Coming this June: The battle over the expiring Rent Stabilization laws - Brooklynian

Coming this June: The battle over the expiring Rent Stabilization laws

edited January 2015 in Brooklyn and Beyond
The views of those in support of renewing the regulations:

In print:
http://metcouncilonhousing.org/news_and_issues/tenant_newspaper/2014/july/rent_laws_expire_in_11_months_tenants_must_prepare_now_for_the

In person:
image

However, some don't think the stakes are that high:

"One school of thought among political insiders is that, for all the dramatic talk, little is going to change in June—that a closely divided upper chamber is unlikely to deliver big wins for either tenants or landlords. In light of Republicans gaining an outright majority in the Senate, Manhattan Borough President Gale Brewer told City & State in an interview at SOMOS, “We all hope to have vacancy decontrol done away with.” But she adds: “I am realistic. I think we are just going to be able to get a continuation of the current rent regulations—let’s hope to God we get that—over a million units are at stake.”

http://www.cityandstateny.com/2/83/infrastructure/high-stakes.html

I tend to believe that the rules will largely remain in place, and that we will continue to gradually see more units become market rate.

Comments

  • I think they might even become more tenant oriented if the price of fuel stays low as renewal leases will possibly be at a lower percentage. I figure the cost of heating will be down about 20% this year, maybe more and that will result in lower costs. I don't know if the landlords were allowed to add a fuel surcharge to the rents but if they were I'm sure that will be gone.
  • edited January 2015
    The drama in June won't be so much over how much rent can be increased, as to actual expiration of the rent laws.

    As the laws are currently written, the overall housing stock is becoming market rate in a gradual manner.

    While this upsets the tenant advocates, it sure beats the worst case scenario: Regulations being able to expire and have the remaining RS housing go market all at once.

    Given the present climate, I see them as being slowly phased out over the next ten years.

    Related reading: http://gothamgazette.com/index.php/government/5501-de-blasio-faces-uphill-trip-to-albany
  • There's going to be a lot of people trying to get into NYC Housing if rent restrictions are phased out. I can see the city doing it only as a way to make more money because I suspect if the landlords are charging market rate for all their apartments real estate taxes will go up proportionately as the value of the properties increase.
  • edited January 2015
    While the city routinely reassesses properties, it has not kept up with their escalating values. If it were to attempt same, it would effectively price out people who are presently house rich, but cash poor. At present, the city has been making enough money thru transfer taxes.

    In terms of going to NYCHA, the working class can try to get in, but they don't stand much of a chance as long as NYC needs NYCHA as a lower price alternative for families who would otherwise be in shelters.


  • When I was a kid I had lots of friends who lived in the "projects" aka NYCH. I thought they were so lucky and it seemed like it was the place to be. Funny thing was, I guess back in the 60s the city was trying to fill up these apartments because all of them came from higher middle income families whose parents were teachers, accountants and the like. I guess the city finally realized that affordable housing was for those that least could afford it and that's the way it should be.
  • edited January 2015
    NYCHA, or Mitchell-Lama or limited-equity coops? The Mitchell-Lama stuff and the limited equity coops generally seem pretty nice. But most of the owners there have taken their money & run, rather than passing the same opportunities on to future generations.

    '“People of modest means now have an asset worth hundreds of thousands of dollars,” said Wallace Dimson, 68, the president of the Southbridge Towers co-op board.'
    or, "Fuck you, I got mine!" Dude is literally every Republican's stereotype of a government benefit moocher. The government built him a nice apartment, and rather than using that good deal to allow him to save for retirement and eventually pass on his apartment to someone who needs it, he's selling it for a huge amount of money.
  • Nope...these were the Glenwood Houses, Sheepshead Bay houses and Bayview in Canarsie. But when these places were filling up the community rooms and the fact that utilities are included in the rent made them a great deal.
  • I fear this thread has merged rent stabilization with types of affordable housing, in a way that will prevent seperation.
  • edited June 2015
    We now return to the battle that was promised in June.

    It is June.

    Here's what the pro tenant forces are up to: http://gothamist.com/2015/06/03/rent_reform_protest_arrests.php

    Those who support the rights of property owners tend not to be as noisy. They speak with their wallet.
  • When the city determines how much property tax a landlord pays, they look at 2 variables. 1. How much the property is worth and 2. How much rent it collects. Property owners that own buildings with 10 or more apartments must disclose the rent roll. If the rent roll is low (due to rent control), so are the taxes owed to the city.

