overheated because it is cheaper in the short term to do so.   

    Installing the controls and systems required to cost efficiently and comfortably heat your apartment may require a substantial investment, and (because it is overheated, as opposed to under heated) the landlord's failure to make this investment is unlikely to result in a citation from DOB.    

    As a result, your LL may have decided that it will take too long to recoup such costs, and that they are best paid for by the next owner, when they do a Major Capital Improvement.

    The MCI will be recouped from the tenants.

     

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