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For landlords it is a mixed bag; good news is profits are up slightly, bad news is their costs are also up at a greater percentage than profit.
OTOH a good number (and growing) of RS tenants are paying at or over thirty percent of total household income towards rent. More interesting (at least to the usual suspects for affordable housing), is that a growing number of landlords cannot get tenants who can pay the legal rent. In short the rent be too high! *LOL* With noises in Albany threatening to close the preferential rent "loophole" guess LLs have taken that off the table.
Over next several weeks there will be more public meetings and so forth before a vote on rent increases in June. Eyes are on Albany who must also renew RS laws by that time and with liberal/progressive/left democrats in charge many are wanting major pro tenant protections.
They need to get rid of MCI (especially when it can be retroactive!) when they pass the rent increases this year. Rent is simply becoming too high and newer tenants will move around/shop around for lower rent when they can.
They need to get rid of MCI (especially when it can be retroactive!) when they pass the rent increases this year. Rent is simply becoming too high and newer tenants will move around/shop around for lower rent when they can.
Without MCI landlords will go back to doing what they did before; not putting money into their buildings and the city will look like it did through the 1980's. At least for buildings with majority of RS tenants.
As it stands now some LLs don't bother with MCI unless their back is up against the wall (boiler needs to be replaced, or whatever). They also don't put money into individual apartments unless current tenant agrees to the increases. Best some will do is painting (when requested), and fix leaks/other general maintenance.
Even with painting several friends who live in RS units have just given up asking. Their landlords use the most weak a$$ed cheapest "immigrant" contractor who not only isn't reliable, but does really bad work. They don't want to stay home for missed appointments, and when guy finally does show up is workers are a bunch of eegits off the street or from whatever that do the worst work, use cheapest paint/supplies and never clean-up after themselves.
Only people I know who insist on that paint job every three years or whatever are elderly/seniors living in RS units and paying < $1000k (sometimes much less) per month.
They need to get rid of MCI (especially when it can be retroactive!) when they pass the rent increases this year. Rent is simply becoming too high and newer tenants will move around/shop around for lower rent when they can.
they can't get rid of them being retroactive ... it can take more than a year for mci increases to be approved after the work is completed so it is rare that you don't get a retro bill since the mci increase is for past work the year before by the time you get it . we just got hit with 500 bucks retro plus the increase going forward .
IMHO MCI isn't the real issue; but rather unless one nabbed a "low, low" income "affordable" apartment, somewhere between 70 and death, and has lived in a RS unit since God made dirt and spit; your legal RS rent is likely > $1000k.
This is important because even a one percent increase means ten dollars more per month, and $120 for year. Each hundred above one thousand raises that number. Meanwhile not everyone is getting wage increases that match rising COL.
Despite what Bill de Boob, that come kind of housing commissioner (past and new), along with other usual suspects argue, RS was never meant to be "low income/affordable housing" per se. There isn't any legal income qualifications (outside those lottery apartments) to getting a RS unit; and what does exist are put in place by LLs as part of the vetting process.
Years ago (late as the good part of the 1990's) if you couldn't afford rent at current place you simply moved. Nearly everything was RS back then so was more a matter of finding something you could afford versus it having to be under rent control.
People don't move today because while they *might* find something slightly cheaper, it usually won't be RS. This means all those protections including increases decided by the city and not LL won't be there, so people will not or cannot move.
These people are dreaming if they think RGB is going to vote another freeze. De Boob made is point and they gave out two (after first they had to do another to make things fair for those who lost out first time around), but that was that. It won't likely happen again anytime soon.
Best people can hope for out of remaining BdeB's term is a series of increases between one and three percent. This especially since the great recession has long been over, and the economy is strong.