    That said....I also believe that in the not so distant future the city will rid of all forms of rent control to increase tax revenue. As it currently stands, the city has no vested interest in seeing housing depressed.

    The only change I see that might go toward the tenants is an increase from $2500 to $3000 before an apartment could be taken off regulation.

    As previously mentioned, landlords are quite going into this decision and vote with their wallets.

    I am a landlord
  • Yes, it seems to be a certainty the RS rules will be renewed with minor adjustments.

    As a result, the trend will continue: Fewer RS units will be significantly below market rate.

    I can't see the state being willing to devote the resources required to enforce (much less lose the tax revenue) that would stem from maintaining/passing a stricter version of the regulations.

  • What is the current RS cap? My landlord is taking spacious (800 sq) one bedrooms, and chopping them into two bedrooms. He's charging $2,499 for these. I know these units were RS. How is it even possible for him to turn a RS one bedroom into a two bedroom?
  • The present cap is $2500. So, once the Max Legal Rent on file with NYS HCR exceeds that, they can go market unless he has accepted some kind of legal obligation like atax credit.

    He can legally convert a 1 br into a 2 br and then charge up more, especially if the Max Legal Rent on the 1 Br wasn't being charged as a result of a Preferential Rent.
  • When the city determines how much property tax a landlord pays, they look at 2 variables. 1. How much the property is worth and 2. How much rent it collects. Property owners that own buildings with 10 or more apartments must disclose the rent roll. If the rent roll is low (due to rent control), so are the taxes owed to the city.

    That said....I also believe that in the not so distant future the city will rid of all forms of rent control to increase tax revenue. As it currently stands, the city has no vested interest in seeing housing depressed.

    The only change I see that might go toward the tenants is an increase from $2500 to $3000 before an apartment could be taken off regulation.

    As previously mentioned, landlords are quite going into this decision and vote with their wallets.

    I am a landlord
    I can live with an increase of the cap from $2500 to $3000. Hopefully it will buy time some people (like me) of modest income to figure something out. 
  • What makes me smirk is the people who believe that the number of units that remain under RS is a valid way to measure affordability.

    They seem to not comprehend $2499 a month is a ton of money to a household earning less than $80k. ...and having to have roommates to pay the rent when you are over 30, is a lot less fun.
  • edited June 2015
    Yes, it seems to be a certainty the RS rules will be renewed with minor adjustments.

    As a result, the trend will continue: Fewer RS units will be significantly below market rate.

    I can't see the state being willing to devote the resources required to enforce (much less lose the tax revenue) that would stem from maintaining/passing a stricter version of the regulations.

    The minor adjustment involves increasing the cap to $2700, from $2500. Not only that, we won't have the renewal debate again for 4 years.

    Instead, we will just have the annual Rent Guidelines Board drama.

    http://www.nydailynews.com/news/politics/rent-regulation-laws-extended-4-years-deal-article-1.2268177

    The Working Families Party was in favor of stronger RS rules, and released this statement in response: http://workingfamilies.org/2015/06/wfps-statement-agreement-ny-rent-laws/
  • The final version of the bill includes a graduated vacancy bonus, as opposed to a landlord always being eligible for 20%.

    http://www.citylandnyc.org/state-legislature-extends-rent-regulation-421-a/

    That might slow down some of the churning.
  • I walked in on a meeting that a non-profit agency that is a resource for tenants had called for tenants in the lobby. (This was within a week or two after this set of rent regulations was renewed.) The expression of frustration by some tenants over some legitimate issues (like why does the installation of an intercom that doesn't work properly qualify as an MCI) threatened to derail the meeting. The person running the meeting said they wanted changes to the MCI policy for this set of negotiations (i.e. make charges as a result of MCIs temporary), but those were not passed. So, the tenants should direct their anger to those with links to Albany - namely their state rep, whose office was nearby.

    I'd like to think that the rep in question probably did everything he could in his power to advocate for his constituents, but we all saw how things went down. 
  • My impression of Albany is that they are not going to strengthen rent regulations anytime soon.

    And, that investors from around the world are going to continue to buy rental buildings in NYC because they remain profitable relative to other investments.

    So, lots of money is going to continue to pour into buildings with the expectation that there will be an ROI.

    Owners are going to do whatever is necessary to make it happen.
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