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Old 01-30-2009, 02:09 PM
 
Location: Nassau, Long Island, NY
16,408 posts, read 28,900,557 times
Reputation: 7273

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Quote:
Originally Posted by DAS View Post
Ok Miles but another issue has to be addressed. Section 8 income guidelines are much too low for most people that live in rent stabilized apts. Would taxpayers be willing to subsidize their rents when most rent stabilized tenants make a decent wage? Most are not poor, just not wealthy enough to pay market rate rents.

I also think that NY is a huge state. Some businesses should be offered incentives to move to Syracuse, Rochester, Buffalo and other towns with lower cost of living. Some industries should be shifted to these areas. There is no reason for an industry which pays a majority of its workers, the median household income for NYC, or less, to stay in the city. People may be willing to move to other areas of the state if there were jobs.

City resources are also stretched to the limit, schools, hospitals etc. These institutions are underutilized upstate. There is plenty good reasonably priced housing stock for the average worker, if there were jobs.

From what I understand, to get an apartment off rent stabilization, two things have to happen:

1. The rent must reach $2000 per month
2. The tenant must be earning more than $175,000 for two years in a row

I think that a disqualifying income of $175K is extra generous and as far as I know, if the apartment does not reach $2K a month, the sky is the limit for what the tenant earns since nobody can ask about it or do anything about it.

I think once again wealthier people who have been in the apartments the longest and who have the most earning power don't deserve a huge break on rent, yet are pulling the strings to keep themselves entitled.

 
Old 01-30-2009, 02:13 PM
DAS
 
2,532 posts, read 6,003,599 times
Reputation: 1088
Quote:
Originally Posted by lamontnow View Post
DAS,
That statement indicates that you totally do not understand the economics of rent regulation and it's harmful effects on market-rent tenants. Analyses and studies of the NY market by housing specialists (not landlords) have explained this. Briefly it goes like this:

Hundreds of thousands of regulated apartments are kept off the market by low-rent occupants who sit on them for many years and often decades. This occurs because of the artificially low rents. Thus the supply of apartments on the market is kept artificially low, causing market rents to be artificially high because of the demand:supply ratio. Deregulation would bring these apartments onto the market, increasing supply, and lowering market rents. You don't have to be a rocket scientist to understand this. When supply increases relative to demand, prices decrease. DAS, can you understand this?

This is why rent regulation has been phased out or abolished almost everywhere in the US. As a result, market rents declined in these areas, as expected.
I love LI but has already answered part of it for me with this post.

Quote:
I cannot be convinced that if it were all abolished tomorrow rents would go down, especially in Manhattan. I think the rents of any newly available apartments (THAT WERE NOT CONVERTED TO CO-OP OR CONDO UPON THE ABOLISHMENT OF RENT CONTROL AND STABILIZATION) would go sky-high to match market rents.

I understand economics very well. It was my major and I graduated with honors. What you are saying about rent regulation in other parts of the country is only partially true. The rents are in line with the salaries. Also it is cheaper to buy in most other places than to own. No study has to be funded with our tax money to see that if your household income is $50K a year that you cannot pay 2K a month. If you made a lot more than that you wouldn't need to pay another person to live in their rent stabilied apt, you could buy something of your own.

How about a law ending rent stabilized rents, and another stating that you cannot charge more than 1/3 the gross income of the household. So that people can pay their rents, still eat, get back and forth to work, and have some clothing on their backs.

People in other parts of the country can find rentals that are 1/3 or less of their gross income.
 
Old 01-30-2009, 02:17 PM
 
3,225 posts, read 7,675,167 times
Reputation: 876
Quote:
Originally Posted by DAS View Post
I love LI but has already answered part of it for me with this post.




I understand economics very well. It was my major and I graduated with honors. What you are saying about rent regulation in other parts of the country is only partially true. The rents are in line with the salaries. Also it is cheaper to buy in most other places than to own. No study has to be funded with our tax money to see that if your household income is $50K a year that you cannot pay 2K a month. If you made a lot more than that you wouldn't need to pay another person to live in their rent stabilied apt, you could buy something of your own.

How about a law ending rent stabilized rents, and another stating that you cannot charge more than 1/3 the gross income of the household. So that people can pay their rents, still eat, get back and forth to work, and have some clothing on their backs.

People in other parts of the country can find rentals that are 1/3 or less of their gross income.
Excellent post from an excellent poster. Can't argue with your economics or your logic.
 
Old 01-30-2009, 02:19 PM
DAS
 
2,532 posts, read 6,003,599 times
Reputation: 1088
Quote:
Originally Posted by I_Love_LI_but View Post
From what I understand, to get an apartment off rent stabilization, two things have to happen:

1. The rent must reach $2000 per month
2. The tenant must be earning more than $175,000 for two years in a row

I think that a disqualifying income of $175K is extra generous and as far as I know, if the apartment does not reach $2K a month, the sky is the limit for what the tenant earns since nobody can ask about it or do anything about it.

