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It could be worse, we could be Seattle. Apparently their rent law says the landlord must rent the apartment to the first person that applies, background checks banned
Look for massive degradation of the regulated housing stock in NYC. There is no not a single reason for landlords of regulated buildings to put a plug nickle into them. There's no reason for anyone to buy regulated buildings. You think NYCHA is bad. In a couple of years, regulated buildings will be worse. Also, I wouldn't be surprised if seventies style arson starts coming back.
If you think that's big consider this doozy - landlords are no longer allowed to black list deadbeat tenants based on court actions
GOOD LUCK ENFORCING THAT lol
Yep!
LL's will just go back to doing what they did before; using in house people to handle credit and other checks. Anyone with a CC and or large enough bank account can sign up for LexisNexis.
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Look for massive degradation of the regulated housing stock in NYC. There is no not a single reason for landlords of regulated buildings to put a plug nickle into them. There's no reason for anyone to buy regulated buildings. You think NYCHA is bad. In a couple of years, regulated buildings will be worse. Also, I wouldn't be surprised if seventies style arson starts coming back.
That may depend upon type of tenant mix. Many buildings having emptied out most or nearly all RS tenants made substantial upgrades to common areas, and or did things like MCI work or add improvements to attract and keep better class of new tenants. They cannot afford to let their buildings get too busted because people won't pay major money to live.
OTOH for buildings in the outer boroughs and or that are now saddled with RS tenants for live, yeah, there isn't any incentive to put a GD nickel into the place. Just do the minimum to be in compliance.
Thing is plenty of people don't mind living in a busted building, long as their rent is low...
And I imagine this pretty much puts an end to significant "buyouts" of rent stabilized tenants, as there seems to be less incentive to get rid of them (I haven't read the law yet, but listening to the highlights on the radio, this is what hit me). Any thoughts? from MathJak maybe?
Depends, if intention is to tear down the building or do a total gut renovation then buyouts likely are still on the table.
Demolition or gut renovation are now the only two ways left to get an apartment out of RS.
Among new developments of late that used this tactic are 220 Central Park South, and both or Icon Realty's new towers on UES (corner of East 80th and 81st on Second).
If I owned a rent regulated building in NYC, next opportunity I'd be challenging the property valuation for tax purposes, because the values of such buildings in NYC probably just dropped by half.
If I owned a rent regulated building in NYC, next opportunity I'd be challenging the property valuation for tax purposes, because the values of such buildings in NYC probably just dropped by half.
That my friend is the other shoe waiting to drop in this effing experiment in social justice.
Already banks that make loans to rental properties especially RS buildings have taken a beating. From USA to world markets such financing has taken a hit just going on rumors; now that there is confirmation.....
LLs who already have financing in place did so largely based upon future rent rolls. Now that those numbers have been capped look for some or a good many borrowers to default, and or try to renegotiate better terms, this even if it means filing for bankruptcy. Again keep in mind many such LLs were small "mom and pop" owners who needed financing to put money into their buildings. They now are royally screwed as they still have that nut, but means to pay it back have changed drastically.
Other thing to watch is what happens to property valuations, especially in areas that most recently were busted hoods (Bed-Stuy, Bushwick, much of eastern Brooklyn, large parts of Bronx, etc....) .
Again think many either are ignorant or just don't have a clue what NYC looked like in the 1970's through a good part of 1980's.
Of course many around here will say "so what"? or "good, then things will get cheaper..".
Well yes that *could* happen, but remember this; it is the steep rise in property valuations which have allowed Sam the Eagle and city government (along with state to some extent) to spend like drunken sailors the past two decades or so. This without having to raise city property taxes because higher assessments brought in tons of money.
However when the opposite happens (values go down), so does assessment values so there is less money coming in via property taxes. Only way to change this is to raise actual property tax rates.
Large multi-family rental housing is taxes as commercial property by the city. It also pays the highest share of real estate taxes with condos/co-ops next and single-two family the least. If large rental housing takes a hit in terms of value, the entire city and even state will feel the effects. Again just like the 1970's and 1980's.
^
I thought of the finance angle after I posted the tax angle. Banks are going to end up owning a lot of those properties, or the city itself, through tax foreclosures.
^
I thought of the finance angle after I posted the tax angle. Banks are going to end up owning a lot of those properties, or the city itself, through tax foreclosures.
One saving grace is that unlike the 1970's or 1980's there is private equity and other investors/sources that will step in and take a property for right price, and or under right conditions. What number will get them to move however is an unknown. That being said recent developments are certainly going to cause a chill to flow across all this new interest in far reaches of outer boroughs.
Few things made sense from the start when they depended upon "affordable" housing lotteries/financing or whatever. Now that you're looking at a host of limits that start from application process on down, best to pack up and go elsewhere.
Private equity won't buy something unless they can see a big upside. Under the new rent regulations, there is no upside.
You know who'll be interested? The slumlords. The guy who know how to buy a building and squeeze it. They don't care if it's legal, and they usually know how to get around the law.
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