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I don't know of anyone who would voluntarily give up a rent controlled apartment. I don't know how common they are - everyone seems to know someone who has one, but the only way I've seen anyone give one up is upon their death. I know one woman who has a 2BR on the UWS that she pays something like $250 a month for. She's trying to figure out a way to pass it to her kids, which to me is taking it too far as they're both doing quite well financially. Guess I can't blame her for trying.
Yeah $250 is ridiculous.. market rent has to be at least $3000 right ?
I don’t follow NYC rent super close but I know Manhattan rents are generally higher than La
So, what does "rent controlled" actually mean? I've never lived in a place where it was done. Is this an agreement the owner makes to get section 8 payments?
Rent control in New York
Qualification
To qualify for rent control, a tenant must have been continuously living in an apartment since July 1, 1971, or be the qualifying family member who succeeded to such tenancy. When vacant, the unit becomes rent stabilized, except in buildings with fewer than six units, where it is usually removed from the program. In apartments within single and two-family homes, the tenant must have been residing in the unit continuously since March 31, 1953 in order to qualify for rent control. Once the unit becomes vacant, it leaves the rent control program and is not eligibile for rent stabilization.[6][7]
Rent control does not generally apply to units built after 1947.[6]
In New York City, only buildings with six or more units can be rent-regulated.
Terms
Rent control limits the price a landlord can charge a tenant for rent and also regulates the services the landlord must provide. Failure to provide these may allow the tenant to demand a lower rent.[6]
Outside of New York City, the state government determines the maximum rents and rate increases, and owners may periodically apply for increases.
In New York City, rent control is based on the Maximum Base Rent system. A maximum allowable rent is established for each unit, and every two years, the landlord may increase the rent up to 7.5% (as of 2012) until the Maximum Base Rent is reached. However, the tenant may challenge these increases on grounds that the building has violations or the owner does not need to increase the rent that much to cover expenses.
Maximum base rent
In New York City, the maximum base rent (MBR) is calculated to ensure the rent from rent control units covers the cost of building maintenance and improvements. As set up in the New York City Local Law 30 of 1970, the formula reflects real estate taxes, water and sewer charges, operating and maintenance expenses, return on capital value and vacancy and collection loss allowance. The MBR is updated every two years to reflect changes in these expenses.[8] The owner must apply for the maximum base rent system for the tenants, but before the MBR, rents were annually determined by the city/state, which developed its own set of regulations. https://en.wikipedia.org/wiki/Rent_control_in_New_York
For all you know, 4.2 million may not even cover their total ownership costs during their ownership period.
And it never occurred to you that this very disincentive to invest in rental property might reduce the available supply of rental units and accelerate the upward price pressure on the existing supply?
Rents start to climb, so you implement rent control, reducing the availability of rental units and reducing the turnover of the remaining units, putting more upward price pressure on rents, reducing the turnover of remaining units, putting more upward price pressure on rents, etc., until only the rich and the poor can afford to live there, the latter largely by expropriating the resources of the former with the help of the ever-so-benevolent middle-man government. This is how you hollow out a city's middle class, and your only response is "if you don't like the rules don't buy the property"?
In New York, you don't implement rent control. You had to have been living there since 1971. If you purchased the place after that then you are aware that they have rent control in so many apartments and the price you pay reflects that!
If only the richest people could afford to live in a city, it would collapse. There would be no one to wash dishes, drive buses or put out fires.
The wages would rise to attract those people to those jobs that are needed.
And fact is they can still live within commuting distance, but some feel they are owed to live in the expensive areas even though they cannot afford it.
I hear this argument a lot . Yet there are still a lot of people applying for low wage jobs in high cost cities.
There will never be enough affordable housing in the middle of desirable cities no matter what liberal politicians promise
Do you think only LIBERAL politicians want their floors mopped or their cars waxed or their hair cut in expensively
Where do you think people live who WORK at all the bodegas and small convenience stores and vapor shops and work restaurants and bars???
It isn't only LIBERALS who live in cities and heaven knows there are plenty of conservatives with money who want cheap labor...
Where are those people living?? Under ground in the tunnels??? In their cars??? On someone's couch--often enough yes--because there is finite capacity for inexpensive rent...
Educate yourself about the needs of society as a whole---
Or you are going to destroy it...
The wages would rise to attract those people to those jobs that are needed.
And fact is they can still live within commuting distance, but some feel they are owed to live in the expensive areas even though they cannot afford it.
That is a totally bogus statement
"The wages would rise to attract those people to those jobs that are needed"
What kind of job do YOU have and where do you work?
Do you think a restaurant or bar, a dry cleaners, a bodega, a cinema---are paying their front line workers enough to live in Manhattan?
They have to travel in and even then likely pay a high rent
Read "The Hunt" in the NYTimes and see some of the apartments people are finding on the market and their prices...
Do you actually own rental property? Do you know anyone who does?
This idea that property owners are all like Scrooge McDuck swimming in vaults full of gold coins is so naive that... well, it can only be believed by the same people who believe rent control benefits "all The People." It benefits those who get to live in below-market units for as long as they feel like (and the bureaucrats who rely on them for their own livelihoods) and screws everyone else -- prospective tenants and property owners alike.
Quote:
Originally Posted by jm1982
The cap rates / returns on rental property in L.A are next to nothing now .
About 3% or less . I’m guessing it’s the same or worse in L.A and those figures are based on brokers selling the properties and they notoriously leave out many expenses .
Only way these people can make income is by holding onto the property for year and hope rents go up more than their expenses .
Many real estate investors calculate based on expenses of 50 percent of rent ... before their mortgage payment
I notice the same ignorance when people talk about business owners . A place charges $6 for a sandwich they might be making 60 cents or less of profit after rent , employees , insurance , utility etc etc
Then morons wonder why they can’t pay $15 or $20 bucks an hour to cashiers and sandwich makers ..
Rental property owners, and business owners, should do the same as they expect of everyone else and 'learn' to live within their means. If they can't do that, then they shouldn't be in business. Inflation of prices, hurts buyers and sellers alike. There is no win, win here. There's a give and take.
When they bought the property they new it was rent control. Learn to live within that income and knowing that prices go up but the income will be the same, learn to live within that 'fixed' income. If the person doesn't 'like' living on a fixed income, then don't invest in rent control property.
As for as long time residence in a rent control, when a person buys their home, they lock in their mortgage rates, do they not? Same thing ... they signed a contract.
If doing the right thing made people money, there would be less laws made accordingly and share prices on 'the right thing' would sore through the roof.
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