I think once again wealthier people who have been in the apartments the longest and who have the most earning power don't deserve a huge break on rent, yet are pulling the strings to keep themselves entitled.
Look up NYC zipcodes and see what people are making. There are only a few pockets in this city where median household income is l$175K. Most are making around 50K. So for the most part that part is taken care of. There will be a few cheaters but for the sake of this discussion they are too small of a percentage to worry about. They don't represent the majority.
 
Old 01-30-2009, 02:28 PM
 
8,750 posts, read 16,062,616 times
Reputation: 4168
I understand the need for rent stabilization, as prices in NYC are out of wack with reality (incomes). However, as with most well-intentioned legislation, there were unforseen consequences, it is oftentimes abused, and upon actual application becomes twisted and distorted by various selfish interests. Rent Stabilization is a prime culprit in the extremly low vacancy rates in NYC, and the subsequently grossly high rents. And as the property values and operating costs (heating, water, electric, maintenance, repairs, etc) rose, with little rent increase due to structure mandated increases regardless of reality, it became an undue burden on LLs, who oftentimes, cannot make ends meet. Buildings go into disrepair, Tenants complain, and the cycle never ends. Do I think rent stabilization is evil? No..it served its purpose. However, why do we have to continue with, what I believe to be, a failed system? Can we not put our heads together to create a better system? Or must we just stay with rent stabilization because? Unfortunately, the loudmouths scare politicians into keeping the system for their own benefit, at the expense of the health of the city and its residents (financial, social, and otherwise). There has to be a better way..why isn't anyone trying?
 
Old 01-30-2009, 02:32 PM
 
1,263 posts, read 2,113,118 times
Reputation: 509
Quote:
Originally Posted by I_Love_LI_but View Post
I cannot be convinced that if it were all abolished tomorrow rents would go down, especially in Manhattan. I think the rents of any newly available apartments (THAT WERE NOT CONVERTED TO CO-OP OR CONDO UPON THE ABOLISHMENT OF RENT CONTROL AND STABILIZATION) would go sky-high to match market rents.
That flies in the face of eco 101 and what history demonstrates. Market rents wouldn't drop suddenly. The increased supply would eventually flow into the market and reduce rents as the formerly low-rent tenants vacated. The most recent example was in Mass. in the 90's when rent regs were abolished in some areas including Boston.
 
Old 01-30-2009, 02:35 PM
 
Location: Nassau, Long Island, NY
16,408 posts, read 28,900,557 times
Reputation: 7273
Quote:
Originally Posted by lamontnow View Post
That flies in the face of eco 101 and what history demonstrates. Market rents wouldn't drop suddenly. The increased supply would eventually flow into the market and reduce rents as the formerly low-rent tenants vacated. The most recent example was in Mass. in the 90's when rent regs were abolished in some areas including Boston.
In terms of housing stock in NYC, Manhattan in particular, rentals are OUT and co-ops/condos are IN and this has been the case for years now. Do you know of a reason why it would suddenly turn around? So if there were a big change I would think most of these former rent controlled or stabilized rentals would become co-ops or condos and would not significantly add to the RENTAL housing stock. Whatever is left as RENTALS would not be nearly enough to saturate the market to the point rents would go down and would match current market rents. Spare me the Eco 101 nonsense please, okay?
 
Old 01-30-2009, 02:37 PM
 
Location: Bronx, New York
3,190 posts, read 6,346,910 times
Reputation: 1290
Quote:
Originally Posted by lamontnow View Post
That flies in the face of eco 101 and what history demonstrates. Market rents wouldn't drop suddenly. The increased supply would eventually flow into the market and reduce rents as the formerly low-rent tenants vacated. The most recent example was in Mass. in the 90's when rent regs were abolished in some areas including Boston.
That's not what folks I know in Beantown are telling me.
 
Old 01-30-2009, 02:40 PM
 
Location: Nassau, Long Island, NY
16,408 posts, read 28,900,557 times
Reputation: 7273
Quote:
Originally Posted by DAS View Post
Look up NYC zipcodes and see what people are making. There are only a few pockets in this city where median household income is l$175K. Most are making around 50K. So for the most part that part is taken care of. There will be a few cheaters but for the sake of this discussion they are too small of a percentage to worry about. They don't represent the majority.
Too bad that can only give us general information and nothing specific about the holders of rent-stabilized and rent-controlled apartments. I think we would end up being surprised to find that these "subsidized by the landlord" tenants are wealthier than the median household income for the most part. However, since they are pulling the strings, there are no studies or organized record-keeping on what they earn.
 
Old 01-30-2009, 02:41 PM
 
8,750 posts, read 16,062,616 times
Reputation: 4168
I can tell you why it would suddenly turn around..there is A GLUT OF CONDOS CO-OPS for sale!!! Buildings that were being marketed as condos/co-ops are now being turned into rentals...crazy huh? Its called letting the market determine...crazy concept huh? The housing market is in a big downturn, pick up a paper, and read it yourself. As a result, co-ops and condos are OUT and rentals are IN! Where have you been over the last 12 months? Last 4 months? Does your memory and knoweldge expand past the last 5 years because these are cycles, and the city has been through many of them throughout the years/decades.
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