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You act like rent stabilization was enacted 10 years ago. It was enacted in 1969, 55 years ago. These owners knew what they were getting into, but either they could not afford to buy building with market-rate tenants, or they had bad lawyers. If I owned a building right now with rent stabilized tenants, I would convert to co-op if the rent roll could not cover business expenses, or demolish the building.
at one time that was an option but the new laws squashed the hopes of converting ….you need 51% now of insiders to buy
it used to be 15% and that could be tough
it is nearly impossible . most renters are renters because they have no money to buy a thing .
*You* and persons like yourself who keep spouting that bit conveniently leave out property owners were told then that RS like RC was supposed to be a temporary measure designed to cope with a housing "emergency".
Sixty or so years later RS is still on the books and democrats have double down; turning RS into something it never was truly supposed to be; an "affordable" or "low income" housing scheme.
It doesn't work and hasn't worked. Case closed.
Proof of this is only way anyone will build "affordable" or "low income" housing that is rent regulated is if state or city gives them large incentives to offset issues built into system. Where developers can build market rate housing without needing anything from state or city, they will and neither City Hall or Albany can say *boo*.
the first generation of duped landlords are long gone .
for the most part Anyone who is possession of rent stabilized apartments either inherited them free or low cost , bought them for cents on the dollar , or wanted to be stabilized for the tax perks and financing perks .
those that inherited them free or a low cost can easily sell them .
we had huge demand from the players in that market place when we wanted to dump the two we had at break even rents . they were snatched up in a day
Last edited by mathjak107; 02-22-2024 at 03:04 PM..
You act like rent stabilization was enacted 10 years ago. It was enacted in 1969, 55 years ago. These owners knew what they were getting into, but either they could not afford to buy building with market-rate tenants, or they had bad lawyers. If I owned a building right now with rent stabilized tenants, I would convert to co-op if the rent roll could not cover business expenses, or demolish the building.
Yet again you don't know what the eff you're talking about.
"Prior to the enactment of the Tenant Protection Act, developers were permitted to convert rental apartment buildings into cooperative or condominium forms of ownership pursuant to an “eviction plan” (i.e., the developer would have the right to evict current tenants) or a “non-eviction plan” (i.e., the developer would not have the right to evict current tenants). The Tenant Protection Act has eliminated the right to convert a building pursuant to an “eviction plan.”
However, New York State will now require that the effectiveness of any “non-eviction plan” for the conversion of a rental apartment building to a cooperative or condominium form of ownership will be conditioned on at least 51 percent of the tenants then renting apartments in the building entering into contracts with the sponsor to purchase their apartments. Prior to the Tenant Protection Act, in order for a “non-eviction plan” to be declared effective, the developer was required to enter into contracts of sale with respect to 15 percent of the units in the applicable building. These contracts could be with current tenants in the building or with bona fide non-tenant purchasers with the intent to reside in the applicable apartment. It is important to note that it is necessary for a condominium or cooperative offering plan to be declared effective before the developer can commence closing the sale of units in the building.
Furthermore, the Tenant Protection Act provides that existing tenants of the applicable building will have the exclusive right to purchase their apartments for a 90-day period after the applicable offering plan has been accepted by the New York Department of Law. An apartment cannot be shown to a potential third-party purchaser during such 90-day period unless the developer receives a waiver from the applicable tenant. In addition, the existing tenant will have a 6-month right of first refusal (from and after the expiration of the 90-day exclusive period) to purchase their apartments under the same terms and conditions agreed to by a bona fide purchaser.
The Tenant Protection Act also prevents developers from (1) evicting eligible senior citizens and eligible disabled persons who reside in free-market apartments (except for evictions related to non-payment of rent or lease violations) and (2) unconscionable rent increases with respect to eligible senior citizens and eligible disabled persons who reside in free-market apartments."
Again, as one states unless developer or LL is willing to fork over whatever extortion money a RS or even market rate tenant wants to leave, they won't.
we paid our tenants 100k to leave ….. it’s just basic contract law …we wanted to break the contracts the tenants had , that we knowingly knew existed and so basic contract law says when you want to break a contract you may end up paying to do so.
so no qualms about paying them to go, it’s just business
Last edited by mathjak107; 02-22-2024 at 02:57 PM..