Unemployment is at record lows, and on top of that NYC/NYS forced a raise in minimum wage though, so in theory people should be earning more.
rent stabilization was never meant to provide any kind of affordable or low income housing ... it was simply to prevent rent gouging by landlords but it was supposed to provide "market " rents in theory .
it is very building specific .. the building we live in in queens , even after my wife is here 40 years is pretty close to market ..there have been so many mci's over the years , including tennis courts and pool put in . on the other hand the original tenants in the apartments we own in manhattan are pretty far below market but are still more then 2k a month ..
rent stabilization was never meant to provide any kind of affordable or low income housing ... it was simply to prevent rent gouging by landlords but it was supposed to provide "market " rents in theory .
it is very building specific .. the building we live in in queens , even after my wife is here 40 years is pretty close to market ..there have been so many mci's over the years , including tennis courts and pool put in . on the other hand the original tenants in the apartments we own in manhattan are pretty far below market but are still more then 2k a month ..
No, it wasn't; but as have stated, and you can tell from OP links and elsewhere (including court rulings) RS has become a de facto "affordable housing" scheme.
There are persons paying RS rents of > $2500 and more to come as various "affordable" housing lottery units are built. Those and or various units that are RS thanks to tax treatments.
Anyone who can afford two and one half large per month does not need subsidized housing IMHO. Yet that is exactly what they are getting.
Rs became. a political pawn for many years and rents were held artificially low since most of nyc were renters and it got votes ..
But rs was never devised as some kind of affordable housing .. it was only promoted as only to prevent rent gouging..
There are no income requirements unless income is over 200k for 2 years and then it is only if the apartment is over 2500 a month ...there are no asset limits at all..half of all rentals in nyc are stabilized under various programs ..
Affordable housing projects have income restrictions , rs does not.. the original premise of rs had nothing to do with the tenant , it was strictly for the landlords . We have 55,000 multi family apartment buildings in nyc that fall under stabilization
Rs become a political pawn for many years and rents were held artificially low since most of nyc were renters and it got votes ..
But rs was never devised as some kind of affordable housing .. it was only promoted as only to prevent rent gouging
Yeah well bottom line is that regardless of all this back and forth to eliminate RS would cause no small number of New Yorkers a world of pain. NYC would certainly turn into Boston after that city got rid of RS, that even after certain "safeguards" for the poor or whatever were put into place.
Being as all this may the original scheme of slow phase out of RS makes sense. Via vacancy or luxury decontrol slowly let the thing die a natural death.
This state and city won't learn what every economist on both sides of political fence have said for ages; government meddling in any market causes distortions and more problems that solves. One huge reason NYS rental market is so messed up is that very little of it is free market. Over 60% if rental housing is either RC, RS, NYCHA, Section 8 and or other various schemes.
RS rewards those who have obtained a "cheap" apartment as they usually never leave. New arrivals to NYC must find affordable housing the best way they know how.
We offered one of our manhattan co-ops to our tenants for 50 cents on the dollar , no money down and we will finance for a set number of years ..... the 2 apartments we have left are pretty much at breakeven rent ..one is at a profit and one is at a loss . These over look Central Park in one of manhattans most prestigious buildings .
The one at a loss has a 26 year old living with his parents who are original stabilized tenants from the conversion.. he has succession rights ... they are foolish for not buying it .. they can have 600k equity day one ..they have been stalling waiting for a lower price .
It may be to late for the tenant at this point as last week our broker said they have an investor interested in taking both apartments with the tenants for 675k... that is 2.2 million in value ...
At this point we can give them away free and we did fabulous with the package we bought .... he figures he will buy the one without the 26 year old for his young kids who will outlive the 70 year old tenant at about half price .... the other one with the 26 year old he figures he is getting free ... so it is a good deal for this investor ... we are waiting to hear back ...
I hope the tenant regrets not taking advantage of the deal after he losses the ability.
So this is what kinds of situations rs created for landlords.
On one hand it created tremendous opportunity for investors who are privy to these deals and for other landlords it creates a hardship.
We were lucky and were privy to a great deal on 9 stabilized apartments and the commercial lease rights at the building for cents on the dollar so rs can be a double edge sword for landlords
Last edited by mathjak107; 04-06-2019 at 05:49 PM..
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