Sponsor (usually landlord) of property sets two prices; insider and market rate (outsider)
In past even with pretty good inside price offering many RS tenants didn't buy when building went co-op or condo. They chose to remain renters for various reasons up to and including lack of down payment, inability to get a mortgage (or one at a good rate), and so on. This and or they simply preferred to remain renters. That they usually had below (often deeply) market rents *and* were RS sweetened the cake.
In some buildings battle to go condo or co-op was nasty and brutal. The Apthorp was one, but there were others.
Given huge number of RS tenants are poor to busted (both then and now) democrats in Albany knew what they were doing when changing RS laws that all but banned co-op or condo conversions.
Even getting 15% for some buildings was often a stretch given socio-economic conditions that prevailed. Having to get majority plus one makes doing a conversion nearly impossible for RS buildings.
Other issues come from banks and other sources of financing tightening things up post 2008 credit/mortgage/fiscal collapse and resulting recession.
Banks nor Fannie or Freddie will give loans to co-ops or condos that do not have certain percentage of owners. Thus a building such as a RS where 49% of tenants opt out of buying could make life difficult for that 51% who do buy in terms of obtaining financing.
Perfect example of this is Tudor City. Parts of that complex went co-op during wave of conversions back in day. Problem is high number of units are rentals (even in co-op buildings), thus banks won't often go near the place with a barge pole. So if you want to buy in Tudor City it's often by de facto an all cash deal.
Finally for last decade or so when buildings did go condo or co-op from rental (RS or market rate) insider prices weren't often the great deal they were back in day. Some sort of discount off outsider price was offered, but nothing like steep discounts of past.
Sponsor (usually landlord) of property sets two prices; insider and market rate (outsider)
In past even with pretty good inside price offering many RS tenants didn't buy when building went co-op or condo. They chose to remain renters for various reasons up to and including lack of down payment, inability to get a mortgage (or one at a good rate), and so on. This and or they simply preferred to remain renters. That they usually had below (often deeply) market rents *and* were RS sweetened the cake.
In some buildings battle to go condo or co-op was nasty and brutal. The Apthorp was one, but there were others.
Given huge number of RS tenants are poor to busted (both then and now) democrats in Albany knew what they were doing when changing RS laws that all but banned co-op or condo conversions.
Even getting 15% for some buildings was often a stretch given socio-economic conditions that prevailed. Having to get majority plus one makes doing a conversion nearly impossible for RS buildings.
Other issues come from banks and other sources of financing tightening things up post 2008 credit/mortgage/fiscal collapse and resulting recession.
Banks nor Fannie or Freddie will give loans to co-ops or condos that do not have certain percentage of owners. Thus a building such as a RS where 49% of tenants opt out of buying could make life difficult for that 51% who do buy in terms of obtaining financing.
Perfect example of this is Tudor City. Parts of that complex went co-op during wave of conversions back in day. Problem is high number of units are rentals (even in co-op buildings), thus banks won't often go near the place with a barge pole. So if you want to buy in Tudor City it's often by de facto an all cash deal.
Finally for last decade or so when buildings did go condo or co-op from rental (RS or market rate) insider prices weren't often the great deal they were back in day. Some sort of discount off outsider price was offered, but nothing like steep discounts of past.
Thanks for the info Bugs. Between you and mathjak, I am changing my stance on rent stabilization to the point where I can see how it can be difficult for LLs to maintain the property. The rent roll simply can't sustain the expenses. I have to really look at what happened to Boston when they got rid of rent stabilization. I'll be back to this thread later after I do some research.
__________________
"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
If someone is living someplace where they are paying one-half to one-third (or more) of their monthly income towards rent (or housing) then something is very wrong.
Fifty percent or more of renters in NYC are "rent poor", that is they are paying 30% to 50% or more of take home income towards rent.
Even more telling is good number of such persons live in rent regulated or whatever housing, so obviously RS isn't some sort of magic bullet.
In fact if RS were ended tomorrow hugest impact would be for those in Manhattan. On average for much of Bronx, Brooklyn and Queens legal RS rent is actually *higher* than what LLs can get on free market.
Low income tenants fight to remain in RS units (that they often cannot afford) because of protections that come with system. They pay their rent late, get dragged into housing court (for nonpayment) so often they know the address and court officers names by heart, and still retain right to a renewal lease. A free market LL would likely not renew their lease.
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